U.S. Markets closed

How Amazon's HQ2 could help all tech workers in DC and NYC

JP Mangalindan
Chief Tech Correspondent

Amazon’s decision to split HQ2 between New York City and Arlington, Virginia (a suburb of Washington, DC) could translate to higher salaries for the average tech worker in both areas, according to the CEO of the job matching site Hired.

In Amazon’s (AMZN) announcement on Tuesday, the tech giant said it would invest $5 billion in two new headquarters, each sprawled across 4 million square feet, and create over 50,000 jobs, with workers in both locations earning an average of $150,000 a year.

That’s significantly more than the $129,000 tech workers earn on average in New York City and the $116,000 tech workers earn on average in the Washington, D.C. area, according to Hired. Expect tech salaries in general to trend upwards as a result, predicts Mehul Patel, CEO of Hired, which counts Amazon as a business client.

“We know that almost three-fourths of our candidates say that salary is important,” said Patel, whose firm regularly surveys thousands of Amazon’s job applicants each year. “Amazon is sort of really focused on their employer value proposition. They really made a commitment here in National Landing and Long Island City to cities that have great infrastructure. Great compensation, great cities with great infrastructure will draw great talent, and I think along those lines will force local companies to realize there’s a war for the very best talent.”

Behind a “Virginia is for Amazon Lovers” sign, Virginia Governor Ralph Northam speaks at a news conference after the announcement that Crystal City has been selected as home to Amazon’s new headquarters in Arlington, Virginia, U.S., November 13, 2018. REUTERS/Kevin Lamarque

The competitive landscape

Amazon, for its part, has said each HQ2 location will employ over 25,000 people. In New York City, tech companies such as Google (GOOG, GOOGL), Facebook (FB) and Uber already have a major presence alongside Amazon, which already has some of its Prime and supply chain employees in the city.

“I doubt big tech is worried, but they will be more aware of the competitive landscape when it comes to strategies for recruiting technical talent given Amazon will be offering very similar incentives,” said Will Potter, co-founder of the New York executive recruiting firm Bamboo Talent, referring to incentives that include salary, high-performing restricted stock units and the ability to work on wide-reaching products.

Expect the tug of war between tech companies to be felt more so in Arlington, a job market where the pay disparity between Amazon’s promised wages and average tech salaries is greater but the supply of qualified job candidates is tighter, one tech recruiter told Yahoo Finance. That tech recruiter requested anonymity in case Amazon uses their services in the future.

“I don’t know if this current market can handle this increased market all on its own,” added the recruiter, speculating that in addition to potentially poaching workers from other local companies, Amazon will likely relocate employees from Seattle and new hires to the area, as well as offer other hires the ability to work remotely.

Let the games begin.

JP Mangalindan is the Chief Tech Correspondent for Yahoo Finance covering the intersection of tech and business. Email story tips and musings to jpm@oath.com. Follow him on Twitter or Facebook.

More from JP: