Amazon selected 20 cities as finalists for the company’s HQ2, the company’s new headquarters. It could mean a lot for those cities — and the colleges and students located there.
A new study suggests that a company’s decision to open a new office could push the company to recruit from schools in the area.
Companies are nearly twice as likely to recruit at universities within 100 miles of a new office in the four years after opening the new office compared to the year before it opened, according to an IZA — Institute of Labor Economics discussion paper. And if the new office is in a location where there’s a dearth of companies in its industry — say somewhere other than the coasts? The firm is six times more likely to recruit from local universities in the years following the opening of the new location.
“Wherever they open this office, the local colleges and universities may benefit,” said Russell Weinstein, the author of the paper and a professor in the School of Labor and Employment Relations at the University of Illinois at Urbana-Champaign.
It’s hard to say for sure whether Amazon
will follow the pattern of other firms Weinstein observed in the study. The analysis focuses on the recruiting patterns of banks and consulting firms at the top 376 colleges as defined by the Princeton Review. Still, some colleges and universities appear to be betting that an Amazon headquarters in their region will boost the schools; they’re helping their cities bid for the company’s business.
Weinstein speculates that there are two main factors driving companies’ decision to start recruiting locally when they open a new office. For one, it may be costly for the company to conduct a truly national recruiting drive. In addition, they may believe that students already attending college in a certain region may be more likely than others to accept a job there. Prestigious firms whose recruiting pipeline is typically associated with elite, coastal universities are willing to hire from elsewhere.
“When firms open up offices in new cities, not only are they wiling to change where they recruit, it looks like they’re willing to recruit at less-selective universities,” Weinstein said. The analysis is limited to schools at a certain level of prestige, so it’s unclear whether schools at all levels of the selectivity spectrum benefit from a company’s new office.
Prospective students may want to consider these recruiting patterns as they mull where to attend college, Weinstein said. For students already in college and hoping to work at a firm that doesn’t have an office near their school, Weinstein said the results suggest “it’s important that they can credibly signal to those firms that they’re willing to move to a city where the firm is located.”