A Youthful Migration Prompts Companies to Relocate

By B. Yovovich

Jan. 14, 2009

As younger workers increasingly vote with their feet by migrating to the central cores of U.S. cities, some companies and HR professionals appear to be following them.

Given the priority companies are placing on boosting their recruitment and retention of workers ages 25 to 34, it is no surprise that some companies are taking steps to better connect with those city-bound young adults, even going so far as to move the company.

“I am hearing from HR managers that they are having a devil of a time getting people to fill the jobs in some locations, and it is because the place where young people want to live is different from where the previous generation wanted to live,” says Joe Cortright, an economist at Impresa Inc., a consulting firm in Portland, Oregon. Cortright has been studying the migration of the 25- to 34-year-old age group, which includes Millennials (usually defined as the group born from 1980 to 2000) and younger members of Generation X (born 1965 to 1979).

“Employers with whom we are working have found that there is a generational shift, and that the places where you found your current workers are not necessarily the places where you are going to find your next generation of workers,” Cortright says.

The scale of the change is hard to miss. Look at just about any city and there’s anecdotal evidence of the surge in the attractiveness of near-downtown locations for highly recruited younger workers. The anecdotal evidence is borne out by hard data.

Cortright’s analysis of Census Bureau data shows that in 2000, 25- to 34-year-olds were 34 percent more likely than the general population to live in close-in neighborhoods in the nation’s metro areas, up sharply from the 12 percent who were more likely to reside there in 1990. Signs are that the central-city percentage has continued to rise in the eight years since the 2000 Census data was collected.

“This represents a huge increase in the relative attractiveness of central neighborhoods to young adults,” says Cortright, whose analysis focused on close-in neighborhoods (within three miles of the central business district of a metropolitan area) that generally correspond to the commercial heart and densest neighborhoods in each city.

In addition, the rising “priority of place” for younger workers was underscored in a 2006 study by the Segmentation Co. division of Yankelovich, a marketing consulting firm. Sixty-five percent of 1,000 respondents ages 24 to 35 said they preferred to “look for a job in the place that I would like to live” rather than “look for the best job I can find, the place where it is located is secondary.”

“Sure, there will be some employers that will do fine in a small-town or suburban setting, but, in general, you are going to find a richer vein of talented young people in vibrant urban cores, and it will be easier to recruit them to places that have lots of the amenities that appeal to them,” Cortright says.

Examples have been cropping up of companies choosing to move operations to central-city locations in close proximity to neighborhoods attractive to younger workers. Many are in Chicago, which has seen striking growth in this demographic segment. From 1990 to 2000, the population of 25- to 34-year-olds within three miles of downtown Chicago grew 15.5 percent, the fifth-highest percentage in the United States. In Chicago, a person age 25 to 34 is 1.79 times more likely to live in Chicago’s urban center than is the general population.

One company that shifted to take advantage of such numbers is Until several years ago, its company headquarters was in Rosemont, Illinois, a Chicago suburb near O’Hare International Airport. When explosive growth beginning in 2003 forced CareerBuilder to look for more space, the company decided to keep the suburban office but also relocate headquarters and a major share of other local operations to a site in Chicago’s downtown Loop.

“The downtown location definitely helps us more effectively broaden our candidate pool beyond just the immediate Chicago area,” says Rosemary Haefner, vice president of human resources at CareerBuilder.

“When you are looking at the college recruiting scene, it is a far more compelling employment proposition for a Millennial candidate to be thinking of a job in the Chicago city center and to be able to tell them, ‘You’ll be in the city and you can work hard and play hard,’ ” Haefner says. “It does not carry the same dazzle to say, ‘You will be conveniently located near O’Hare airport.’ “

There’s a similar story at Navteq, the digital map firm acquired by Nokia in 2007. Founded in Silicon Valley in 1985, Navteq relocated its headquarters from California to Rosemont in the 1990s to take advantage of Chicago’s central location.

“For us, the initial attraction of Chicago was O’Hare, which makes it a fabulous location if you are a global company, and fantastic nationally too,” says Kelly A. Smith, Navteq’s senior vice president of corporate marketing. Smith has had a bird’s-eye view of the near-doubling of the number of Navteq’s employees since she joined the company in 2001.

On the other hand, “the decision to move from Rosemont to downtown was about the vitality of the city center and about being able to attract world-class talent from anywhere,” Smith says. “We recruit at several major engineering schools in the Midwest for the R&D area of our business, and being in the downtown city center with its vibrant attractiveness—and so much to do—helps us with that age group, as well as every other age group.”

With its lease due to expire in 2009, the Mullen advertising agency in Wenham, Massachusetts, had outgrown its current location and began looking at downtown Boston locations.

“In terms of talent, the advertising agency business is evolving to a point where technology plays a bigger role than ever. Our business is a blend of creative content, technology and distribution systems,” says David Swaebe, vice president for agency communications at Mullen, where 65 percent of employees are under 35. “We want to make sure that we are competitive in terms of attracting technologically savvy, culturally connected people, and you are more likely to find people like that the closer that you are in an urban environment.”

The upcoming move already has paid personnel dividends for Mullen.

“I have hired two creative people, one from San Francisco and one from the Research Triangle in North Carolina, and the fact that we are going to be in downtown Boston was a major incentive for them to come here,” Swaebe says.

The factors driving this unprecedented concentration of young adults to the nation’s city centers include younger workers delaying marriage, their expectation of decreased job tenure and increased employment volatility, and an increased emphasis on a balance between work and lifestyle. The result is much greater interest among 25- to 34-year-olds in the opportunities for relationships, entertainment and stimulation that characterize vibrant city neighborhoods.

“You repeatedly hear them talk about lifestyle and work balance,” says Janet Sun, vice president of marketing and content at Experience Inc., a college-focused career network headquartered in Boston. “They work to live, as opposed to live to work. As a result, after-work time is especially important to them. Sometimes it is a social environment that they are looking for. Other times it is cultural, or volunteer work, or even professional-related activities. Those things have become more important to them, and those kinds of activities would be richer in a city area rather than in a suburban or rural location.”

The importance of a vital social scene is underscored in the findings of arecently conducted Experience Inc. survey. The most popular reason that respondents gave for relocating was career opportunities (44 percent), followed by social scene (19 percent) and family (6 percent). When asked, “If you received a fantastic job that would require relocation, what would stop you … what would be some of the barriers?” the No. 1 factor was cost of living (33 percent), then family (21 percent) and lack of social scene (20 percent).

With this in mind, one relatively straightforward step companies and communities can take to attract Millennials and younger Gen X’ers is to make it easy for them to get information about the community and resources they are likely to find attractive.

Economic development group World Business Chicago created a DVD titled “Cooler by the Lake” that is targeted at college seniors and first-year graduate students and is offered to recruiters from local companies to distribute on college campuses. Not only does the disc include information about cultural, business, recreational and dining venues, it also includes a listing of Chicago bars that hold weekly “mini-reunions” and broadcast sports events for alumni of various Big 10 universities.

These types of resources, Sun says, can help candidates “see that there is stuff that they can do, or that they will be able to connect with recent grads and help make it more of a community rather than just a place to work.”

“The last thing you want as a young person is to move to a city, leave your family 300 miles away, without knowing that there is some sort of social environment into which you can fit,” she says.

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