The job market in the Big Apple appears hotter than ever. With unemployment at record lows, the battle for talent is raging as tech giants, including Amazon and Google, lay plans to open new or expanded operations in Manhattan and Long Island City.
Projects include the new $5 billion Amazon headquarters in Long Island City, Google's new $1 billion 1.7-million-sq-ft campus in Hudson Square and a new office complex at Chelsea Market. According to a survey by Tech:NYC and Accenture, 80 percent of companies in New York City said they planned to hire more tech talent in 2018 than the year before.
The trend is spurring demand for tech talent as well as for other support services, such as advertising, fintech, accounting, compliance and more. Headhunters say that although direct impact has yet to be seen, the expansion plans bode well for New York City's job market.
"Even though New York is one of the most expensive markets in the country, it offers huge advantages for companies," said Jed Kolko, chief economist at online jobs site Indeed.com.
"It is the largest labor market in the country, and it's a fairly diversified market," he said, noting that New York City also offers a fairly broad mix of both employers and workers in many industries and occupations. For many companies, that makes it worthwhile to pay the high real estate and labor costs to be in New York.
The hiring spree will make an already tight job market even tighter. Last month the New York Department of Labor said seasonally adjusted unemployment fell to 3.9 percent in November. That's the lowest level since the department started keeping records in 1976. Not only that, but New York State's private-sector job count rose to an all-time high of 9.75 million.
In December Google announced a major expansion in New York that would add thousands of jobs and make it one of the city's largest commercial tenants.
Google's new campus, to be called Google Hudson Square, followed an announcement earlier in the year that the company would spend $2.4 billion to buy Manhattan Chelsea Market and lease additional space at Pier 57. The expansion project at Hudson Square is expected to be completed in 2020; the other should finish in 2022. Google, which has more than 7,000 employees in the city, expects that number to more than double over the next 10 years, the company said, though it's unclear the types of roles Google will be filling in New York.
Amazon, in a recent letter that was published in the New York Post and New York Daily News, said it expects to add 25,000 new jobs over the coming decade, including jobs in software engineering, product management, program management, operations, sales and marketing. Amazon also said it expects to contribute indirectly to tens of thousands of jobs in construction, building services, human resources, hospitality and retail.
Though details about the types of jobs that Google and Amazon intend to hire in New York are not available yet, Indeed's Kolko said he expects jobs in dominant New York industries, such as media, advertising or finance, to see the most growth.
In the near term, headhunters said the expansion by tech giants could squeeze tech start-ups a bit. The city, which has become a mecca for entrepreneurs, thanks to a diverse talent base and abundant funding, now boasts more than 7,000 tech start-ups, with fast growth in B2B, consumer web, health tech and fintech, according to Tech:NYC.
"These behemoths sell themselves. They have more staff and more recruiters. It might take some jobs away from start-ups because they'll be more competitive in securing talent," said Rob Samet, a recruiter at Madison Search Partners, which focuses on mid- to senior-level executives in sales, business development and account management.
Longer term, though, the expansion of tech giants in New York will be good for the city's tech scene, as it would stimulate the growing tech ecosystem in the city.
Tatiana Becker, the founder of New York headhunting firm Niah Recruiting, recalls that when she moved from Seattle to New York in 2010, everyone asked, "Why take a tech job in New York?"
"Nobody wanted to move to New York, because it's not a tech hub." That's changed, she said, noting that start-ups in the city tend to be rooted around dominant industries such as fashion, finance or real estate.
"I don't feel like Amazon and Google will be a threat to start-ups. Seattle and the Bay Area have huge tech company headquarters and also many start-ups. I can confidently say that I think it will be a plus for New York City tech," said Becker.
If anything, Amazon and Google's expansion in New York could bolster more investing in start-ups, said Samet, noting that Google has a $3.5 billion venture capital fund, Google Ventures, while Amazon's Jeff Bezos has a personal venture capital portfolio, Bezos Expeditions. Both companies invest in tech start-ups as well as other industries. Google Ventures has invested in Outdoor Voices, Uber, Jet, Nest and others, while Bezos Expeditions has invested in Makerbot, Nextdoor.com and Uber.
New York City tech start-ups raised more than $25 billion from venture capital firms in 2018, according to Built in New York, citing data from Crunchbase. In the third quarter, New York-area companies raised more venture capital than San Francisco, according to a report by PricewaterhouseCoopers and CB Insights.
"I don't see the venture capital dollars drying up anytime soon unless 'the big R' happens," said Samet, referring to recession. If that happens, then even more talent would likely flock to larger companies. Meantime, he sees a lot of consolidation in ad tech and marketing tech, while fintech has been growing steadily.
Overall job growth was strong in 2018, both in New York and nationwide, and Kolko said he expects growth to slow somewhat in 2019, due in part to anticipated interest-rate hikes, which could slow growth.
The impact should be minimal to New York City, he said, because industries that are more sensitive to external forces, such as oil prices, exchange rates, or tariffs, tend to be industries that are not concentrated in New York, such as mining or manufacturing. Industries that are poised for continued growth, such as health care and services, tend to be concentrated in big cities, such as New York.