Korn Ferry reveals what salaries look like in Amazon HQ2 cities

03 December 2018 Authored by Consulting.us

Amazon announced earlier this month that it would splitting its 50,000 person HQ2 supplementary corporate headquarters between two locations:  Arlington County, Virginia and Queens, New York. Meanwhile, Nashville will receive an operations center that will employ 5,000. HR consultancy Korn Ferry looked at the average salaries of employees in those cities to give a flavor of what salaries might look like.

Over 200 US cities, along with a number in Canada and Mexico, threw their hats in the ring to be the location of Amazon’s new HQ2 supplementary corporate headquarters. The e-commerce and tech giant said the new facility would be the site of 50,000 high-paying jobs.

Predictably, cities threw incentives and tax concessions in hopes of wooing the firm. Nashville reportedly offered Amazon an annual $500 per-job grant and 50% off property taxes for 15 years, along with fully funding any needed connections to the public transit.

In the end, Amazon went with two locations on the eastern seaboard with the highest densities of tech, engineering, management, policy, and lobbying talent. The firm will equally split 50,000 future HQ2 jobs between locations in Queens, NY, and Northern Virginia, VA. Meanwhile, Nashville won the consolation prize of a smaller operations center which will employ 5,000 workers. The city is a noted center of logistics talent and expertise.Average employee salaries in selected cities

In a new analysis from Korn Ferry, the HR consultancy revealed the average salaries of entry-level, mid-level, and senior-level employers in each city/region getting new Amazon locations, as well as Seattle, home of Amazon's HQ. The analysis drew on numbers from the firm’s US pay database, which includes the compensation practices of 2,300 companies and over 5.9 million employees.

The NYC borough of Queens had the highest average salary in all three categories, though Northern Virginia and Seattle were very close in all three. The average salaries across the three cities/regions for entry, mid, and senior level employees, were $65,409, $119,487, and $216,234, respectively. Meanwhile, due to decreased cost of living, as well as perhaps a lower concentration of ultra-high-earning individuals like your Wall Street types and Washington lobbyists, Nashville had lower salaries across the board, at $52,926, $ 94,085, $177,244 for entry, mid, and senior-level workers.

The analysis release didn’t specify that the figures were for ‘professional’ jobs, ‘corporate’ jobs, or ‘tech.’ If the figures are for all jobs, they cast less light on what compensations figures will be like at HQ2, other than the fairly obvious point that jobs will have to pay out more in New York and DC (Virginia) than in Nashville (mostly due to the different cost of living). There’s a big gap between what a warehouse worker and an AI programmer are paid, so it’s not very useful to lump all figures together and average it out to get a number which doesn’t represent anyone’s wages.

When a lot of numbers that are on opposite ends of the continuum are lumped – like low-wage retail employees, high-skilled management types, and tech experts (at any phase of their career), a pretty distorted figure comes forward. If Jeff Bezos and all warehouse workers are added together, the average salary looks great, but it doesn’t give an accurate representation of anyone’s wage. In cases like this, it’s often more illustrative to use a median figure than a mean.

In any matter, the jobs at HQ2 aren’t the low-paying warehouse jobs of fulfillment centres, but the high-paying corporate headquarters variety for business and management experts, programmers, engineers, AI buffs, and digital gurus. And to get that talent, Amazon will have to pay up.

“Several factors feed into average salaries, such as geographic location, cost of living, and availability of qualified talent,” said Bob Wesselkamper, Global Head of Korn Ferry Rewards and Benefits Solution. “However, Amazon’s expansion will create a talent ripple in these chosen cities. It is certain the war for talent will be fierce, and the economy in these markets will get a boost.”

Sanders versus Bezos

Amazon has received a lot of media attention for the payment and work conditions its warehouse workers. The company attracted the ire of politician Bernie Sanders, who labeled the firm as engaging in ‘greed which seems to have no end,’ paying low wages to its micro-managed fulfilment center workers as founder Jeff Bezos amassed the world's largest fortune.

There were reports of employee conditions that included timed bathroom breaks, constant video surveillance, poor air conditioning, and heavy monitoring of productivity that led to a grueling and alienating work environment.

After initially rebuffing the criticism of Sanders and others, saying that its salaries were commensurate with average hourly wages in retail (read: at or near minimum wage), and that its warehouses were ‘climate-controlled, safe workplaces,’ Amazon responded by hiking their minimum wage to $15 for all US employees in November.

"We listened to our critics, thought hard about what we wanted to do, and decided we want to lead," said Amazon CEO Jeff Bezos in a statement. "We're excited about this change and encourage our competitors and other large employers to join us."

Depending on how rapidly real-world automation and AI advances, the work environment and pay of warehouse workers may be a moot point at Amazon in the future, anyway.

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