Saturday 26 May 2018

Why southside-obsessed tech firms are the new snobs

‘It may be a not-so-subtle reminder to planners that decisions on infrastructure such as light rail have long-term commercial effects...’
‘It may be a not-so-subtle reminder to planners that decisions on infrastructure such as light rail have long-term commercial effects...’
Adrian Weckler

Adrian Weckler

Would you put off hiring hundreds of people for your fast-growing tech company because the only offices available were on Dublin's northside? That's what Slack, the US-based booming messaging start-up, did.

A year ago, the company set up a pilot office in Dublin 8's Digital Hub with an IDA-backed promise to grow to 100 people. But it stopped at 30 people - because the only expansion offices available were on the northside.

It waited almost a year in this holding pattern, despite an urgent need to staff up as its business grew rapidly.

Last week, the company finally announced an office relocation near Harcourt Street in Dublin 2. With its southside headquarters secured, it is now set to go on a hiring spree of up to 180 people.

Why did the company put off its own international expansion to avoid the northside?

"We wanted to have an office that represented the culture we want to foster," said James Sherrett, head of Slack's Irish operation. "We want our employees to thrive, to have great lifestyle options and commuter options. That means cafes to go out to, places to go after work, parks close by, good bike lanes, good places to walk."

This is one of the most oft-repeated rationales heard among tech companies establishing offices in Dublin, especially those in the web or digital sectors. Recruitment is competitive, executives say, and the location of one's office is a material factor in getting the kind of staff who can often have their pick of companies to work for. The more in-demand a role is, the more critical it is for companies to be in a top southside neighbourhood in the city.

But not all tech companies have this built-in bias. Even among multinational tech firms in Dublin, which have the strongest attachment to southside-only office strategies, there are outliers.

The multinational firm Workday's Irish office, led by confirmed southside Dubliner Annrai O'Toole, has set up in the northside's Smithfield area. This is despite having many of the trappings of US tech culture and some pretty high-end engineering jobs.

Is it because O'Toole is a Dubliner, and isn't afraid of northside streets?

When Stripe established its headquarters in San Francisco, the Collison brothers did so in the Mission district - then a slightly out-of-favour area. It doesn't appear to have hurt that company's recruitment or its prospects at all.

So are tech companies being too precious about where they will and won't set up a Dublin office? Or is it just a hard market reflection on what areas might not succeed in ultra-competitive industrial sectors?

Slack is a curious case. Most of its jobs here are, and will be, customer service and account management roles. It is not competing for the same high-end engineers that higher-paying companies such as Google and Facebook are. (This also makes the IDA's role in backing such a strategy an interesting one. It won't comment on whether it financially contributed to Slack's set-up - but if it did contribute, it may unwittingly be funding a southside Dublin strategy for mid-tier jobs.)

This is not to downplay the serious problems that companies have in finding office space in the capital right now. The joint difficulties of bad planning and an ongoing hangover from the property crash mean new developments have come on to the market at a snail's pace, holding back business in Ireland.

There are few tech firms unaware of this: if you need to scale above 50 people, Dublin is a nightmare. But it is not completely shut off. Dublin 2 and Dublin 4 may be full, but commercial agents point out that there is still reasonable availability around the IFSC. This is often available at between a quarter and a third less than the €55 to €60 per square foot that an office around a prime Dublin 2 area costs.

Indeed, there is a whole row of modern offices adjacent to the north docklands (near Eastpoint) that have been available for at least two years, with no takers.

So is the bias toward a Dublin 2 or Dublin 4 office now irreversible for tech firms? And how does that sit with self-appointed notions of being 'disruptive' and 'lean'? Is it a symptom of easy money raised providing the luxury of top-end property shopping?

Many will say that this should be confined to the folder marked 'first-world problems'. And town planners outside Dublin will be playing the world's smallest violin.

But there may be serious signals, as well as warnings, about city-planning caught up in all of this. If a large number of high-value, high-skilled companies so roundly reject locating their staff in huge sections of the city, shoulder-shrugging will only go so far.

It may be a not-so-subtle reminder to planners that decisions on infrastructure such as light rail have long-term commercial effects, potentially shutting off areas of the city for development.

On a personal note, I have worked on both sides of the city. I much prefer the near-northside to the southside one - probably because it's less homogenised. But for tech firms, and for Dublin, the divide is getting sharper.

Sunday Indo Business

Business Newsletter

Read the leading stories from the world of Business.

Also in Business