North American tech talent bounced back from the pandemic to post job gains across most top markets in 2021, though the industry’s resilience will be tested again amid economic turmoil in 2022, according to a new report from CBRE. Meanwhile, the tech industry has embraced remote work as a new way to expand; Nearly a quarter of all tech job listings now are for remote positions, found the global leader in commercial real estate and investment in its annual Scoring Tech Talent report, for 2022.
CBRE’s Scoring Tech Talent report ranks the top 75 tech markets in the U.S. and Canada and outlines the industry’s job-growth trends amid economic shifts and increased remote hiring. Overall, the U.S. added a net 136,000 tech talent jobs last year across established hubs such as the San Francisco Bay Area, New York and Seattle as well as smaller markets like Nashville, Cleveland and California’s Inland Empire.
Leading Canada’s tech talent growth are Toronto, Vancouver and Calgary, among others.
In the U.S., tech talent job growth of roughly 2.5% in 2021 matched non-tech job growth. Amid the economic turmoil of 2020, tech talent registered a 0.8% job gain in comparison to a 5.5% decline for non-tech jobs. The tech industry’s impact on U.S. office leasing also dipped and recovered, going from 21% in 2019 to 17% in 2020 and back to 21% last year.
“Tech talent and the broader technology industry have time and again proven resilient amid economic cycles,” said Colin Yasukochi, Executive Director of CBRE’s Tech Insights Center in San Francisco. “We’ve seen in the past that, when the tech industry retrenches, companies tend to eliminate support jobs in favor of retaining their tech talent. Meanwhile, North American tech markets continue to produce innovations that draw customer demand. And now increased remote hiring can spread tech talent job growth across all markets.”
Growth within tech talent professions and industries was widespread in 2021. The industries that added the largest total (gross) of tech talent were the tech sector (110,300 jobs), life sciences (37,800) and the financial services, insurance and real estate category (18,900). The tech talent professions that added the most jobs overall were software developers (159,500 jobs) and tech managers (27,900).
Movement In The Top 50
CBRE’s analysis of top North American tech talent markets found the same top five markets from last year: In order, the San Francisco Bay Area, Seattle, Toronto, Washington, DC, and New York City. Much of the rest of the top 50 shifted as factors such as tech labor-pool size and growth and the local tech-industry outlook, among others, shuffled many spots.
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CBRE’s report, now in its 10th year, ranks the top 50 North American markets by analyzing 13 measures of their ability to attract and develop tech talent, including tech graduation rates, tech-job concentration, tech labor pool size, labor and real estate costs.
CBRE also ranks the Next 25 emerging tech markets on a narrower set of criteria. Tech talent is defined as 20 key tech professions — such as software engineers and systems and data managers — across all industries.
Remote Job Growth
Remote jobs have multiplied within tech talent categories. Of U.S. tech job openings listed in the 12 months ended in this year’s second quarter, 22% provided remote work as an option, according to labor-data provider EMSI. That’s up from a 4% share in 2018 and 2019.
The markets with the most overall listings for remote tech jobs in that timeframe were San Francisco (6,506), Los Angeles/Orange County (6,285), Dallas/Fort Worth (4,966) and New York City (4,608). And those with the highest percentage of remote jobs among all of their job listings were San Antonio (36.8%), Madison (35.6%), St. Louis (29.5%) and Phoenix (29%). But listing a remote job in a given city doesn’t mean the employee has to live or work in that city.
Real Estate Considerations
CBRE’s analysis examined a few real estate measures amid the job metrics to gauge the most and least expensive markets. The most expensive market in the top 50 for a 500-person tech company leasing 75,000 sq. ft. is the San Francisco Bay Area at $69.2 million in combined annual real estate and labor costs. The least expensive is Quebec City at $32.1 million.
For office asking rents, New York City is the most expensive at $77.45 per sq. ft. per year, and Cleveland the least expensive at $18.71. Housing affordability is a consideration, too. New York registered the highest ratio of annualized apartment rent to average tech wage (32 percent), and Montreal the lowest (12.9 percent).
Diversity & Demographics
For the second year, CBRE analyzed workforce diversity. The tech industry historically has employed a lower ratio of Hispanic, Black and female workers than the overall average of U.S. office-using jobs. In new analysis this year, CBRE found a higher concentration of Hispanic, Black and female workers in the lower wage ranges of the tech industry.
A harbinger of change, albeit slow, to these ratios is found in the ranks of tech-degree graduates. Hispanics, Black and other underrepresented ethnicities comprised a larger share (24.3%) of 2020 tech graduates than they do the overall tech talent workforce (22%). And women accounted for a larger share of the 2020 tech degrees (25.7%) than the tech talent workforce (24.4%).
CBRE also examined each market’s performance across numerous demographic categories, including concentration of millennials in the tech talent workforce (Austin leads at 25.6%) and that of Gen Z (Madison leads at 9.4%). Other metrics examined include the percentage of population with a four-year degree or higher (Washington, DC, leads at 51.7%), tech degrees awarded in 2020 (New York City leads at 21,354), tech labor concentration (Ottawa tops the list at 11.6%) and net gain or loss of tech talent since 2016 (Toronto added the most: a net of 88,900 tech jobs created and filled in that span).
Click here to download full report from CBRE.