Tightening availability of tech talent in leading markets has spurred hiring momentum in smaller and upstart markets in the United States and Canada—such as Tucson, Arizona, and Waterloo, Ontario—as expanding tech employers seek additional labor pools, according to CBRE’s annual Scoring Tech Talent report.
Overall, big markets continue to produce the largest volumes of jobs and tech degree graduates, with the San Francisco Bay area, Toronto, and New York City adding the most tech jobs in the past five years. But several years of low unemployment rates have dampened the momentum of many leading tech talent markets; 15 of the top 50 markets in CBRE’s report registered an accelerated, two-year pace of tech job growth, down from 23 last year.
Partly as a result, smaller markets outside of CBRE’s top 50 have absorbed some tech-labor demand. For the first time, CBRE’s report includes a list of fast-growing “opportunity markets,” led by Tucson with a 90 percent increase in tech jobs over five years; Hamilton and Waterloo, Ontario, with more than a 40 percent gain; and Las Vegas’s 35 percent gain.
The Bay Area and Seattle remain the two highest-rated tech talent markets, respectively, and Toronto climbed one spot to number three overall. Washington, D.C., and New York City—the top two regions for producing tech-degree graduates—round out the top five. CBRE’s separate list of “momentum markets” that most accelerated their tech talent employment growth is led by Orlando, with a 14.1 percentage point increase in growth rate; San Diego, with a 10.2 percentage point increase; and Chicago, with an 8.0 percentage point increase.
CBRE’s interactive Tech Talent Analyzer provides a snapshot of how each market performs in multiple categories. For example, markets ranking as the most competitive for hiring tech talent based on labor supply, wage costs, and talent quality include the Bay Area, Seattle, and Denver.
Ultimately, national momentum in tech talent expansion can be influenced at least partly by growth in smaller “opportunity markets” outside of CBRE’s top 50. Many, like Des Moines, Iowa, and Louisville, Kentucky, generated double-digit percentage gains in tech talent employment and wage growth over the past five years.
“The tech talent labor pool in the U.S. grew by 16 percent in the past five years, compared with 9 percent for the U.S. overall. That type of growth can deplete even the deepest pools of qualified labor,” says Colin Yasukochi, director of research and analysis for CBRE and coauthor of the report. “Many of the opportunity markets offer quality labor pools that are untapped and have high growth potential. These markets can be ideal for small-scale operations, startups, and tech jobs with nontech employers like banks, media, and services firms that comprise nearly two-thirds of the tech labor pool.”