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North American tech talent bounced back from the pandemic to post job growth in most major markets in 2021, although the industry’s resilience in 2021 Although it will be tested again in the economic crisis in 2022, a new report from CBRE. Meanwhile, the tech industry has embraced remote work as a new way to expand; Currently accounting for a quarter of all tech job listings in commercial real estate and investment, the annual Tech Talent Report has found it to be a global leader for 2022.
CBRE’s Grading Tech Talent Report ranks 75 tech markets in the US and Canada and outlines job growth trends in the industry amid economic shifts and remote hiring. Overall, the US added a net 136,000 tech talent jobs last year in smaller markets like the San Francisco Bay Area, New York and Seattle, as well as smaller markets like Nashville, Cleveland and inland California.
Toronto, Vancouver and Calgary, among others, are at the forefront of Canada’s tech talent boom.
In the US, roughly 2.5% of tech talent job growth in 2021 is matched by non-tech job growth. In the year In the 2020 recession, tech talent posted a 0.8% job gain compared to a 5.5% decline in non-tech jobs. The tech industry’s influence on US office rent has waned and recovered, from 21 percent in 2019 to 17 percent in 2020 and back to 21 percent last year.
“Tech talent and the broader tech industry are resilient over and over again between economic cycles,” said Colin Yasukochi, managing director of CBRE’s Tech Insights Center in San Francisco. “As the tech industry shrinks again, we’ve seen in the past that companies are shedding support jobs in an effort to retain tech talent. Meanwhile, North American technology markets continue to produce new innovations that capture consumer interest. And now increased remote hiring technology skills can expand job growth across all markets.
The growth in tech talent careers and industries in 2021 was extensive. The industries with the largest total (gross) additions in the technology sector were technology (110,300 jobs), life sciences (37,800) and the financial services, insurance and real estate category (18,900). The tech talent that added the most jobs overall were software developers (159,500 jobs) and technology managers (27,900).
Movement in the top 50
CBRE’s analysis of the top North American tech talent markets found the same top five markets as last year: the San Francisco Bay Area, Seattle, Toronto, Washington, D.C., and New York City, respectively. Most of the rest of the 50 changed depending on the size and growth of the tech labor pool and the local tech-industry outlook, among other factors.
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CBRE’s report, now in its 10th year, ranks the top 50 North American markets by analyzing 13 metrics that measure their ability to attract and develop tech talent, including tech graduation rates, tech-job concentration, tech workforce pool size, labor and real estate costs.
CBRE also ranks the next 25 emerging technology markets with narrow criteria. Tech talent is defined as 20 key technology occupations – such as software engineers and systems and data managers – across all industries.
The development of remote work
Remote jobs have multiplied across tech talent categories. Of the U.S. tech vacancies listed in the 12 months ending in the second quarter of this year, 22% offered remote work as an option, according to labor data provider EMSI. This is an increase from the 4% share in 2018 and 2019.
The markets with the highest totals for remote tech jobs in that time frame were San Francisco (6,506), Los Angeles/Orange County (6,285), Dallas/Fort Worth (4,966) and New York City (4,608). And among all their job listings, San Antonio (36.8%), Madison (35.6%), St. Louis (29.5%) and Phoenix (29%) had the highest percentage of remote jobs. But listing a remote job in a certain city does not mean that the employee must live or work in that city.
Real estate valuation
CBRE’s analysis examined a handful of real estate metrics among operating metrics to gauge the most and least expensive markets. The most expensive market of the 50 for a 500-person tech company that leases 75,000 square feet is the San Francisco Bay Area, with $69.2 million in annual real estate and labor costs. The most expensive is Quebec City at $32.1 million.
New York City is the most expensive office rent at $77.45 per square foot per year, and Cleveland is the most expensive at $18.71. Housing affordability is also taken into consideration. New York recorded the highest annual apartment rent and average tech salary (32 percent) and Montreal the lowest (12.9 percent).
Diversity and demographics
For the second year running, CBRE analyzed workforce diversity. The tech industry has historically employed fewer Hispanic, black, and female workers than the average average for U.S. offices overall. In a new analysis this year, CBRE found a higher concentration of Hispanic, black and female workers in the tech industry’s lowest-wage range.
For these ratios, a slow but significant change is found in tech-degree graduates. Hispanics, blacks, and other underrepresented ethnic groups comprise a larger share (24.3%) of tech graduates in 2020 than the total tech talent workforce (22%). And in 2020, women accounted for a larger share of tech degrees (25.7%) than the tech talent workforce (24.4%).
CBRE also examined the performance of each market across several demographic categories, including millennials in the tech talent workforce (Austin leads with 25.6 percent) and Gen Z (Madison leads with 9.4 percent). Other metrics examined include population with a four-year degree or more (Washington, D.C. leads with 51.7 percent), technology degrees awarded in 2020 (New York City leads with 21,354), tech workforce concentration (Ottawa tops the list with 11.6 percent), and Gaining or losing tech talent as of 2016 (Toronto added the most: it created a network of 88,900 tech jobs and was filled during that time).
Click here to download the full report from CBRE.
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