July 12, 2021
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Technology companies were some of the most resilient throughout COVID-19 and are now preparing for high-paced growth. In Scoring Tech Talent, CBRE explores what markets have the biggest tech talent pools—and what markets are seeing the biggest growth.


Tech talent workforce growth in 2020 slowed significantly from its 4.1% rate in 2019 yet emerged as one of the most resilient sectors during the COVID-19 pandemic. But between migration trends and a new, fast-paced growth in 2021, the best tech talent job markets are changing—and it has implications for workforce and real estate decisions.

CBRE’s annual Scoring Tech Talent report is intended to serve as a resource for decision-making and success in building tech talent teams to fulfill critical business and innovation objectives in the years ahead.

What’s in the Report

Scoring Tech Talent is a comprehensive analysis of labor market conditions, cost and quality in North America for highly skilled tech workers.

The top 50 markets in the U.S. and Canada are ranked according to their competitive advantages and appeal to both employers and tech talent employees. Twenty-five additional North American tech talent markets are also analyzed, as well as 10 up-and-coming Latin American markets.

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EXPLORE TECH LABOR MARKETS

Key Takeaways

The Top Tech Talent Markets

This year’s top-ranked tech talent markets are the San Francisco Bay Area, Seattle and Washington, D.C., while the markets that climbed the most in the rankings are Greater Los Angeles/Orange County, Detroit and Calgary.

What Markets Produce the Most Tech Talent Graduates…

New York Metro, Boston, Chicago and Washington, D.C. produced more graduates than jobs and were the most “brain drained” markets. The number of tech degree graduates was compared with tech talent job creation in each market to determine brain gains or brain drains.

…and Where Are Those Tech Talent Graduates Going?

Toronto, Seattle, Montreal, Vancouver and Charlotte gained the most tech talent. The number of tech degree graduates was compared with tech talent job creation in each market to determine the balance of supply and demand.

The Most Expensive and Least Expensive Tech Markets

The total annual labor and real estate cost ranged from $31 million in Waterloo, Canada, to $68 million in the San Francisco Bay Area for the typical 500-person tech company using 75,000 sq. ft. of office space.

Evaluating Talent Diversity in Tech Markets

Pittsburgh, Charlotte and Nashville have the most diverse tech talent workforces, while San Antonio, Greater Los Angeles/Orange County and Austin have the least diverse. Washington, D.C., had the highest relative share of females, and Cleveland had the lowest share.

 

Ranking Each Tech Talent Market

During the pandemic-induced economic slowdown, businesses pivoted, innovated and relied even more on tech talent workers to meet challenges. This kept the tech talent labor market highly competitive and supply constrained last year as hiring expanded beyond major tech hubs.

Tech talent occupations rose over 2020 with a high demand for software developers in particular. Smaller markets benefitted from remote work as some urban workers left densely populated major markets amid pandemic concerns.

How CBRE Ranks Each Tech Talent Market

  • Fifty of the largest markets by number of tech talent professionals in the U.S. and Canada were analyzed to create a scorecard ranking.
  • The scorecard uses 13 metrics to measure each market’s depth, vitality and attractiveness to companies seeking tech talent and to tech workers seeking employment.
  • Each metric is weighted by its relative importance to job creation and innovation.
  • Tech talent concentration metrics have the highest weights because they signify clustering of tech workers.
  • Labor costs for tech talent are weighted more heavily than office rents because companies allocate more capital to labor than to real estate.

What Are the Top Tech Markets?

The San Francisco Bay Area retained the top spot, while Seattle and Washington, D. C., switched positions from 2020 to second and third, respectively. Changes in data led to larger geographies in two markets (New York Metro and Greater Los Angeles/Orange County) and put three Canadian markets in the top 50 markets (Waterloo, Quebec City, and Edmonton), which debuted at 21, 37 and 38, respectively.

The biggest movers were Greater Los Angeles/Orange County, rising by eight spots, and Detroit and Calgary, both rising by six spots.

 

Tech Talent Scorecard Ranking

Source: CBRE Research, CBRE Econometric Advisors, U.S. Bureau of Labor Statistics, Statistics Canada, Oxford Economics, The National Center of Education Statistics, National Science Foundation, Axiometrics, 2021.

 

Tech Talent Labor Pools (2020)

Source: U.S. Bureau of Labor Statistics (Metro) April 2021, Statistics Canada (Metro), 2021.

 

Where Tech Graduates Are Moving

Graduates do not always remain in the labor market where they earn their degrees; they often migrate to locations that offer the most job opportunities or have the best pay.

We analyzed tech-related graduation data and tech-related employment growth to identify the difference between where tech talent workers are employed and where they were educated. Toronto is an outlier for tech talent job creation, adding 54,700 more tech talent jobs than graduates.

Other top tech talent job creators are Seattle, Montreal, Vancouver and Charlotte. On the other end of the spectrum, New York Metro, Boston, Chicago and Washington, D.C posted the largest surplus of tech-degree graduates locally and thus experienced the biggest talent drain.

Calculating Brain Gain and Brain Drain

We call a market with higher tech job creation than graduates with a tech degree a brain gain market. In contrast, we call a market with more tech degree graduates than tech job creation numbers a brain drain market.

In 2020, 16 markets posted a five-year brain gain the same as in 2019, suggesting there still is a high level of demand and inadequate supply for the most sought-after tech skills and locations.

 

Source: CBRE Research, U.S. Bureau of Labor Statistics, Statistics Canada, National Center for Education Statistics (Metro), Canadian Universities, 2021.

 

How Diverse are Tech Talent Hubs?

The tech talent workforce is slowly becoming more diverse in terms of race, ethnicity and sex. The COVID-19 pandemic has created an opportunity to accelerate the process via expanded remote work and workforce analytics.

Strategic approaches to diverse team building can be enhanced by greater use of data and benchmarking analytics that identify where diverse talent is located and being developed. Our analysis details workforce race/ethnicity and sex by geography, industry and job classification; and college tech degree graduates’ race/ethnicity and sex by geography.

Diversity in Technology Employment

Tech talent across all industries remains predominantly White, Asian and male relative to total employment and office-using employment. The tech industry, which accounts for 40% of tech talent in the U.S., had demographics similar to tech talent across all industries.

Females in the Technology Industry

Females were significantly underrepresented within tech talent occupations across all industries. Within the tech industry, females were more underrepresented in tech occupations at 22% compared with 27% across all industries.

Diversity by Technology Occupation

Segmenting tech talent occupations across all industries in two broad categories showed that female workers were concentrated within Computer Support, Database & Systems occupations at 69%. The other 31% of female workers were Software Developers, Programmers & Engineers.

 

U.S. Workforce by Race/Ethnicity for Selected Industries (2019)

Source: U.S. Census, IPUMS and CBRE Research, May 2021.
Note: Office-using industries include information, financial activities and professional & business services (excluding tech industry within these categories).

 

U.S. Workforce by Sex for Selected Industries (2019)
% Female of Total Workforce (Male and Female)

Source: U.S. Census, IPUMS and CBRE Research, May 2021.
Note: Office-using industries include information, financial activities and professional & business services (excluding tech industry within these categories).

 

What Tech Markets are the Most and Least Diverse

For underrepresented race/ethnic groups, the most diverse tech talent markets were Pittsburgh, Charlotte, Nashville, Atlanta and Rochester. The least diverse markets were San Antonio, Greater Los Angeles/Orange County, Austin, San Francisco Bay Area and San Diego.

 

U.S. Tech Talent Occupation Category by Race/Ethnicity & Sex (2019)

Source: U.S. Census, IPUMS and CBRE Research, May 2021.

 

Underrepresented Race/Ethnic Groups in U.S. Tech Talent Workforce by Market (2019)

Source: U.S. Census, IPUMS and CBRE Research, May 2021.

 

For females, the most diverse tech talent markets were Washington, D.C., Sacramento, Kansas City, Boston and Hartford. The least diverse markets were Cleveland, South Florida, Richmond, Orlando and St. Louis.

 

Females in U.S. Tech Talent Workforce by Market (2019)

Source: U.S. Census, IPUMS and CBRE Research, May 2021.

 

Tech Degree Graduate Diversity & Current Enrollment

The pipeline of recent tech degree graduates offers opportunities to build the next generation of talent—but at present, most recent tech graduates are White, Asian and male.

The U.S. has a future tech degree graduate pipeline of about 1 million, according to the National Student Clearinghouse Research Center and estimates by CBRE of students enrolled in bachelor’s or higher programs as of Fall 2020. While diversity breakdowns for these students was not available, trends suggest they will represent greater tech talent workforce diversity than exists today.

 

U.S. Tech Degree Graduates’ Race/Ethnicity & Sex (2019)

Source: IPEDS.
Note: Total tech degree graduates and sex breakdown includes U.S. resident and foreigners. Race/ethnicity breakdown excludes unknown races and foreigners.

 

Diversity in Technology: A Challenge & Opportunity

Greater diversity of the tech talent workforce has been slow to progress, but remains an opportunity for the industry—and one made potentially easier by the broader adoption of hybrid work following COVID-19.

Tech talent employers increased job postings that offer remote working arrangements to 12% for the 12 months ending in February 2021, up from only 5.5% in the previous 12-month period, according to EMSI data. This hybrid approach shows promise to expand tech talent recruitment across all markets and increase workforce diversity.

Find out where tech talent is headed in 2021

Get the full report from CBRE to identify market growth opportunities, labor migration trends and more now and in the years ahead.

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