This article was published in the Summit 2021 issue
by Eric Smith, Senior Vice President and CBRE Tech & Media Practice Group member
Each year, CBRE publishes its Scoring Tech Talent report to highlight the growth of the tech industry by digging deep into labor trends throughout the Americas. And although slower growth occurred across most major industries during 2020, tech still emerged as one of the most resilient sectors during the COVID-19 pandemic. The rise of remote work and the need to more heavily rely on technology provided an opportunity for tech to drive growth. Looking ahead, advancements in technology will be increasingly important as companies develop new models for where and how we work. But first, let’s take a look at the metrics included in this report and how the Salt Lake tech market fared (and note that for purposes of this report, ‘Salt Lake’ includes both Salt Lake and Utah counties).
The Scoring Tech Talent report uses various metrics to individually analyze and rank each of the top technology markets across the nation. Among the metrics are data points like labor pool quality, affordability, and diversity. The Salt Lake market was included among the top 50 overall tech markets, ranking 18th in North America, which is quite significant when you consider our population size as compared to major markets like Boston, Seattle and Vancouver. Salt Lake City’s tech talent labor pool has grown by 33.9% since 2015 to rank as the 30th largest nationally, at 50,070 workers. Tech hot spots, like Sandy, Draper and Lehi, which house a number of large technology firms and headquarters, helped bolster the market’s ranking. The area is so significant in its growth that CBRE recently opened a satellite office at Traverse Ridge Center III in Lehi, dubbing it our ‘Utah County Tech Center’ office. Other major tech markets that one would expect to see on this list were also included in the highest rankings, with the San Francisco Bay Area; Seattle; Washington, D.C.; Toronto; and New York City landing the top five slots in the report.
Labor Pool Quality
This report offers a detailed look into what’s really driving the local tech market. One of the insights that emerged about the Salt Lake market is that we have a strong pipeline of highly educated talent, which bodes well for our area; however, the number of graduates from local universities currently outnumbers the total number of tech jobs being created. This phenomenon has resulted in the Salt Lake market being categorized as a “Brain Drain” market—a market in which there is more available talent than job openings. There are approximately 9,871 fewer technology job creations than there are tech graduates, which results in local tech talent exiting the market to find work. However, this provides an opportunity for companies to capitalize on local talent.
The national pipeline for continued labor growth, so far, is promising. Engineering degrees almost doubled in the last four years, and other technical degrees, such as Math/Statistics and Tech Engineering grew 36% and 44%, respectively.
One of the other insights that came from this year’s report is the fact that the Salt Lake tech market has high labor quality with only moderate labor costs. It is one of the report’s lowest-cost large markets for businesses, based on lease rates and wages. The average wage for tech in Salt Lake is $89,184; compare this to another western city like Denver ($107,481), Seattle ($126,730) or San Francisco ($144,370) and you can see how this factors into Salt Lake’s attractiveness to business owners. This provides an ideal opportunity for companies looking to relocate or expand to the area—high-quality labor is readily available, and overall labor costs are much more affordable than comparable market areas, a potential win-win for both employers and employees.
When considering workforce diversity, the local market’s tech segment has a slightly less diverse talent pool than that of the total workforce. However, one significant factor where the area pulls ahead of the nation is in its youthful labor pool. Salt Lake has the eighth-most concentrated millennial market in the report, at 30.6% compared to the national average of just 22.0%. A young market brings opportunity, and this factor may be one of the variables contributing to our ‘Brain Drain’ ranking in this report.
Technology is known for being an industry filled with movers and shakers, and the industry continues to be critical as the world shifts to adjust to the new business environment resulting from the COVID-19 pandemic. During 2020’s economic slowdown, businesses pivoted, innovated, and relied even more on tech talent workers to meet challenges, which kept the tech talent labor market highly competitive and supply-constrained last year. Technology has also aided broad migration across multiple markets, where smaller markets benefitted from remote work as some urban workers left densely populated major markets amid pandemic concerns. During such uncertain times, much of the stability many experienced in 2020 was facilitated by technology, and it continues to drive more decisions and innovation as businesses look to provide a ‘new normal’ in the coming months.
To view the full report, 2021 Scoring Tech Talent, CBRE July 2021, click here.
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