Morales says Austin provides an alternative for tech firms currently in larger, more expensive markets.
AUSTIN, TX—Tech labor concentration–or the percentage of total employment–is an influential factor in how tech-centric a market is and its growth potential. Austin recently moved up two spots to number six on CBRE's Tech Talent Scorecard, part of its Tech Talent Report, which ranks 50 US and Canadian markets according to the ability to attract and grow tech talent.
The scorecard is determined based on 13 unique metrics, including tech talent supply, growth, concentration, cost, completed tech degrees, industry outlook for job growth, and market outlook for both office and apartment rent cost growth.
Austin has a tech talent labor pool of 69,610 or 7% of its total employment–a significant cluster when compared to other Texas markets–compared to the national average of 3.5%. The top-five markets for tech talent in 2018 were the San Francisco Bay Area, Seattle, Washington, DC; Toronto (the first time a Canadian market made the top five) and New York, all large markets with tech labor pools of more than 50,000. Austin surpassed Raleigh-Durham (ranked seventh last year) and Atlanta (ranked fifth last year). Its rate of 49.2% is above the US average of 31.3%. Austin's tech talent labor pool grew 20% during the past five years, adding 12,000 tech workers to the metro area.
“It's not surprising to see Austin move up on the list this year,” says Erin Morales, senior vice president at CBRE in Austin. “Austin's labor quality continues to be considered some of the best in the country. With large universities in town and strong recruitment from other markets, tech firms are able to feel confident in their ability to find skilled talent in Austin.”
Tech talent in Austin continues to rate high on the quality –versus-cost analysis, meaning wages for an average software engineer are well priced compared with the high level of quality working in the metro.
Austin produces a strong number of tech graduates but continues to attract talent and has added more than 1,000 more tech jobs than tech graduates during the past five years.
“Austin has become a key US market for tech, offering lower office rents for employers and an overall lower cost of living for employees,” Morales tells GlobeSt.com. “This city provides a great alternative for tech firms in larger, more expensive markets. Austin offers the high quality of life these companies require for their workforce while still being a cost-effective option in terms of labor costs and real estate.”
Comparing the annual average apartment rent with the annual average tech-worker salary, Austin's rent-to-tech wage ratio is just 15.3%, making Austin a much more affordable place to live for tech workers when compared with other top-ranked markets.
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Lisa Brown
Lisa Brown is an editor for the south and west regions of GlobeSt.com. She has 25-plus years of real estate experience, with a regional PR role at Grubb & Ellis and a national communications position at MMI. Brown also spent 10 years as executive director at NAIOP San Francisco Bay Area chapter, where she led the organization to achieving its first national award honors and recognition on Capitol Hill. She has written extensively on commercial real estate topics and edited numerous pieces on the subject.
