Matt Walters says young and tech talent will keep Seattle in the discussion for years to come.
SEATTLE—High-quality tech talent and the ability to entice tech workers from outside the region with high wages and more affordable housing options has led to a surge of growth from local and West Coast-based tech firms. As a result, Seattle remained at the number two spot on CBRE's Tech Talent Scorecard.
CBRE's Scoring Tech Talent Report ranks 50 US and Canadian markets according to the ability to attract and grow tech talent. The top five markets for tech talent in 2018 were the Bay Area, Seattle, Washington, DC, Toronto (the first time a Canadian market made the top five) and New York City, all large markets with a tech labor pool of more than 50,000. The scorecard is 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.
“Seattle has continued to solidify its spot as a top city for tech talent,“ said Matt Walters, senior vice president, CBRE. “The city has experienced an unprecedented growth from local, national and global tech companies, which has continued to strengthen the region's talent pool, allowing Seattle to sustain its number two rank right behind San Francisco.”
With a rate of 63.1%, Seattle has the most educated workforce in North America of residents older than 25 holding a bachelor's degree or higher. Seattle has the sixth largest tech talent labor pool. Its Millennial population growth also grew the most at 22.7%, now ranking sixth for concentration of Millennial residents.
“Seattle's highly educated workforce and top quality of talent are attracting tech companies outside of the usual suspects,” Brian Biege, senior vice president, CBRE, tells GlobeSt.com. “The city's growing population of Millennials also speaks to the draw Seattle has for young professionals.”
More than 20,000 tech jobs were added in Seattle in the past five years. As the market attracted new talent, the average wage grew 21%, making it the second highest compensation market. Comparing the annual average apartment rent with the annual average tech-worker salary, Seattle's rent-to-wage ratio for tech employees is 17.5%, well below similar markets and the affordability standard of 30% of income to housing.
“In the past year, we've seen a growing number of tech companies building their presence in Seattle, many for the first time,” said Biege. “Thanks to Seattle's quality of talent and the innovation happening here, this trend will likely continue for the foreseeable future.”
Tech labor concentration–or the percentage of total employment–is an influential factor in how tech-centric the market is and its growth potential. Seattle has a tech talent labor pool of 145,140, or 8.8% of its total employment, compared to the national average of 3.5%.
“Looking at the next three to five-year window, we're confident that we will see more and more tech firms from out of the region continue to look at Seattle as a market where growth can be focused,” Walters tells GlobeSt.com. “It's a labor strategy that companies are taking into consideration, and the talent that continues to flow out of the universities and collective tech sector will keep Seattle in the discussion for years to come.”
CBRE's interactive Tech Talent Analyzer found the San Francisco Bay Area, Austin and Seattle to be the most competitive markets to hire tech talent based on labor market supply/demand, wage costs and talent quality.
“Strong economic conditions and tightening labor markets are constraining tech talent job growth and increasing costs,” said Colin Yasukochi, director of research and analysis for CBRE in the Bay Area. “This has accelerated the expansion of tech talent pools across the US to meet this demand, starting with increased numbers of tech degree graduates. Accordingly, demand for commercial real estate in large and previously under-utilized regions is on the rise from both start-ups and established companies.”
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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.
