Demand for tech talent is ramping up around the nation, and it’s not just the usual suspects that are seeing a surge of job postings.
Rising competition for tech talent is a trend with high stakes that transcend the tech industry itself, as small businesses around the nation could find themselves battling to retain employees with coveted tech skills. Experts say the rise of work-from-home arrangements could throw another wrench into the mix, as well.
The tech talent battle is one of several fronts likely to emerge in the tight labor market economists are expecting to take hold in the coming months, but it’s one with potential to affect commercial real estate, local economies and startup ecosystems around the nation.
Data from CompTIA, a Downers Grove, Illinois-based information technology trade association, shows tech employment is projected to grow 2.5% for the year nationally. After a lull in the second half of 2020, job postings for tech positions have increased four consecutive months, with openings growing to 307,000 nationally in March.
Tim Herbert, executive vice president for research and market intelligence at CompTIA, said the last few months show momentum building for tech jobs due to a combination of a strengthening economy and pent-up hiring demand.
The data shows tech job postings are soaring in ascendant tech markets like Atlanta, Dallas and Austin, Texas. Research from HR consulting firm Robert Half also found hiring is particularly strong in Miami, Detroit, Dallas and Seattle. Those markets aren't surprising.
But CompTIA provided additional data to the Business Journals that showed Milwaukee, Albany, New York; Boulder, Colorado; Des Moines, Iowa; and Oklahoma City all posted at least a 44% jump in hiring for tech jobs between the fourth quarter of 2020 and the first quarter of 2021.
Kathy Henrich, CEO of Milwaukee Tech Hub Coalition, said Milwaukee’s increase in tech job postings “doesn’t surprise me at all.”
“Part of it I think is a rebound effect,” she said, she citing recent data that shows tech jobs in Milwaukee County declined 0.6% in 2020. “This actually just says, people are reinvesting and rebounding from 2020.”
She added that the problem of not being able to find local technology talent isn’t just a Milwaukee problem — it’s a national problem. She also emphasized the importance of employers recruiting back people from other cities and states who have ties to Milwaukee, such as alumni of local universities, as well as the need for employers to invest in talent development.
“This is part of a national trend of hiring,” she said. “We’re going to have to invest in building our talent in addition to recruiting from elsewhere.”
Those rising star markets are leading the way for a host of midmarket metros that recorded a surge in tech openings in March.
Common threads among several rising markets are proximity to research universities and lower costs than big coastal metros.
One place where demand didn’t increase in March was Silicon Valley. Both San Francisco and San Jose, California, saw job openings decline during the month, according to CompTIA.
Herbert cautioned against reading too much into one month of data, particularly after Silicon Valley had strong job posting totals in February.
“On the other hand, there have been prominent employers that have announced a near indefinite extension of their work-from-home arrangements, so there may be an element of workers and employers opting to live and hire where they prefer,” Herbert said.
The flow of jobs from California to other metros in the Sun Belt, particularly Texas markets like Dallas and Austin, has been well-documented, but Herbert said there is not a precise way to quantify that trend at this time.
Even though job posted were down by 1,349 in California during the month, it still had 43,042 postings, which was comfortably more than Texas (27,978) or New York (15,028), which ranked second and third for total postings.
A big wrinkle in the equation is the rise of work-from-home arrangements.
Ryan Sutton, a Boston-based Robert Half district president of technology staffing services, said more employers are open to hiring tech talent from anywhere in the country.
The trend gives employers more flexibility and access to talent but will also further escalate an already intense battle for tech workers.
"Hire-from-anywhere policies will only heat up a tight candidate market because companies who were already having a hard time recruiting are no longer just working against their local competitors, but potentially desirable companies across the country," Sutton said.
Sutton said Robert Half is seeing increased flexibility for workers across numerous industries, but said the tech industry is one where some employers could go fully remote.
According to CompTIA, work-from-home job postings rose 13% in March. It’s likely the true number is even higher.
“There is likely a segment of job postings where it is now implied that a work-from-home arrangement is available, even if it is not specifically referenced in the job ad, so there may a degree of understatement in the figures,” Herbert said.
He said a recent CompTIA survey of human resource professionals showed an expectation for a degree of permanent or semipermanent work-from-home opportunities for the foreseeable future.
That could create situations where small businesses far removed from tech hotspots are competing with established industry giants for talent.
The Bottom Line: The battle for tech talent is heating up, and it’s not going to be limited to Silicon Valley or established hotspots. With work-from-home jobs on the rise, companies won't just have to worry solely about competitors in their backyards.
