The latest annual "State of the Industry" report from the Pittsburgh Technology Council has found that a shrinking labor force in the region's tech scene is occurring at the same time that wages are rising overall for those employed in its various industry sectors.
For the report, PTC looked at data supplied from the Pennsylvania Department of Labor & Industry during the years of 2019, 2020 and 2021 — the latest full year that data was available. PTC solicited this data from 13 counties in southwestern Pennsylvania and found that the region had 11,258 technology establishments in 2021, equating to more than 15% of the total companies in this area and an increase compared to the prior year. Additionally, these firms count over 295,000 workers on their payrolls — that's more than 24% of the surveyed area's total workforce — and paid out $27.2 billion in annual wages, more than 36% of the region's total wages in 2021.
It's those wage figures that caught the attention of Jonathan Kersting, vice president of communications and media at PTC, the most.
"The reason why we do this report is because…when you see the numbers, we can start to actually look at what's happening and make some decisions," Kersting said. "When I see those numbers of like 36% of the region's total wages, we want more people making those wages."
Finding the people seems to be the challenge, however.
PTC divided the report's total figures into various industry subclusters that tie into the broader tech scene — information technology, life sciences, environmental technology, energy technology, advanced manufacturing and advanced materials. The overperformance of certain employment and wage figures in some of these subclusters compared to the decline seen in others is what led PTC to the conclusion that the region is continuing to see growth overall in its tech sector.
Take the IT subcluster for example. In 2021, IT employed over 29,000 workers in the region with an average annual wage of $128,642. That's a 3.8% decline in workers compared to just under 31,000 who were employed in the sector in 2019 but it's a 23.8% increase in wages compared to the average annual salary in this subcluster being $103,846 in 2019. It marked the highest percentage increase by subcluster in the whole report.
In fact, the only subcluster that didn't see a decline in employment figures was the life sciences cluster, which grew by 2.8% from 2019 to 2021 and employed 19,785 workers at last count.
Despite this, all clusters posted gains in average wages, the smallest of which went to those in the energy technology cluster. That cluster had a 4.8% increase in average wages from 2019 to 2021 and posted $103,558 in average annual salaries last year.
The advanced manufacturing cluster had the largest percentage of workforce decline, shrinking 5.8% from 66,677 workers in 2019 to 62,821 workers in 2021.
"I think the big concern is if [tech firms] don't get the talent; I think they've done really well with being able to do a lot with less, but I look at how will the lack of talent actually impact the ability for [Pittsburgh] to continue growing," Kersting said. "You hear of companies that just can't take a contract because they don't have enough talent to execute on it. And so how are you going to grow? I think it all comes down to talent."
A copy of the full report can be found here.
