The U.S. financial services industry, faced with heightened regulations and competition for skilled labor from technology companies, increasingly is finding the workers it needs by expanding to cities like Phoenix, according to a new report from CBRE Group, Inc.
In its inaugural annual report on the financial services industry, CBRE examines markets across the U.S. for their availability and cost of highly skilled workers, particularly those with technology backgrounds.
CBRE found that less expensive, “active” markets have posted significant growth in financial services employment since 2010. The “active” markets that have above-average growth in financial-services employment, according to the CBRE report, are:
- San Antonio
- Columbus, Ohio
- Dallas/Fort Worth
- Jacksonville, Fla.
- Salt Lake City
- Richmond, Va.
“New economic realities, continued regulatory pressure and the threat of technology disruption are unrelenting forces driving changes in the financial services industry,” said Julie Whelan, CBRE’s head of Occupier Research in the Americas. “Firms are shaping their real-estate strategy in response to these trends and a number of ‘new cities of finance’ are emerging across the U.S.”
“As the report states, talent is always a primary consideration of companies examining location strategy – particularly for industries that require very specific skill-sets like financial services,” said Kevin Calihan, senior vice president in the firm’s Phoenix office. “Phoenix is a stable and low-cost location for companies with high-skill requirements. The metro area offers low costs of living, affordable wages and a diverse and – this is key – scalable workforce. With one of the deepest financial services labor pools in the county, this is a market that can offer firms cost effective and sustainable growth. Phoenix is the second most active market for financial activities employment growth, with a 15.2 percent increase since 2010; and, Phoenix is seventh in overall FA employment with 103,700 financial activities jobs.”
The report further identifies five “next-generation” markets that, according to proprietary analysis by CBRE’s Labor Analytics group, offer affordable real estate and expanding pools of skilled labor even though the financial-services industry has, as yet, as smaller footprint in each. Included among those are Boise, Idaho, and Provo, Utah.
Based on CBRE’s examination of skilled-labor availability, labor costs, real-estate costs, market education levels and other factors, many of these active and next-generation markets scored highly as ideal recruiting and employment centers for the types of workers sought by the industry.
- Salt Lake City, Tampa, San Antonio, Phoenix and Columbus rank highly among cities offering the best mix of labor availability and cost for shared services jobs, which include back-office roles such as accounting, human resources, legal and finance.
- Columbus, Charlotte and Phoenix rank as ideal recruiting grounds for risk and compliance workers, such as quantitative analysts, mathematicians and compliance officers.
- Provo (Utah), Salt Lake City and Charlotte are among those atop the list of cities providing a balance of labor availability and cost for financial-services technology jobs such as software developers, web developers and information-security analysts.
“Financial services companies are continuing to seek out new and emerging locations that provide them with access to talent at affordable rates,” said Kristin Sexton, CBRE’s managing director of Labor Analytics. “Labor is the driving force behind the growth of the financial services industry in these smaller, ‘active’ markets.”