Phoenix moves up to No. 17 on CBRE’s ‘Scoring Tech Talent’ report
Phoenix moved up one spot to No. 17 overall on CBRE’s 2021 Scoring Tech Talent report as North American tech-talent employment weathered the pandemic better than most other professions.
Numerous indicators underscore the resilience of tech talent during COVID-19. These occupations registered job growth of 0.8 percent in 2020 in the U.S. while non-tech occupations declined by 5.5 percent. Software developers and programmers were the most in demand tech-job category last year, adding 85,000 U.S. jobs for a 4.8 percent growth rate from a year earlier. Beyond the tech industry itself, those that added tech workers last year include financial activities, professional & business services, and government.
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Phoenix has the 14th largest tech talent labor pool nationally with 98,220 tech workers, a 14.2% increase from 2015. Following the pandemic, factors including the size of a market’s talent labor pool is a key indicator of a region’s economic recovery.
Overall, the top five markets for tech talent in 2020 were the San Francisco Bay Area, Seattle, Washington, D.C., Toronto and New York City, all large markets with a tech labor pool of more than 50,000. Phoenix climbed one spot from 18 in last year’s report.
“The last year has really solidified the Greater Phoenix area as a growing tech talent hub,” said Jami Savage-Gray with CBRE‘s Tech & Media Practice in Phoenix. “This region isn’t an afterthought anymore. Phoenix’s tech talent pool is expanding steadily as companies are drawn to Arizona’s business-friendly climate, its growing millennial base, fantastic infrastructure and relative lower cost of doing business while giving employees a lower cost of living, especially compared with our coastal neighbors.”
CBRE’s annual report, now in its ninth year, ranks the top 50 North American markets by analyzing 13 measures of their ability to attract and develop tech talent, including tech graduation rates, tech-job concentration, tech labor pool size, and labor and real estate costs, among others. CBRE also ranks the Next 25 emerging tech markets on a narrower set of criteria. Tech talent is defined as 20 key tech professions — such as software developers and systems and data managers – across all industries.
“Many factors already are in place to fuel strong tech-talent job growth this year and beyond, including demand for tech to facilitate continued remote work, robust e-commerce growth and streaming services,” said Todd Husak, Managing Director of CBRE’s Tech & Media Practice Group. “Big tech markets will gain from their established pipelines of tech graduates and many workers’ return to city centers. Smaller markets will reap benefits from their cost advantages in labor and real estate as well as the tech industry’s embrace of remote work for certain employees.”
Phoenix stood out in the Scoring Tech Talent report in a number of other key areas:
• The millennial population aged 23 to 38 increased by 11.9% (119,442 people) since 2014.
• Phoenix offers affordable living for tech-talent workers, with the average annual apartment rent amounting to 16% of the average tech-talent wage. That ranks 27th among the 50 largest tech-talent markets compared with New York’s 26.3% (#1), Los Angeles’ 24.2% (#2) and San Diego’s 22.6% (#3).
• The metro area is experiencing a brain drain in that there were 25,519 tech degree completions between 2016 and 2020 and only 12,180 tech jobs added in that timeframe.
• Phoenix is attractive to employers due to its relative value proposition, especially when compared with neighboring California. The average one-year cost for operating a 500-employee tech company occupying 75,000 sq. ft. in Phoenix amounts to $43.2 million. That ranks 24th most expensive among the top 50 tech talent markets. San Francisco ranks #1, Los Angeles #6 and San Diego #8.