Tech labor concentration – or the percentage of total employment – is an influential factor in how “tech-centric” the market is and its growth potential. Phoenix’s tech-talent labor pool is the 16th largest nationally at 94,650 workers, which amounts to 4.5 percent of the overall metro Phoenix workforce. The national average is 3.7 percent.
The top five markets for tech talent in 2020 were the San Francisco Bay Area, Washington DC, Seattle, Toronto, and New York, all large markets with a tech labor pool of more than 100,000. Phoenix moved up two spots from #20 in 2019, surpassing San Diego and Portland.
“Metro Phoenix offers a large, skilled tech talent labor pool and produces even more with more than 5,000 tech degree graduates in 2018 alone,” said Kevin Calihan with CBRE in Phoenix. “Being a talent creator makes Phoenix attractive to tech companies as they know their employment needs will be met. Additionally, metro Phoenix provides an affordable operational environment, especially when compared to other West Coast markets.”
The report outlines how tech-talent jobs are positioned to weather COVID-19 and related shutdowns and the ensuing recession because, more than ever, companies across all industries need the technical skills that this talent base offers. Many tech products and services such as streaming, remote communications and social media now are in higher demand to support remote work and social distancing. Tech employment has shown it can withstand economic shocks: In the 2008-2010 recession, tech-talent employment declined by 0.5 percent while overall U.S. employment registered a 5.5 percent drop.
CBRE’s Tech Talent Scorecard is determined 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.
“We expect that most tech-talent markets and professions will thrive after the pandemic subsides, and many that facilitate remote work and tech services such as e-commerce, social media and streaming services may have even greater growth opportunities accelerated by the COVID-19 disruption,” said Colin Yasukochi, Executive Director of CBRE’s Tech Insights Center. “Markets that have strong innovation infrastructure – leading universities and high concentrations of tech jobs – will lead the next growth cycle.”
Phoenix stood out in the report in several other key areas:
• The millennial population aged 22 to 36 increased by 10.7 percent (97,362 people) since 2013.
• Phoenix offers affordable living for tech-talent workers, with the average annual apartment rent amounting to 15.6 percent of the average tech-talent wage. That ranks 17th most affordable among the 50 tech-talent markets.
• The metro churns out a lot of tech graduates, with 5,056 tech-degree completions in 2018. In fact, Phoenix produced roughly 10,000 more tech graduates (24,314) from 2015 to 2019 than new tech jobs (14,500).
• Overall, Phoenix ranks in the middle of the pack for expenses of operating a tech company. The average one-year cost for operating a 500-employee tech company occupying 75,000 sq. ft. in the metro amounts to $40.4 million. That ranks 26th most affordable among the top 50 tech-talent markets.