Phoenix climbs to No. 15 on CBRE’s ‘Tech Talent’ report
Phoenix moved up two spots to No. 15 on CBRE’s Tech Talent Scorecard, part of its sixth-annual Scoring Tech Talent Report, which ranks 50 U.S. and Canadian markets according to their ability to attract and grow tech talent.
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 has a tech talent labor pool of 83,930, or 4 percent of its total employment, compared to the national average of 3.5 percent.
The top five markets for tech talent in 2018 were the San Francisco Bay Area, Seattle, Washington, D.C., Toronto (the first time a Canadian market made the top five) and New York, all large markets with a tech labor pool of more than 50,000.
The 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.
Phoenix stood out in the report in a number of other key areas:
• Phoenix stands out as a tech-job creator, adding 12,650 tech jobs in the last five years (2012-2017)—more jobs than well-known tech hubs like San Diego, Austin, Washington D.C. and Boston.
• Phoenix added 24,718 tech degrees between 2012 and 2016 – the 9th highest total of the 50 markets and above Seattle and Austin.
• Phoenix has an abundance of tech talent and produces more tech graduates than jobs, making it a great market for expanding tech companies.
• The population of millennials in their 20s grew by 14,777, or 6.4 percent, between 2011 and 2016, surpassing the U.S. average of 3.7%. More millennials are moving to Phoenix than they are Los Angeles, New York and San Diego.
• Phoenix’s office rents increased 26 percent to $25.65 and its vacancy rate decreased more than seven percentage points to 16.5 percent from Q1 2013 to Q1 2018.
“Arizona’s university system, which includes Arizona State University, the University of Arizona and Grand Canyon University, is producing more tech degree graduates than there are tech jobs available in the market. Expanding tech companies in Metro Phoenix are capitalizing on this surplus of talent and able to fill positions more easily than other tech hubs,” said Kevin Calihan, executive vice president with CBRE Phoenix. “This, coupled with Phoenix’s robust net migration and growing millennial population are giving Phoenix an edge when compared to many competing tech markets. As Phoenix strengthens its position as a vibrant and growing tech market nationally, we’ll continue to see an influx of new tech companies and growth among our homegrown tech firms as well.”
CBRE’s interactive Tech Talent Analyzer found the San Francisco Bay Area, Austin and Seattle to be the most competitive markets to hire tech talent based on labor market supply/demand, wage costs and talent quality.
“Strong economic conditions and tightening labor markets are constraining tech talent job growth and increasing costs,” said Colin Yasukochi, director of research and analysis for CBRE in the San Francisco Bay Area. “This has accelerated the expansion of tech talent pools across the U.S. to meet this demand, starting with increased numbers of tech degree graduates. Accordingly, demand for commercial real estate in large and previously under-utilized regions is on the rise from both start-ups and established companies.”
View the full report here. To view individual market statistics and rankings, including rankings on the Scorecard, access CBRE’s Tech Talent Analyzer.