2020 brought unique challenges to all areas and industries of the U.S., and Silicon Valley was no exception. This region holds a mythical status in the tech sector, but will this always be the case?
To examine 2020’s impact on Silicon Valley, Indeed looked at employer job postings for tech positions in the San Francisco and San Jose metropolitan areas from October 2019 through October 2020. Data on job seeker interest in these roles, as measured by clicks on postings, provided additional insight into local talent trends.
Taken together, this data offers a look at how this unprecedented year impacted the epicenter of U.S. tech, highlighting trends that were already emerging and, in some cases, accelerated by the events of the year. While Silicon Valley’s tech scene remains unquestionably strong, change is in the air.
Silicon Valley’s share of U.S. tech jobs keeps dropping
From 2019 to 2020, Silicon Valley’s share of all U.S. tech job postings dropped for the second year in a row, decreasing 1.68% on top of nearly 5% (4.96%) the previous year.
While interest in local tech jobs rose 19.63% this year, based on the number of people clicking on Indeed.com job postings, the bump was likely due to pandemic-related layoffs. In the two years prior, however, job seeker interest in Silicon Valley decreased continuously, suggesting that the long-term picture is more complex and 2020’s interest might soon dwindle.
Despite its reputation as the undisputed center of U.S. tech, opportunities in this sector are growing in many other regions.
Silicon Valley continues to lose ground to rising hubs like Austin, Texas; Raleigh, North Carolina; and Seattle as companies open new campuses, remote work grows and tech roles become more diversified.
This trend has been bubbling for a while, thanks in part to the appeal of affordable living in these other tech centers, but 2020’s experiment in widespread remote work likely quickened the pace.
Remote work no longer a perk, but a necessity
As workers across the country moved to full-time virtual work during the spring 2020 lockdowns, working from home shifted from being a perk enjoyed by some to a necessity for many — and companies saw once and for all that employees could work remotely without losing productivity.
Dropbox, Square and Twitter have announced that employees will be able to continue working from home permanently, raising questions about whether other companies will follow suit. A previous Indeed survey of tech workers across the U.S. found that nearly half (48%) will be able to work remote permanently, even those who were based in offices prior to the COVID-19 crisis — and almost every one of these workers (95%) plans to take the option.
These remote work possibilities might also contribute to the increased job seeker interest in tech roles, since the ability to work from home is a top priority for many during the pandemic.
Amidst this shifting geography of tech jobs and the move to virtual work, some high-profile companies are leaving Silicon Valley. Hewlett-Packard, famously founded in 1938 in a Palo Alto garage now known as “the birthplace of Silicon Valley,” announced in December 2020 that it will relocate its headquarters from the San Francisco Bay Area to Houston.
Moving outside of Silicon Valley appeals to companies and workers alike. Housing in the region is notoriously pricey; for example, as of October 2020, the average home value in San Francisco specifically was a whopping $1.4 million.
Now that more tech workers have the ability to work from home, it’s no wonder people are seizing the opportunity to move to areas with a lower cost of living — or even just enjoy a change of scenery.
The top states receiving Bay Area transplants are Texas, Washington, New York and Colorado, while other states are offering financial incentives to woo people looking to take their remote tech jobs on the road, since their higher-wage earnings help boost local economies.
Engineers, developers and machine learning roles are in demand
As in the previous year, the top 10 most common job postings in Silicon Valley in 2020 are largely for engineers and developers, with software engineers at No. 1.
Product manager roles remain the only non-technical position in the top 10, with senior product manager postings up 20% from 2019. The biggest shifts in demand for technical roles among the top 10 are for developers: the number of postings seeking full-stack developers increased 14% from last year, while postings for front-end developer roles dropped 13%.
Ten Most In-Demand Tech Jobs in Silicon Valley
|1. Software engineer|
|2. Senior software engineer|
|3. Full stack developer|
|4. Product manager|
|5. Software architect|
|6. Senior product manager|
|7. Data scientist|
|8. Front end developer|
|9. Principal software engineer|
|10. Data engineer|
New trends emerge farther down the list. Although machine learning engineer roles didn’t crack the top 10 this year, this could change soon: these postings are up nearly 50% (48.42%) since 2019, a far bigger jump than for other roles.
The number of job postings for senior data scientists saw a big leap, as well, rising 30% since last year. In contrast, demand for development operations engineer roles dropped 13%, and the number of postings for user experience designers is down 19%.
While postings for developers and engineers have continued to rise, those for machine learning, AI and data roles are increasing at a faster rate — indicating that the tide might be moving toward these areas.
Top 5 Skills for Silicon Valley Tech Jobs
|Skill||% of Tech Job Ads|
Communication skills most-wanted, tech skills highest-compensated
Surprisingly, the most in-demand skill listed in the descriptions of job postings has nothing to do with technology: communication, which appears in 41% of all U.S. tech job postings. Skills for programming in various languages, including Python and Java, account for the other half of the top 10 most in-demand skills.
Salaries for Most In-Demand Silicon Valley Tech Jobs
|Job Title||Median Yearly Salary|
|1. Software engineer||$147,500|
|2. Senior software engineer||$160,000|
|3. Full stack developer||$140,000|
|4. Product manager||$132,548|
|5. Software architect||$170,000|
In exchange for these abilities, tech workers receive ample compensation — in fact, on average, Silicon Valley’s tech employees earn more than their peers in every other U.S. metro. However, the high numbers can be deceiving: While the salaries themselves are high, the cost of living in Silicon Valley means the money doesn’t go as far as it does in other metros such as Washington, D.C. or Boston.
Silicon Valley’s median salary for software engineers, this year's most common tech job posting, from October 2019 to October 2020 is $147,500, while a senior software engineer commands $160,000. A full stack developer earns a median of $140,000 annually, while product managers, the most commonly posted non-technical role for the year, earn approximately $133,000.
There are questions, however, about the future of tech salaries as more workers take advantage of the ability to work from anywhere. Will employees who choose to relocate to areas with a lower cost of living continue to earn Silicon Valley-level wages?
So far, it depends: Facebook and Twitter will reduce pay for workers leaving the region, while Reddit has announced that it will not change salaries to match location.
For a majority of tech workers, this likely won’t be a dealbreaker: six in 10 say they would take a pay cut in order to permanently work from home.
Tech sector encompasses many fields, diverse industries
While the “tech” category is often associated with startups, apps and software, the sector is actually much broader, also encompassing companies in the fields of banking, health care, higher education and retail and increasing demand for tech roles as they grow their digital platforms, adopt mobile apps and build online portals.
Leading Companies for Silicon Valley Tech Jobs
|Company||% Tech Job Postings|
|8. Wells Fargo||0.98%|
Silicon Valley’s top tech employers are no exception, and the 10 companies with the largest job share — those that posted the largest percentages of tech jobs overall — span a variety of industries. While Amazon, Intuit and Apple lead the pack, other top tech employers are in biotech (Genentech) and financial services (Wells Fargo).
A closer look at job postings in three of the region’s leading cities — San Jose, San Francisco and Oakland — illustrates the differences in types of companies under the tech umbrella.
Top 5 Companies for Tech Jobs in Silicon Valley by City
|San Jose||San Francisco||Oakland|
|1. Cisco||1. Pinterest||1. Blue Shield California|
|2. PayPal||2. Amazon||2. Kaiser Permanente|
|3. SYMVIONIC, Inc.||3. Twitter||3. Sirius XM Radio|
The city of San Francisco aligns more with popular conceptions of tech.
Pinterest has the most job postings, followed by global retail giant Amazon. Splunk, a rising star in big data, and Deloitte, a longstanding leader in professional services, are in the top 10 for job share in both San Francisco and San Jose — and they're the only two companies with such a large presence in more than one Silicon Valley city. Another standout in San Jose is SYMVIONICS, which develops hardware and software for the aerospace sector and ranks third in the city.
Compared to elsewhere in the area, Oakland’s leading employers when measured by job share have a markedly medical focus. Insurance company Blue Shield of California leads the list, knocking the 2019 leader, health care company Kaiser Permanente, into second place.
Other employers in the city’s top 10 for tech jobs include Delta Dental (insurance) and Brown & Toland Physicians (health care), though Sirius XM Radio ranks third, comprising nearly 4% (3.93%) of all postings in Oakland.
Change is in the air, but there’s room for surprises
Moving into 2021, COVID-19 will continue to shape new expectations for workers and companies alike. Both are likely to continue moving to locales outside Silicon Valley, with remote work a probable fixture moving forward.
While engineers and developers will always be needed, Indeed’s data indicates that the demand for machine learning and AI roles will likely keep increasing.
Finally, it’s important to remember that tech isn’t merely the domain of gadgets, apps or software; it is fully embedded in our daily lives, and in turn, tech employers now represent a wide variety of industries.
Silicon Valley isn’t going anywhere, but the tech landscape in the U.S. is shifting right before our eyes — and its workers are all around us.