Technology continues to be one of the brightest spots in the economy, transforming whole industries and responsible for large shares of the best paying jobs. But with the enormous opportunity in technology for job seekers come some hard truths. Cost of living in many technology hub cities can reach astronomical heights, pushing out even the highest earners.
We recently set out to analyze job seeker activity into and out of top technology hub cities in the US to see what we could discover about job seeker interest in migration.
We uncovered some revealing trends by looking at outbound job search from San Francisco, San Jose, Austin, Boston, Los Angeles, New York and Seattle. What we found was essentially a tale of two U.S. metros at two different stages of maturity. Both Silicon Valley and Austin have national profiles, strong technology industries and are locked in a fierce competition for talent.
However, we found that Silicon Valley job seekers, especially older ones, are increasingly interested in leaving, while Austin job seekers are increasingly looking locally for their next opportunity.
Silicon Valley job seekers are increasingly looking for work elsewhere
San Francisco and San Jose had the largest increase in outbound search over the last five years.
- 44% of all job seekers located in San Francisco or San Jose are looking outside those metro areas for jobs. This has grown 67% since 2012.
- 38% of tech job seekers located in San Francisco or San Jose are looking for tech jobs outside of those metros. This has grown 41%.
- San Francisco and San Jose have the the third lowest growth of inbound tech job search at just 2%.
Mid-career job seekers look outside Silicon Valley at the highest rates
In an effort to get further insight into the spike in outbound search we broke down job seekers by age. We found a higher percentage of outbound job search among older job seeker groups.
Among 18-24 year olds, overall Silicon Valley outbound job search stands at 49%, but climbs to 59% for 45-54 year olds before declining among job seekers 65 and over. This was the largest age group difference among all metros studied.
For Silicon Valley based 18-24 year olds, 40% of their tech job search was outbound. However, this climbed to a high of 50% for tech job seekers in the 55-64 year old range.
Looking outside of Silicon Valley seems to become more attractive as Silicon Valley job seekers get older when they are more likely to be established in their careers and personal lives.
San Francisco has the shortest tech talent tenure
By analyzing Indeed resume data, we also discovered that software engineers in San Francisco have the shortest average job tenure of any metro, and well below the national average. Here’s how the metros compare:
There may be a variety of reasons behind these trends, including the rising cost of living in Silicon Valley. The median rent for a one bedroom apartment in San Francisco is approximately $3,000 with San Jose topping $2,500 while the nationwide average is closer to $1,200.
But when looking at average salaries for typically high-paying tech roles, San Francisco and San Jose are not the top metros. When adjusted for cost of living, San Francisco’s average tech salary ranks fourth at $93,171 while San Jose ranks sixth at $92,577.
In addition, the valley is headquarters to nearly 40 of the world’s Fortune 1000 technology companies and thousands of startups which have helped make California home to an estimated 200 of the tech companies with the potential to IPO in 2017. Short job tenures may reflect an especially ambitious workforce, aware of a massive supply of opportunity and moving from job to job with a strategy of rapidly getting ahead in their career.
In contrast, to Silicon Valley, Austin job seeker trends tell a different story.
Austin job seekers are choosing to stay
Over the past five years, Austin has seen the largest decrease in outbound job search among tech hub cities.
- 34% of all job seekers located in Austin are looking outside that metro area for a job. This has declined by 33%.
- 33% of tech job seekers located in Austin are looking for tech jobs outside the metro. This has declined by 28%.
- Austin also has the highest growth in both overall inbound job search and inbound tech job search at 13% and 14% respectively.
Austin’s average salary, adjusted for the cost of living for a tech worker is the second highest in the nation. While Austin rents have been increasing, the average for a one-bedroom is still just over $1,000 a month.
The average job tenure for a software engineer in Austin is also about six months longer than their counterpart in San Francisco. Six months may not sound like long, but with a nationwide average of only three years, six months is significant.
Most organizations know that a high-performing workforce is the key to both business growth and innovation. The question remains whether economic forces pushing Silicon Valley based job seekers to look beyond its borders has a long-term impact and how other cities like Austin may be able to capitalize.
Check out the other U.S. metros we studied with increases in outbound job search below:
Los Angeles: Overall job search outside the metro area has increased 26% and tech job search has increased by 17%.
Boston: Overall job search outside the metro area has increased 37% while tech job search has increased by 21%.
New York: Overall job search outside the metro area increased by 2% while tech job search has increased by 13%.
Seattle: Overall job search outside the metro area has increased by 2% while tech job search has increased by 7% as well.
There are more opportunities in more US metros for growing a technology career than ever.