Evolving Workforces
Scoring Tech Talent 2024
Demand Surges for AI-Specialty Tech Talent
September 4, 2024 30 Minute Read
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Scoring Tech Talent is a comprehensive analysis of labor market conditions, costs and quality in North America for highly skilled tech workers that can help decision-makers fulfill critical business and innovation objectives.
The top 50 markets in the U.S. and Canada were ranked according to their competitive advantages and appeal to both employers and tech talent employees. Eleven Latin America and 25 up-and-coming U.S. and Canada markets were also analyzed and ranked. The analysis provides further insight into the quality of tech workers, their demographics and diversity and how tech talent growth patterns are impacting cities and real estate markets.
Despite slower tech talent job growth last year, demand for highly skilled workers in cutting-edge sectors like artificial intelligence has increased.
U.S. tech talent employment grew by 3.6% overall or 213,000 jobs in 2023, while AI-related jobs grew by nearly twice that rate. Software developers and programmers, which account for most of these AI roles, accounted for 72% of all new tech talent jobs in 2023.
The slowdown in overall tech talent job growth last year (3.6% vs. 7.3% in 2022) allowed non-tech industry employers to increase their share of tech talent hiring. The professional & business services and transportation, warehousing & wholesale sectors added tech talent jobs at a faster pace than the high-tech industry (Figure 1).
In Canada, tech talent jobs increased by 1.7% or 18,400 last year, led by tech management and computer support positions across all industries.
Figure 1: U.S. Tech Talent Employment Growth by Industry (2023)
* Includes computer software & services and computer product manufacturing.
** Finance, Insurance & Real Estate.
The AI specialty share of total U.S. tech talent job postings increased to 14.3% in June 2024 from 8.4% in late 2019.
Although overall tech talent and AI-specialty job postings as of June are well below 2022 peak levels, they have rebounded from Q4 2023 averages. AI-specialty job postings in Q2 2024 were up by 27% to approximately 44,000, while overall tech talent postings rose by 5% to 342,000, based on CBRE's analysis of data from labor analytics provider Lightcast (Figure 2).
Remote working arrangements have allowed tech talent employers to diversify their workforce both geographically and demographically. While most employers have adopted hybrid arrangements of both in-office and remote work, 15% of U.S. tech talent job postings offer "fully remote" as an option.
Building security company Kastle System’s 10-city “back-to-work barometer” of U.S. office occupancy levels increased by 2 percentage points over the past year. The attendance rate currently is 50% of pre-pandemic levels and indicates that hybrid work arrangements likely will persist, especially in the most tech-concentrated cities that have the lowest attendance rates.
AI is rapidly becoming a catalyst for growth, driving new tech talent hiring and office space demand. The San Francisco Bay Area has attracted more than half of AI venture capital funding nationwide since 2019, according to CB Insights. About one-fifth of U.S. AI talent resides in the San Francisco Bay Area and one-quarter of new office leases in downtown San Francisco were signed by AI companies, based on data from LinkedIn Talent Insights and CBRE Research.
AI-related job growth likely will spread across North America as further development and deployment occur, boosting economic and real estate activity in many tech talent markets.
AI's share of total U.S. tech talent job postings increased to 12.1% in May 2024 from 8.4% in late 2019.
Figure 2: AI-Specialty & Remote Share of Total U.S. Tech Talent Job Listings
Although overall tech talent and AI job postings as of May are well below 2022 peak levels, they have rebounded from Q4 2023 averages.
AI job postings were up by 19% to approximately 41,000, while overall tech talent postings rose by 3% to 334,000, based on CBRE’s analysis of data from labor analytics provider Lightcast (Figure 2).
Persistent remote working arrangements have allowed tech talent employers to diversify their workforce both geographically and demographically.
Note: Remote share of computer and mathematical jobs that mention remote work as an option each month.
AI's share of total U.S. tech talent job postings increased to 12.1% in May 2024 from 8.4% in late 2019.
Although overall tech talent and AI job postings as of May are well below 2022 peak levels, they have rebounded from Q4 2023 averages.
AI job postings were up by 19% to approximately 41,000, while overall tech talent postings rose by 3% to 334,000, based on CBRE’s analysis of data from labor analytics provider Lightcast (Figure 2).
Persistent remote working arrangements have allowed tech talent employers to diversify their workforce both geographically and demographically.
Figure 2: U.S. Tech Talent Job Postings & Remote Share
Note: Remote share of computer and mathematical jobs that mention remote work as an option each month.
Key Takeaways
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Score
This year’s top-ranked tech talent markets are the San Francisco Bay Area, Seattle, New York Metro, Toronto and Austin. Washington, D.C. fell to sixth place, replaced by Toronto for fourth, while Austin rose to fifth. Salt Lake City, Raleigh-Durham, San Diego and Detroit improved the most in rank within the top 25. Canada’s Waterloo Region, along with Madison, WI and Orlando in the U.S., were the highest ranked small markets.
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Artificial Intelligence
In the U.S., demand for AI software engineers boosted tech talent job growth above the rate for all occupations. The San Francisco Bay Area, Seattle and New York Metro are the largest talent clusters for AI development, accounting for 44% of all AI-specialty tech jobs. Toronto, Vancouver and Montreal are the leading AI-development markets in Canada, accounting for 60% of the country’s AI-specialty tech jobs. The tech industry employs almost half of all AI-specialty talent, followed by the professional & business services and financial activities sectors. AI development likely will be a catalyst for economic growth and improved real estate fundamentals in many tech talent markets.
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Jobs vs. Education
Toronto, Calgary and the San Francisco Bay Area created substantially more jobs than tech degree graduates last year, while New York Metro, Washington, D.C. and Boston produced more graduates than jobs. Tech talent job creation was compared with the number of tech degree graduates in each market to determine top job and education markets.
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Diversity
Tech talent across all industries was predominantly White, Asian and male relative to both the overall and office-using workforce. Hispanics, Blacks and females were underrepresented in both tech talent occupations and the tech industry, as well as concentrated in the lower-wage brackets. Relative to an office-using workforce benchmark, the most diverse large market for tech talent was Montreal and the least diverse was Los Angeles-Orange County. For females in large markets, Ottawa was the most diverse and Kansas City was the least.
Tech talent workforce diversity is expected to improve since the share of recent tech degree graduates from underrepresented race/ethnic groups and females was higher than those already employed.
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Cost
The total annual labor and real estate cost for the typical 500-person tech company occupying 60,000 sq. ft. of office space ranged from $35 million in Quebec City to $81 million in the San Francisco Bay Area. Since tech industry wages are 17% higher than the U.S. average, tech companies can expect higher annual costs.
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North America Opportunity Markets
Fostering talent development in lesser-known and underdeveloped markets could offer additional talent pools to employers seeking to expand their geographical reach, uncover opportunities and increase cost efficiency. These markets are spread across Canada, Latin America and the U.S. Midwest and South.
What is tech talent?
Highly skilled tech talent workers total 7.3 million in the U.S. and Canada and comprise more than 20 occupations.1
Although these positions are spread across all industry sectors, they are mostly concentrated in the high-tech industry (Figure 3). Through this occupational lens, a software developer who works for a financial services or health-care company is considered tech talent.
The 6.2 million tech talent workers in the U.S. and 1.1 million in Canada accounted for a respective 4.1% and 6.4% of each country’s total workforce in 2023. The number of U.S. tech talent workers has increased by 811,000 or 15.2% since 2019, substantially higher than the 3.4% rise in total U.S. employment. In Canada, tech talent grew by 30.2% vs 7.5% for overall employment since 2019.
Figure 3: Tech Talent Workforce by Industry (2023)
Note: Management of Companies & Enterprises is included in the Other category for Canada.
* Includes computer software & services and computer product manufacturing.
** Finance, Insurance & Real Estate.
1 Tech talent occupation categories include software development and programming; computer support, database and systems; technology- and engineering-related; and computer and information system management.
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