Each year, CBRE ranks markets on various factors such as tech job growth, wages, wage-to-rent ratio, number of residents with tech degrees and more. In recent years, Austin has maintained its position as a top 10 market for tech jobs in North America.
From 2017 to 2018 the city climbed from a No. 8 ranking to a No. 6 ranking, according to the report.
Despite affordability concerns in both commercial and residential real estate, Austin remains relatively attractive to companies when compared to other major tech markets such as The Bay Area in California and Boston, Massachusetts, said Erin Morales, Senior Vice President in CBRE’s Austin office.
A high level of talent combined with a lower cost of living contributes to Austin’s tech market growth, Morales said.
“When companies are looking at where they can acquire the best talent for the money, Austin comes in comparison to Boston, Atlanta and Denver as a very high-quality talent at a moderate cost,” she said.
In the last five years, Austin added 12,000 tech workers to the metro area and produced 1,000 more tech jobs than tech graduates each year, according to the report.
“Obviously we want University of Texas, Texas State University, St. Edward's University, Texas A&M University and all these great schools to produce great tech talent, which they do,” Morales said. “But in addition to that, [Austin] is able to recruit talent from other markets which is why we continue to grow at such a rapid pace.”
In 2018 alone, CBRE's largest leases to tech companies amounted to over 1.4 million square feet of office space with just under 1 million square feet of that space located in North and Northwest Austin.
“There are a number of companies that have looked at their approach in Austin by bifurcating their workforce,” Morales said. “[They have] a downtown location to recruit younger generation Z employees that want to live, work and play in the Central Austin area and then they also look at the engineering and sales talent that are raising kids and want good schools in Cedar Park, Leander and Round Rock.”
One metric where Austin fails to excel is gender diversity. Females make up just 24 percent of the tech workforce. Morales said some tech companies in Austin are seeking ways to promote greater workforce diversity, including WP Engine Inc., which has a downtown location.
“WP Engine has been really working hard to hire diverse talent,” she said. “I think the effort is out there, it’s just going to take a lot of time to make a change when you're looking at the analytics unfortunately.”
The other top tech markets did not fare much better with Raleigh-Durham, North Carolina and Washington, D.C., having the highest percentage of female tech workers at 30 percent. Seattle, Washington, the No. 2-ranked tech market, had the lowest percentage of female tech workers at 22 percent.