3 Ways to Fill Your Talent Pipeline as Tech Workers Ditch the Coasts As more companies commit to remote or hybrid workforces, employees in expensive coastal cities are moving to the Midwest and similar places where their salaries go further.
Opinions expressed by Entrepreneur contributors are their own.
Before the pandemic, the high cost of living on the coasts made tech workers question whether they wanted to stay. However, many of those states were also offering residents some of the highest-paying jobs. Everything seemed to balance out — at least until the pandemic started. Businesses such as Dropbox, Facebook and Twitter announced that they were going fully remote, and two-thirds of Bay Area workers decided they would relocate from Silicon Valley if they could continue to work from home.
It's easy to see why tech talent is exploring other parts of the country. While the Bay Area reigns supreme as the tech capital, California's tax rates are also some of the highest in the country, and the average home price is about $684,000. Comparatively, the national median is about $293,000. It's equally expensive for companies, which is why 2020 saw businesses such as Oracle and Palantir leaving Silicon Valley.
As more companies commit to remote or hybrid workforces, employees in expensive coastal cities are moving to the Midwest and similar places where their salaries go further. According to research from Purpose Jobs, the Midwest is home to 7 out of the top 10 most affordable states in the U.S. These locations allow tech-sector workers to experience a better quality of life while earning the same.
Now that you know where workers in the tech sector are headed, you can start filling your pipeline with fresh talent. Here's how:
1. Talent might not come to you, so you need to go to them
Historically, tech workers lived where the jobs were. The pandemic upended many employment models and accelerated remote working trends. As tech workers relocate from densely populated urban areas with a high cost of living to achieve a better quality of life, you should consider following them.
To study migration patterns, check out the businesses helping them move. For example, U-Haul examines where one-way truck rentals begin and end. It can see where people are going and which places they're leaving behind. In 2020, California was the most departed state by a wide margin. Comparatively, Midwestern states such as Ohio and Missouri ranked in the top 10 for growth.
There's a tremendous amount of resistance to returning to offices. According to a study by Robert Half, 1 in 3 workers would quit if forced to return to the office every day. Employees want remote and hybrid jobs. If your company can't support fully remote positions, consider exploring satellite or relocation opportunities as hybrid-inclined tech workers move or return to the Midwest.
2. Do your research before selecting a regional office location
Having an official office "space" might seem unnecessary, but you'll still need to comply with federal and state legal laws when hiring remote employees. The requirements for businesses vary on a state-by-state basis. If you're establishing your company as a business in another state or country, it could also be beneficial to open a regional office so you can meet regulations and have a base for client meetings, corporate tasks, hybrid workers and more.
People often stick with what they know. When deciding where to look for talent, it's easy for companies -- especially international ones -- to first think about major cities. But just because you've heard of a city doesn't mean it's the best place to set up a regional office or new headquarters.
Instead, do your homework and look at everything a location has to offer. Contact state entities, economic development groups and other organizations that can provide information on what certain areas can offer your company in terms of a workforce. Our team meets with business leaders from across the globe. Typically, they've never considered expanding into Missouri until we meet with them. They're unaware of our state's business strengths and our existing tech companies such as World Wide Technology, Mastercard's global operations center and Cerner, so we focus on building awareness first.
3. Check out state programs for talent and business opportunities
Don't just think about today's available talent; consider who might be there tomorrow. The hiring competition is fierce at top universities, so look for undervalued areas with strong training programs and talented graduates. For example, the Midwest as a whole produces 25% of the country's computer science graduates.
Today, finding talent is one of a company's hardest challenges. When companies come to us, they're often looking for training programs and talent attraction tools. We propose that they look at Missouri's Fast Track Workforce Incentive Grant, which enables adult learners in certain income brackets to pursue degrees or certificates in high-demand fields for little to no cost. This can be a powerful tool for companies to offer to prospective talent. And programs such as LaunchCode, created by Square's Jim McKelvey, can provide a talent pipeline of coders and tech workers beyond traditional avenues.
You can also shop around for opportunities to help fuel your company's success, such as the free startup counseling offered in Novi, Michigan, or Indiana's $1 billion commitment to innovation and entrepreneurship through 2026. There are also economic advantages: the Midwest actually makes up the fourth-largest economy in the world, and more than 26% of 2020 Fortune 500 companies call the heart of America home. It's no mystery why companies are following tech talent away from the coasts.
By examining where top talent is moving and seeking out the programs that are training the next generation of skilled workers, you can ensure your company maintains its best asset: the people.