Demand for tech workers in artificial intelligence (AI) increased, despite slower tech talent job growth overall last year, according to CBRE’s annual Scoring Tech Talent report. For the first time in the report’s 11-year history, non-tech industries hired more tech talent workers than the tech industry. And, as tech companies shifted focus to AI, they listed fewer but more specialized opening for AI jobs. That in turn led to increased hiring of software developers and programmers.
U.S. tech talent employment grew by 3.6% in 2023, down from 7.3% in 2022. The overall slowdown was accompanied by a shift in hiring momentum to non-tech employers. Professional & Business Services added the most tech talent jobs last year (49,760), followed by the Transportation, Warehousing & Wholesale sector (45,390). Both significantly outpaced the high-tech industry’s growth (28,978), according to the CBRE report released today.
In a new analysis this year, CBRE found that AI’s share of total U.S. tech talent job postings increased to 14.3% in June 2024, up from 8.8% in late 2019, based on Lightcast data. Software developers and programmers comprise most of these AI roles, accounting for 72% of all new tech talent jobs in 2023. The tech industry hired the most software engineers in 2023 (56,548), while Professional & Business Services hired the most computer support and manager roles (20,760).
The San Francisco Bay Area, Seattle and New York Metro claim the largest clusters for AI talent, accounting for 44% of the total 285,235 AI tech jobs in the U.S. In Canada, Toronto, Vancouver and Montreal are the leading AI markets, accounting for 60% of the country’s total 41,374 AI tech jobs.
Strong demand for AI software and hardware developers has resulted in higher wages in top tech talent markets. Tech industry wages are 17% higher than the U.S. average and software developers at tech companies saw wages increase 12% year-over-year, despite layoffs in the sector. The San Francisco Bay Area, Seattle, and New York Metro had the highest average annual tech wages in 2023, followed by Washington, DC, Boston, and San Diego.
“Increased demand for specialized skill sets in artificial intelligence has fueled tech talent job growth across all sectors. We anticipate more tech hiring to take place this year and into 2025 as companies further develop and adopt this technology,” said Colin Yasukochi, Executive Director of CBRE’s Tech Insights Center.
CBRE’s annual Scoring Tech Talent report covers 75 North American markets, ranks the top 50 tech markets in the U.S. and Canada and outlines tech talent labor market trends amid economic shifts and remote hiring. Overall, the U.S. and Canada added 231,500 net tech talent jobs in 2023 across established hubs such as the San Francisco Bay Area, New York, Seattle and Vancouver as well as smaller markets like Huntsville, Colorado Springs and Canada’s Waterloo Region. The top five ranked tech talent markets are the San Francisco Bay Area, Seattle, New York Metro, Toronto, and Austin. Toronto moved up one spot to fourth, Austin rose one spot to fifth, while Washington, DC fell two spots to sixth place. Raleigh-Durham, San Diego, and Detroit improved rank the most.
Among Canadian markets, Toronto maintained the lead in total tech talent and added the most jobs between 2018-2023 (95,900). The fastest growing Canadian markets were Calgary (78.1% growth of tech talent occupations from 2018-2023) and Ottawa (51.7%). CBRE also analyzed emerging markets in Latin America where tech talent grew 54% between 2018-2023, triple the U.S. average. The three largest Latin American tech talent markets were Mexico City, São Paulo, and Santiago. The fastest growing was Monterrey, Mexico.
Real Estate Considerations. Total operating costs for tech companies increased in 2023 due to higher average wages, even as many organizations reduced their real estate footprint. The total annual labor and real estate cost for a 500-person tech company occupying 60,000 square feet of office space ranged from $35 million in Quebec City to $81 million in the San Francisco Bay Area.
Diversity & Demographics. CBRE also found diversity is improving slowly. The share of tech degree graduates from underrepresented groups (25.7%) exceeded existing workers (23.1%), as did female tech degree graduates (26.3%) compared with existing workers (24.4%). This is a positive indicator of future tech talent diversity. Eighteen of the top 50 tech markets saw the total number of residents in their 30s increase by more than 10% since 2017. Meanwhile, Toronto, Austin, Salt Lake City and the Waterloo Region had the highest total concentration of residents in their 20s.
To view or download the CBRE 2024, Scoring Tech Talent Report, click here .
