Why Pittsburgh ranks as a top market for job growth among smaller tech hubs

New data on Pittsburgh’s tech workforce reinforces its recent growth and promise as the pandemic wanes.

Commercial real estate and investment firm CBRE released its annual Scoring Tech Talent report last week, detailing the industry’s job growth and economic impact across the top 50 markets in the United States and Canada. The report also publishes data on workforce diversity, cost of living and other relevant market conditions, giving each city an overall ranking according to its competitive advantages.

Pittsburgh fared well among the top 50 tech markets, and even better among the smaller ones. In total, the city ranked 29th, moving up one spot from last year (just a few spots behind fellow Pennsylvania city Philadelphia). For small tech talent markets, with a labor pool of less than 50,000 workers, Pittsburgh ranked fourth in terms of growth, only falling behind Columbus, Calgary and Orlando. The report also rated Pittsburgh as one of the most affordable markets in the country for high and very highly skilled tech talent, coming in as the 37th most expensive out of 50 markets based on evaluations of average tech company operating costs.

“We’re very pleased to see that we’re in the top five in small markets, and at the same time, we’re one of the lowest in cost for companies to be here,” CBRE Vice Chairman in Pittsburgh Jeremy Kronman told Technical.ly. “It’s a great combination, because the major markets are very aggressively picked over, so I think this bodes well for continued tech growth here.”

We're very pleased to see that we're in the top five in small markets, and at the same time, we're one of the lowest in cost for companies to be here.

As of 2020, Pittsburgh’s total number of tech occupations was 43,080 — a 10.7% increase in the period from 2015 to 2020. While the workforce saw growth across jobs in software development, computer support and technology engineering-related positions, it was computer and information systems managers that saw the biggest increase in employment, up 43.6% from 2015.

The average wage for all tech jobs is up, too, at $88,685, which is a 15.1% increase since 2015. The city’s living costs also remain affordable compared to the other 50 markets included in the report, with average annual apartment rent requiring about 16% of the annual tech talent salary. Kronman underscored the new advantages these attributes have, especially in a newly remote work-driven world.

“If you can live anywhere, do you want to live where it’s $5,000 a month for a 45-minute commute for a one-bedroom apartment? Or do you want to live where it’s a 20-minute commute for $2,000 a month to buy a house in an award-winning school district?” he asked. “And those kinds of choices are available. Pittsburgh is clearly set out to be a winner in that kind of competition.”

This year’s report also notably ranked Pittsburgh as having the most diverse tech market for underrepresented groups, which CBRE labeled as being Hispanic, Black and Other Non-White/Non-Asian people. Per CBRE’s calculation, the relative diversity rate for each city, based on data for 2019, is the difference between the percentage of tech talent in these groups and the office-using share of those same underrepresented groups.

The office-using share, which for Pittsburgh was 8.7%, is a benchmark used to reflect the diversity of a city’s white collar workforce. That number provides a common baseline that CBRE researchers used to compare the share of underrepresented groups in tech talent across different cities.

If, like in Pittsburgh, the difference between the office-using share and the tech talent share of underrepresented groups was positive, that indicates the city’s tech workforce is more diverse than its general white collar workforce. But if that difference is negative, that means the tech workforce is less diverse than general white collar workforce.

So while Pittsburgh might have a less diverse white collar workforce than a place like San Antonio, which had a 54.5% office-using share of underrepresented groups, the tech workforce here is able to employ a greater share of local underrepresented groups available for those jobs.

In that context, Pittsburgh’s diversity rate came out far above any other markets at 3.5% — the difference between its 8.7% office-using share and its 12.2% tech talent share of underrepresented groups. CBRE listed Charlotte as having the second most diverse tech scene of the top 50 markets, at 0.8% — the difference between an office-using share of 24.7% and a tech talent share of 25.5%.

Kronman wasn’t surprised to see Pittsburgh at the top when considering the office-using benchmark, naming the prowess of institutions like Carnegie Mellon University and the University of Pittsburgh as well as the prestigious medical research going on at health systems like UPMC as major factors in bringing a wide range of talent to the city.

“Large diverse markets don’t necessarily have the talent generators that we have here,” he said. “There is only one CMU, there’s only one Pitt and UPMC, there’s only one National Robotics [Engineering Center].”

Large diverse markets don't necessarily have the talent generators that we have here. There is only one CMU, there's only one Pitt and UPMC.

Paired with those places’ status as international tech leaders, Kronman thinks Pittsburgh’s ranking might also be attributed to a heavier focus on equity initiatives from these companies and universities as well. Still, he pointed out that while Pittsburgh might be at the top of the pack in diversity in this year’s report, 3.5% isn’t a number to celebrate yet.

“This isn’t an end result. It’s a step of progress,” he said, though he finds pride in the city being at the forefront of that progress.

There are other areas the report shows Pittsburgh will need to improve on as it continues to grow. While the city had the highest percentage of tech degrees awarded to women — 30.9% of the total 5,414 degrees in 2019 — other numbers showed signs of persistent brain drain.

Alongside of 23,972 tech degrees earned in Pittsburgh from 2015 to 2019, only 4,150 tech jobs were added in the period from 2016 to 2020, which the report calculated as a loss of 19,822 graduates. But Kronman argues this isn’t because of a fundamental talent retention problem, but rather a supply and demand one.

“Brain drain is a misnomer,” he said. “We produce many high-tech students out of Pitt and CMU, but a smaller market can only absorb so many.” Should Pittsburgh’s market size continue to grow, which this year’s report shows it’s on track to do, then there will be increasingly more jobs available to those graduates.

He has faith those graduates will want to stay, and that those who have left will come back, especially as work patterns change and the pandemic wanes. This report, he said, shows that the city is now established as not only a top-rated smaller market, but one of the most affordable and most diverse as well. “I think that’s a wonderful encapsulation of where Pittsburgh is at this moment in time, and bodes extremely well for where we’re headed.”

Sophie Burkholder is a 2021-2022 corps member for Report for America, an initiative of The Groundtruth Project that pairs young journalists with local newsrooms. This position is supported by the Heinz Endowments.