Professional Development
Economics / Tech jobs

How does the tech job market look for 2023 college grads?

Job growth may be cooling after it peaked in May 2022, but it's still forecasted to rise, Gusto economist Luke Pardue says. These industries and cities are hiring the most.

Ready to graduate. (Photo by Pexels user Stanley Morales via a Creative Commons license; image has been cropped)

This editorial article is a part of State of Local Tech Month of Technical.ly’s editorial calendar.

First, the bad news: For new college grads in 2023, hiring is down 25% compared to May 2022.

The good news? A new report by Gusto forecasts there will still be plenty of tech jobs for this year’s college graduates, with job growth projected to be 5.4% in May 2023, compared to the annual baseline.

But especially amid a wave of tech layoffs and major workplace culture shifts, those jobs might not necessarily be in the industries they expect.

A line graph showing job growth

(Image via Gusto 2023)

An industry shift for tech jobs

Gusto economist Luke Pardue examined real-time data from the more than 300,000 small and midsize business clients on the Gusto HR management platform, and pinpointed the industries where the most job growth is happening.

“One surprising aspect of the report is the growth opportunities for new graduates in industries they may not have typically looked to for jobs right after school,” Pardue told Technical.ly. “While hiring overall is expected to fall by 25% compared to last year, industries like food and beverage and retail are expected to increase their hiring of new graduates in 2023 amid continued economic strength in those sectors.”

“Students graduating with tech-specific skills are able to look to new industries for opportunities this year.”Luke Pardue Gusto

That’s not to say that graduates with tech-related degrees will be serving coffee or running cash registers. The food and beverage and retail industries are increasingly hiring tech positions, including ecommerce managers and software engineers.

And the growth in food and beverage and retail subsectors is significant: They are expected to increase employment of new graduates in full-time positions by 9.6% and 7.7%, respectively.

“With the ongoing technological disruptions in those sectors, companies are looking for employees with the skills new graduates are leaving school with,” Pardue said. “Students graduating with tech-specific skills are able to look to new industries for opportunities this year.”

Other job growth areas include education, accounting, healthcare and accommodations.

Where is the job growth?

New college grads are still in high demand in cities across the US, most notably in Texas, where urban hubs like Houston and Austin continue to grow.

Hubs like New York City and San Jose are still growing, too, but, when you adjust salaries for cost of living, smaller hubs are looking increasingly attractive.

The five fastest growing cities for new grads after a cost of living adjustment are Houston, Philadelphia, Austin, Atlanta and Dallas.

And the top industries for new graduates across the top 10 fastest-growing cities for this group: management, scientific and technical consulting services, following by software publishers, then scientific R&D services.

Table

(Image via Gusto 2023)

Houston’s average starting salary of $60,000 isn’t the highest by far, but the Texas city’s cost of living is 8% lower than the national average, putting it on top with an adjusted starting salary of $65,000.

Philadelphia, a squarely mid-Atlantic city whose metropolitan area includes southern New Jersey and northern Delaware, stands out near the top of the list as a “northern” city among affordable cities in the south and the south-central regions.

Across the largest 50 metro areas, New York City and Philadelphia have the fifth and sixth highest rates of employment growth for new graduates.

“The mid-Atlantic region is shaping up quite strong this graduation season,” Pardue said. “Looking across the largest 50 metro areas, New York City and Philadelphia have the fifth and sixth highest rates of employment growth for new graduates, respectively. The mid-Atlantic’s density of high-quality colleges and universities creates a strong talent pool of skilled young graduates that companies in the region are able to pull from.”

The next five cities to round up the top 10 fastest-growing cities for new grads after a cost of living adjustment are San Jose, Nashville, Miami, Boston and New York City.

San Jose in California’s Silicon Valley, the city with the highest hiring rate for new grads before adjusting for cost of living, is one of the most expensive cities the US, and it is also the only city on the list where new grads can expect to earn six figures right off the bat. Boston and New York, similarly, offer higher-than-average starting salaries, but have very high costs of living.

San Jose’s $102,000 average starting salary drops to $57,000 when adjusted for cost of living. New York City’s starting average salary of $72,000 feels like just $32,000 when cost of living is taken into account, while Boston’s starting average of $75,000 feels like $50,000. By contrast, Philly’s lower average starting salary of $67,000 feels like $64,000.

Series: State of Local Tech Month 2023

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