Silicon Valley workers appear to be looking for jobs elsewhere.
The data team from job searching site Indeed.com recently looked at how many job seekers are viewing positions outside of their own cities and metro areas. They compared data from six primary U.S. technology hubs — Austin, Boston, Los Angeles, New York, Seattle and Silicon Valley (which includes San Francisco and San Jose) — and found that users in Silicon Valley had the highest outbound interest in moving jobs.
From October 2016 to January 2017, more than 38% of technology job seekers in the San Francisco and San Jose area have clicked on postings outside of the area, up from just 27% four years ago. That trend stands out especially among mid-career employees between 45 and 54 years of age: Half of the Silicon Valley technology job seekers in this age group have been looking for opportunities beyond the border.
And it’s not the only study to suggest tech workers are looking beyond San Francisco. The Federal Reserve’s most recent regional economic round-up on the San Francisco district said that talent shortages in the technology industry have both increased the time required to fill positions and the cost per hire.
“The rise of the technology sector, in place for years now, has been the modern iteration of the California gold rush,” said Mark Hamrick, Washington, D.C. bureau chief for the personal-finance site Bankrate.com. “But the combination of high costs and the region’s relatively tight job is a double-edged challenge for technology sector employers,” he said.
The rising cost of living in Silicon Valley might have contributed to the trend of relocating. The median monthly rent for a one-bedroom apartment in San Francisco is approximately $3,000 and $2,500 in San Jose, more than double the nationwide average around $1,200, according to Indeed.com.
“By looking for job candidates outside the local market, employers widen the pool of potential hires, some of whom might command relatively lower wages,” Hamrick said. “It has been the case for generations that employment is one of the key forces prompting individuals to move.”
Although Silicon Valley is not short of high-paying technology jobs, when adjusted for cost of living, the relative value of the earned salary is far from impressive. Among the seven metros studied, San Francisco’s average technology salary ranks third at $93,171 after this adjustment, while San Jose ranks fourth at $92,577. Both are left behind by Seattle and Austin at over $97,000 a year.
“Austin and Seattle are good examples of rising tech hubs, where the cost of living is still relatively low and there’s a growing supply of tech jobs,” Raj Mukherjee, senior vice-president of product for Indeed.com, told MarketWatch. In the last year, Facebook FB, -0.33% Apple AAPL, +0.37% and ORCL, -0.41% have built new facilities or expanded their presence in Austin, he said.
New York and Seattle have a relatively low outbound job search rate — around 32% and 28% — compared to San Francisco. Among these six metro areas, Austin is the only one that has seen a decreasing percentage of outbound job search since 2012. Austin also has the highest inbound job search rate, meaning job seekers from outside of the area are looking for opportunities there.
Technology employees in San Francisco also tend to change jobs more frequently. The average job length for software engineers in San Francisco is less than 28 months, while their peers in New York stays for an average of 42 months on one job, that’s about 50% longer.
The more fluid job market in San Francisco might be a result of the abundant job opportunities in the valley, which is headquarters to nearly 40 of the world’s Fortune 1000 technology companies and thousands of start-ups. “Short job tenures may reflect an especially ambitious workforce, aware of a massive supply of opportunity and moving from job to job with a strategy of rapidly getting ahead in their career,” Indeed.com found.
Note: The technology jobs analyzed in this report include software engineer, data analyst, quality analyst, web developer, Java developer, software developer, data scientist, UI/UX developer, front end developer, net developer, application developer, mobile developer, senior software engineer, software architect, mobile engineer, DevOps engineer, database engineer, and senior software developer.