Battle for the tech workers: Job seekers hold the upper hand after California migration

Austin's tech labor market, which was already tight heading into the pandemic, has grown even more so as California companies flock to the capital city. It's made for a situation where employers are listening more to worker demands to fill job openings.

For tech workers—like their counterparts in the restaurant, construction and myriad other industries facing labor shortages—that means setting their own terms, such as remote work options and higher wages.

"We are living in times when the employees are the king or the queen," said Angelos Angelou, founder and CEO of local consulting firm AngelouEconomics.

A talent center

Lured by the state's business-friendly climate and Austin's growing tech scene, California-based companies such as Tesla, Oracle and TikTok built factories, relocated headquarters and opened offices. Austin posted the highest tech migration rate of any city in the country between May 2020 and April 2021, according to a recent LinkedIn analysis.

With so many new resident businesses, job growth kept pace. The Austin metro ranked fourth nationally for tech job postings growth in March, according to Silicon Valley Bank's latest State of the Markets report.

Oracle relocated its headquarters to the Riverside location in Austin. (Shutterstock)

To fill these roles, local tech companies have to look beyond the city limits. Employers poach from their competitors, recruit recent graduates from area colleges and universities or look to the national labor market for talent, Angelou said.

Summer Salazar, director of employer engagement for Texas Career Engagement at the University of Texas at Austin, has seen a huge influx in tech sector job postings on the university's job board in recent months. "We feel that demand," she said.

An employee's market

Jaime Cabrera, 28, recently graduated from the LBJ School of Public Affairs at the University of Texas at Austin and is looking for a policy job at a social media company. He didn't go into his job search with plans to stay in Austin but has seen various intriguing openings, citing Bumble, Lyft and TikTok. "I didn't realize how many companies are here," he said.

The tech labor market also affects employees who are not looking for a new job but instead seeking better benefits or internal policy changes from their current employer.

Lawrence Humphrey, 27, lives in North Austin and works for IBM. Shortly after the murder of George Floyd, he co-founded Tech Can Do Better, which advocates for a more equitable industry. Since then, there has been little quantitative progress in terms of more diverse hiring and other metrics. But there has been a qualitative shift. "Issues around racial equity are just far more of a priority from the perspective of the employees, so therefore it's far more of a priority for the employers," he said.

OG vs. newcomers

Although the pandemic has accelerated the growth of Austin's tech industry, the industry was already established. In the latter half of the 20th century, the city attracted big tech originators like IBM because of its enticingly low labor cost and spawned homegrown giants like Dell—trends that continue today.

A 1954 image of IBM's Austin office. (Austin History Center)

The arrival of Silicon Valley tech transplants in other growing tech cities, such as Miami, has led to tension with the so-called old guard. In Austin, such competition has forced companies to compete for workers, leading to more mobility.

"When I was in the job market, my god if you changed jobs often—and often meant once every three years—you were considered a traitor," said Angelou, who headed the Austin Chamber's economic development department from 1984 through 1995, helping to recruit companies such as IBM, Apple and Samsung to town. "Now people change jobs every nine months, it appears, and that is considered a plus."