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Report: More Tech Grads Than Jobs In San Antonio

Brandon Watts (CC BY-NC-SA 2.0)
Flickr http://bit.ly/2vPX7HC

San Antonio’s technology industry received mediocre marks on a report published this week. 

Data from commercial real estate investor CBRE’s 2019 Scoring Tech Talent report reflects a city where growth in technology workers slowed the past two years, average wages in key tech jobs fell and local universities produced more technology degree earners than local employers could accommodate. 

High paying technology jobs and the firms that go along with them are seen as the key to future prosperity in many communities. 

San Antonio lost more than 1,000 tech workers last year — from 31,180 to 30,170 — according to the study and it dropped one spot in rank to No. 47. The report draws data from surveys conducted by the U.S. Bureau of Labor Statistics. 

The report is just one measure of progress in the city and some don’t agree with its outcomes.

“I don’t put a lot of stock in those [CBRE] reports,” said Michael Girdley, investor, co-owner of Dura Software and co-founder of Codeup.

There are more startups, more people looking for funding, more people getting jobs right out of Codeup, and more tech workers walking up and down Houston street all of which he said push back on the report.

Credit CBRE

Many of the challenges highlighted in the report are felt nationwide.

“Growth across the country has slowed as talent has been more competitive to attract in every market,” said Lexi Russell, associate director of research at CBRE and co-author of the study. “With a depth of about 30,000, losing 400 or 1,000 headcount, that’s almost a neutral growth.”

Headwinds from the city’s low unemployment rate make it harder for companies to attract and retain in-demand labor. The Federal Reserve Bank of Dallas has consistently said the past three years that low unemployment would be a big choke point for Texas’ economy.

“Over the last five years [San Antonio is] up by 4,000 tech workers,” said Russell who also noted the growth in universities graduating tech degrees is up 35% over the same period.

But those five year growth numbers dropped 4 percentage points to 14% from last year. Growth software developer numbers, computer support workers and managers have all seen growth rates drop and average wages fell below 2017 levels. That year, the average software developer made $103,529 a year compared to just over $99,000 a year today.

Credit Paul Flahive | Texas Public Radio
Area startups interview students for Students Startups internships

“It’s clear we aren’t making progress in a vacuum,” said Dax Moreno, chief technology recruitment officer for Tech Bloc. “We’re stagnant while everyone else is accelerating. We’ve gotta find the next gear and hit it if we’re gonna have any chance of staying in the race.”

Moreno — who’s responsible for connecting companies with talent — said the report may reflect a labor mismatch, noting that marketing, business operations and sales jobs increased and that companies are coming to him to assist on mid-level and beyond hires.

“We do have roles and job opportunities available. We’re just seeing a shift in the needs of the businesses,” Moreno said.

This mismatch also plays into the technology “brain drain” label the report gave San Antonio. Because current needs are often mid and senior-level jobs, new graduates may have a better opportunity elsewhere of landing an entry-level position. The report shows in 2019,  the city hosted 750 jobs less than tech grads, a reversal of previous years that showed a surplus of jobs for graduates with technology degrees. 

“My students in computer science, they’re considering offers from large companies here in San Antonio, for startups here. But they’ve also got offers from Google and Spotify and Amazon,” said Luis Martinez, director for innovation and entrepreneurship at Trinity University.

Trinity imports about 85% of its student body, who often leave the city immediately after. That was one reason Geekdom, the 80|20 foundation and Trinity launched the Students+Startups program to hook students on working in San Antonio before they graduate.

Credit Paul Flahive | Texas Public Radio
Scaleworks purchases tech companies and moves them to San Antonio.

One area that is often bandied about as a market benefit is the low cost of living in San Antonio. Tech workers make the smart economic move choosing San Antonio, they keep more of their money even with lower salaries. According to the report, on average they would keep $12,000 more than a New Yorker after only subtracting the cost of rent. 

That isn’t a compelling argument to someone who is 22, said Martinez.

“They aren’t doing that kind of algebra,” he said. “They’re looking at bottom line, how much is that offer and what’s the sort of sparkle-factor of being in a different community.”

Sparkle factor being defined as cool factor of the city, company or opportunity the job provides.

San Antonio continues to grow its millennial population, according to multiple reports. At 10 percent growth the past five years, CBRE ranked the city as one of the top 10 fastest growing cities for millennials.  

The tech “brain drain” label described by the report is not as bad as it sounds.

“If you’re creating more talent than the market is absorbing, that’s an opportunity,” said CBRE’s Lexi Russell. “Other companies are looking for untapped talent markets, and companies can do more to capture those grads.” 

Paul Flahive can be reached at Paul@tpr.org or on Twitter @paulflahive.

Paul Flahive can be reached at Paul@tpr.org