The April Regional Employment: Why the West Is Thriving
All four major regions of the U.S. experienced employment growth of some kind over the past month, according to the ADP Research Institute® April Regional Employment Report. The West was the undisputed leader of the most recent report with the highest monthly growth rate. Ahu Yildirmaz, VP and Head of the ADP Research Institute®, attributes the trend in the West to "the growth of high quality tech jobs," in the region.
Yildirmaz noted that "hiring has been concentrated in mid- and high-wage industries," which has in turn impacted "housing prices, construction," and other factors in the West. The regional report findings have the potential to impact operations for HR leaders in a variety of industries and geographic areas.
Here are some trends to note from the April report, and why they could matter to your organization.
What's Up in the West?
When examined on both a Census Bureau and State Level, there's little question that the West is thriving. Some of that strength could be related to a disproportionate presence of small, tech-based employers and start-ups in the region. The Atlantic reports that two California cities alone account for more than 24 percent of global venture capital investment.
In addition, the strength of the tech industry has had a magnetic impact on the most talented job seekers. With a median household income of $95,000, according to Forbes, tech hub San Jose, California, is ranked among the top three cities in the U.S. for income. As a result of tech workers who are willing to migrate for better opportunities and wages, the West simply might not be facing the same issues with the talent market as other U.S. regions.
Why Higher-Wage Industries Have a "Trickle-Down" Effect
Tech organizations and other companies with above-median wages have a well-documented impact on regional economies. As The Atlantic writes, "rapid economic growth often brings with it spikes in housing prices and cost of living." A surge of high- and mid-wage workers can fuel demand for financial services, new home construction and trade fueled by consumer spending. For regions experiencing strong growth in tech roles and other professional industries, there's likely to be a fast trickle-down effect on related industries as demand for housing, retail and other services increases.
What Else Can Be Learned From the April Regional Employment Report?
It's well-known among tech talent recruiters that for organizations based outside tech hubs, the talent shortage can be particularly fierce. Oregon Live writes that as talent migrates to Seattle, San Jose, San Francisco and Austin for high-paying jobs, HR leaders in other cities can struggle to fill seats.
In a tight talent market, long-standing vacancies can slow growth across regional economies. While nationwide recruiters may not be able to compete with Silicon Valley wages, they can instead look toward non-financial compensation offerings that are on par with some of the most sought-after employers, including work-life balance, free lunches and opportunities for career growth.
The increase in high-quality tech jobs is good news for job growth in the West, but it could mean a drain on tech talent in other regions. As the labor market tightens in general, organizations may have to look beyond enticing wages to attract the right talent. Understanding and offering what employees are looking for in a company could go a long way in getting workers with the right skills to stay put.
Tags: Job Market