In the ever-evolving landscape of the tech industry, staying ahead of the curve is crucial for businesses seeking to harness the power of STEM (Science, Technology, Engineering, and Mathematics) talent. This is particularly true of the life sciences industry, which has emerged as a major force in driving the demand for new generations of STEM talent. The acceleration of AI, life sciences, and digitization in the workplace are contributing to both a boom in STEM positions along with increasing pressure to recruit talent with the necessary skills. But according to the latest research, the metropolitan areas fueling the largest growth in STEM are no longer in California. For MSPs, challenges and opportunities abound — but success means building a new network of suppliers who can deliver the workforce of tomorrow today.
Austin, Denver, and Seattle: Meet the STEM Hubs Rivaling Silicon Valley
Since 2016, leading real estate advisory firm RCLCO Real Estate Consulting and CapRidge Partners have published the STEMdex, an analytical report that ranks the U.S. markets most likely to experience the strongest STEM jobs growth. While we typically think of the Big Tech juggernauts in Silicon Valley as the catalysts to employment peaks and valleys in these fields, they’ve since moved down to the lower half of the top 10, according to RCLCO’s latest research.
“Austin, Texas headlines the RCLCO STEMdex,” RCLCO noted. “The Texas capital ranks among the ten best cities for current economic conditions, workforce quality, and quality of life although rising office costs (both for sale and for lease) and a relatively small airport dampen the appeal marginally. A significant expansion of the airport’s terminal capacity broke ground in August of 2023. There was only one new entrant into the top 20 this year, Richmond VA, with strong quality of life and workforce characteristics.”
There were also a few other surprises: “New York City, which ranked #13 last year, dropped off the list entirely while Orlando and Nashville both moved up the list significantly.”
The dynamics of the market have shifted with the rise of new tech hubs across the United States. The top 10 regions witnessing STEM growth are:
- Austin, TX
- Denver, CO
- Seattle, WA
- Raleigh, NC
- Washington, DC
- San Francisco, CA
- Portland, OR
- San Jose, CA
- Boston, MA
- Dallas, TX
Understanding STEMdex: A Comprehensive Approach to City Evaluation
Demographics play a powerful part in shaping these trends, with quality of life and business climate characteristics as primary influences. Access to lifestyle amenities remains important for families and workers considering where they want to work. The availability of hybrid or fully remote employment was the largest driver of migration from major cities who have comparatively higher costs of living. Knowledge based employment tends to have a higher degree of remote work and office attendance remains suppressed in markets with a high cost of living. The evaluation used by RCLCO encompassed four key factors.
- STEM Trends: This includes population metrics and wage data, providing insights into the demand and financial attractiveness of STEM occupations within a city.
- Workforce Quality: Educational attainment is a crucial indicator of a city's potential for STEM growth. High-quality education systems produce a skilled workforce capable of driving technological advancements.
- Quality of Life: Beyond the workplace, a city's livability plays a pivotal role in attracting and retaining top-tier talent. Factors such as cost of living, amenities, and cultural offerings contribute to a city's overall appeal.
- Business Climate: An environment conducive to business growth and innovation is vital for the sustained development of the STEM sector. Factors like regulatory policies, infrastructure, and access to funding are considered in this category.
Tech Hubs Taking Center Stage
According to STEMdex, Austin, Denver, and Seattle are emerging as the forerunners in STEM job growth. What sets these cities apart, and why are they becoming magnets for tech professionals?
- Austin, TX: Known for its vibrant tech scene and entrepreneurial spirit, Austin offers a unique blend of affordability and a high quality of life. The city's business-friendly environment has attracted a plethora of tech companies, fueling job growth.
- Denver, CO: Boasting a well-educated workforce and a diverse economy, Denver has become a hub for tech companies seeking a central location with access to talent. Its scenic surroundings and outdoor lifestyle contribute to the city's desirability.
- Seattle, WA: Home to tech giants like Microsoft and Amazon, Seattle has long been a tech powerhouse. A robust job market, combined with a rich cultural scene and natural beauty, makes Seattle an attractive destination for STEM professionals.
As we wrote earlier this month, the technology job market is evolving. Nearly 70 million new jobs will be created worldwide, according to the World Economic Forum's 2023 Future of Jobs assessment. Decision makers are realizing that the meteoric rise of innovation and break-neck speed of technological sophistication are the defining hallmarks of the future of work. In today's rapidly evolving business landscape, the demand for skilled professionals is higher than ever before. This leaves businesses facing a significant challenge: the need for skills is outstripping the supply. To remain competitive and innovative, organizations must prioritize hiring individuals who possess a unique set of skills.
Dan Terpening, the chief investment officer of CapRidge, further explained:
“The Tech industry has been the key driver for STEM jobs and local economies the past decade, but over the past 12-18 months that sector has slowed with company share prices down and hiring freezes being commonplace. Yet, the importance of Science and Engineering has never been greater with the advance of Life and Biosciences, EV plants, robotics in manufacturing, plus the heightened attention on infrastructure. That is strengthening sectors such as life sciences, data centers, and industrial. Thus, STEM continues to propel the economies forward that prioritize these areas. The 2023 STEMdex represents cities that continue to thrive by recruiting the best and brightest talent available, with Austin leading the way.”
The life sciences industry is at the forefront of innovation, driving breakthroughs in healthcare, pharmaceuticals, biotechnology, and more. It stands as a beacon of innovation and advancement, yet beneath the surface of this bustling sector lies a complex tapestry of staffing challenges.
Federal contracting is another factor. Firms such as Lockheed Martin, Raytheon, Cubic, Bohemia and Northrop Grumman all have a significant presence in Orlando, and the city is home to the National Center for Simulation. Richmond made inroads in workforce quality, quality of life, and local economic conditions. Richmond is the fastest growing region in the state with much of the growth originating from relocations of residents in other parts of Virginia, in particular North Virginia. However, it’s important to consider what enterprises like Lockheed Martin and Raytheon do: a lot of defense work. And areas such as Orlando and Richmond offer proximity to military bases and research facilities.
Challenges Facing Staffing Managed Services Providers (MSPs)
In September, we discussed “The Importance of New Suppliers in Life Sciences MSP Programs: New Ideas, New Paths to Innovation.” To help manage complicated workforce structures, life sciences companies often leverage managed service providers (MSPs) to manage their staffing needs efficiently. And where regular supplier enrollment and sourcing processes were once standard practices, many MSPs have since “locked in” their staffing partners. Some agencies have been in any given program for years. But to overcome the workforce obstacles confronting life sciences enterprises, introducing new and small business suppliers can make a huge difference.
The situation, although well illustrated by life sciences, certainly isn’t exclusive to this space. While the flourishing STEM job market presents exciting opportunities, it also brings forth challenges for MSPs aiming to meet the escalating demand for skilled professionals.
- Talent Shortage: The rapid growth of the tech industry has created a shortage of qualified STEM professionals. MSPs must navigate this competitive landscape to connect clients with the right talent.
- Evolving Skill Sets: Technology is evolving at an unprecedented pace, leading to a constant need for professionals with up-to-date skillsets. MSPs must adapt to changing industry trends and ensure they can source candidates with the latest expertise.
- Increased Competition: As tech hubs become more attractive, the competition among businesses for skilled professionals intensifies. MSPs need to differentiate themselves and provide added value to both clients and candidates.
- New Geographic Considerations: While many MSPs may have developed strong regional supply chains and presences in hot tech markets like Austin and California, they may not have the regional coverage needed to support emerging STEM markets.
How Staffing Firms Can Help Capture STEM Talent
Staffing firms, with their extensive industry knowledge and recruitment expertise, are ideally positioned to address the challenges posed by the booming STEM job market. Here's how they can assist clients in capturing top talent.
- Strategic Talent Acquisition: Staffing providers have refined a series of targeted talent acquisition strategies to identify and attract STEM professionals. This includes leveraging industry networks, utilizing advanced sourcing techniques, and maintaining a strong online presence.
- Skills Assessment and Development: To address the evolving skill sets required in STEM fields, many staffing suppliers have implemented rigorous skills assessment processes. This ensures that candidates not only meet the current demands but also possess the adaptability to thrive in a rapidly changing technological landscape.
- Market Insights and Trends: Staffing firms stay abreast of market trends, salary benchmarks, and regional dynamics. By providing clients with valuable insights, they enable informed decision-making in the hiring process, contributing to the long-term success of both clients and candidates.
- Asynchronous Workforce Management: Staffing firms are uniquely positioned to effectively manage asynchronous workforces due to their inherent flexibility, adaptability, and expertise in remote team management. They have extensive experience in managing remote teams, having placed and supervised countless temporary and contract workers remotely. They understand the nuances of remote work, including communication strategies, performance management, and team building techniques for asynchronous environments.
- Unique Regional Coverage: Staffing firms are located across the nation, which means they bring unique insights into the labor dynamics, workforce trends, and recruiting strategies best suited to specific areas. By incorporating a more diverse network of suppliers, MSPs are better positioned to concentrate on openings in new areas.
Now is the Time for MSPs to Consider New Staffing Partners
With the STEM job market reaching unprecedented heights, MSPs have a unique opportunity to strengthen their position by bringing new staffing partners into their programs. Here are key reasons why now is the ideal moment for such collaboration.
- Access to Specialized Expertise: Partnering with staffing firms specializing in STEM recruitment provides MSPs with access to a pool of professionals with niche skills. This expertise is crucial in meeting the specific demands of clients in technology-driven industries.
- Scalability and Flexibility: The dynamic nature of the STEM job market requires MSPs to be agile and scalable in their approach. Collaborating with specialized staffing partners allows MSPs to adapt to changing client needs and market dynamics swiftly.
- Geographic Expansion: Tech hubs are not limited to a single geographic location. Partnering with staffing firms operating in diverse regions allows MSPs to expand their reach and cater to clients with a national or global footprint.
- Innovation and Technology Integration: STEM recruitment often involves cutting-edge technologies and innovative sourcing methods. Partnering with firms at the forefront of technological advancements ensures that MSPs stay ahead of the curve in delivering efficient and effective talent solutions.
The STEM job growth in tech hubs like Austin, Denver, and Seattle presents both opportunities and challenges for MSPs. By understanding the dynamics of these markets and leveraging the expertise of staffing firms, MSPs can play a pivotal role in connecting clients with the top STEM talent needed for continued innovation and success. Now, more than ever, is the time for MSPs to consider bringing new staffing partners into their programs, forging collaborations that will drive mutual growth and excellence in the ever-evolving world of STEM employment.