How Housing is Affecting the Search for Startup Talent

Finding new talent has become a major issue for startups. Silicon Valley titans like Google, Apple and Facebook are known to regularly squabble over the best workers the tech industry has to offer. But what about the companies that don’t have billions in assets?

Brand-new startups, unicorns and everything in between are competing with some of the most valuable companies in the world for top tech talent. While some companies, including my company RealtyShares, have built a technology-based platform in the heart of San Francisco, others have come up with creative ways to factor different housing markets into their talent searches.

The Bay Area Housing Crunch

San Francisco and the surrounding Silicon Valley region is an undisputed hub for tech workers. But while the city offers a vibrant lifestyle, countless career opportunities in tech and a wonderful business and social scene, it is also one of the most expensive places to live in the world.

In the land of $3,320 studio apartments, new startups setting up roots in San Francisco and companies around the world looking to add a Silicon Valley outpost now struggle to bring the best workers to the city. Hiring current Bay Area residents is quite competitive, and bringing new talent into the city is a major challenge thanks to the high cost of living.

Automation startup Zapier has developed  a unique solution to address this problem. They are offering new employees a “de-location” bonus of $10,000 if they are hired and leave San Francisco in the first three months — an innovative approach to managing the high cost of retaining employees in Silicon Valley. According to data from real estate firm RedFin, popular destinations for Silicon Valley expats include Sacramento, Southern California, Seattle and Portland.

Even within Northern California, there are less expensive areas in which to situate workers. Startups like 99Designs and EVB have jumped across the bay from San Francisco to Oakland. Likewise, tech companies have looked to Sacramento, Fremont and other Northern California suburbs to save money for themselves and their workers without straying too far from the city.

Growth in other hot tech regions around the country

There are other technology hubs that could be ripe for bringing in great workers. New York and Chicago have traditionally been major commerce centers, and a new golden age of real estate technology has emerged in New York. But other, less expensive hubs are also becoming more attractive.

Austin, Denver, Portland and Raleigh have been at the top of real estate and “best places to live” lists over the last few years, and those cities, along with suburbs like Round Rock near Austin, Boulder and Louisville north of Denver, and Beaverton next to Portland, Oregon, are home to great technology scenes. Tech incubators like Techstars in Boulder are attracting innovative new businesses to these areas.

One exciting and underrated city recently emerging as a great hub for tech workers and tech companies is Salt Lake City, as SoFi’s Bob Park recently shared. Cities like Salt Lake City and its suburbs offer a great, outdoor focused lifestyle with a much lower cost of living. Nevertheless, the biggest cities still reign supreme. Big Four accounting firm Deloitte recently released a report on cities for top talent in the tech industry, ranking New York, Silicon Valley and Chicago as top cities in the world for high tech workers.

Businesses choosing office locations based on specific needs

Each company is different and has unique needs for workers. Some might need the latest graduates, some need to fill a customer support call center, others are happy hiring experienced, retired workers part time. Depending on business needs, there is an ideal city for each business.

Best city to hire millennials

For companies looking to hire millennials with the latest education and experience, Seattle is a top choice according to data from Payscale. Amazon, Starbucks, Microsoft and Boeing are all major employers in the area that are capitalizing on the glut of educated millennials in the region. With their median salary at $55,500, millennials are able to offset the relatively high median home price of $619,950 and rents of $2,500 a month.

Best cities to hire call center staff

Major corporations often locate their call centers in less expensive American cities where they can hire native English speakers without the cost of major metropolitan areas like New York and San Francisco. Some examples include a major Verizon call center just outside Omaha, where the median home price is $214,000 compared with $774,950 in New York. Tampa, Phoenix, Salt Lake City, San Antonio, St. Louis and Atlanta are also major cities that hire call center staff. To save money, many call centers are even bringing on remote workers who take calls from the comfort of their own homes, further saving on the costs of a desk and call center real estate.

Best cities for workers over 50

Finding work as an older American is notoriously difficult. However, there are signs that things may be looking up for the more experienced employees. Workers older than 50 are often more flexible, reliable and experienced, according to AARP, which makes them a great fit for many companies. Dallas, Nashville and Richmond are among the best cities for older employees in America.

Remote workers

While Yahoo And IBM have both recently made big splashes by recalling remote workers back to the office, the overall trend is toward more people working from home. At a recent conference in London, 34 percent of those surveyed said that at least 50 percent of their company’s workforce would be remote by 2020. Twenty-five percent of those surveyed said at least 75 percent of workers would no longer be in the office. There are many benefits to working remotely, including increased worker productivity, lower stress and reduced turnover rates and overhead; companies are taking note.

Flexibility leading to companies people love

According to a recent article by Dan Schawbel, “76 percent of full-time workers are either actively looking for a job or open to new opportunities and 48 percent of employers are unable to fill their job vacancies because of the skills gap and high attrition rates.”

Job markets favor workers with the best skills and backgrounds to dive in and contribute immediately, but attracting and retaining employees is a challenge. CEOs strive to build companies that personnel love being a part of while ensuring workers are happy and successful. Taking into account housing markets and costs of living for employees is a major component of fulfilling those goals.