Brain drain describes a phenomenon in which skilled workers leave one location to pursue careers elsewhere. According to CBRE’s “Scoring Tech Talent” report, Los Angeles and Orange County are experiencing a brain drain of their own, specifically in the tech industry.
But there’s no reason to despair. In fact, a huge opportunity presents itself for businesses looking to bring in top talent — and keep it in LA.
So, what’s causing the brain drain? Simple. LA and Orange County are creating more tech workers than there are job openings.
And this is no small migration. LA produced 38,359 tech degree graduates during the past five years but only created 13,249 tech-related positions.
The top five markets in the report, which evaluated 50 tech markets in the US and Canada using 13 metrics analyzing a market’s depth, vitality, and attractiveness, were San Francisco, Seattle, Washington D.C., Toronto and New York.
Given the increasing convergence of technology, media and entertainment and LA’s unmatched talent pool, the number of companies calling Southern California home will only increase.”
Despite all the reasons to love living in LA, tech workers are packing their bags and shipping out to these top markets.
“In a way, this is a good problem to have,” said Vice Chairman Jeff Pion. “Many tech workers aren’t moving out of the area because they want to, but because there aren’t enough jobs. We need to do better in creating opportunities for all these talented folks.”
There’s reason for optimism. This imbalance of supply and demand spells opportunity for companies looking to set up shop in LA or those that already have.
When comparing Los Angeles to the usual suspects, LA comes in significantly cheaper. CBRE estimates the total operating cost of a 500-person tech company in the SF Bay Area to be $59.12M per year. For LA, that estimate comes in at $46.59M.
In a way, this is a good problem to have. . . . We need to do better in creating opportunities for all these talented folks.”
“LA isn’t exactly cheap but it's certainly less costly in many ways than the Bay Area, for example,” said Pion. “Add to that the fact that the name of the game is content creation today, and you quickly realize LA is the place to be. Given the increasing convergence of technology, media and entertainment and LA’s unmatched talent pool, the number of companies calling Southern California home will only increase in the years to come.”
Los Angeles ranked number one in the US on CBRE’s list of tech talent momentum markets, thanks to its tech labor force growing 12.3% faster in the last two years than it did in the previous two-year period.
Its neighbor, Orange County, ranked fourth on the list with a 10.6% momentum gain.
This indicates one thing: young tech workers want to be in LA, and when given the chance, they’ll pounce.
Smart companies will take heed and scoop up the talent while eschewing the exorbitant cost of doing business in the tech meccas.
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