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August 27, 2020

The New Tech Hotspot Is…Tupelo, Mississippi?


Forced to work from home due to the COVID-19 pandemic, tech workers are fleeing pricey tech hubs like Silicon Valley taking up residence in more affordable abodes. According to one new survey, places like Sioux Falls, South Dakota and Tupelo, Mississippi, could be the beneficiaries of this trend.

Remote work has become the norm for many tech professionals since March, when the COVID-19 pandemic set in and public health officials around the country began shutting down schools and businesses. Now, nearly six months in, workers who can work anywhere are questioning why they’re paying to live in expensive places such as Sunnyvale, where the median price of a home is about $1.5 million.

According to a survey by Blind, which develops a workplace app that allows 3.6 million professionals to anonymously communicate, 15% of its users who work in the San Francisco Bay Area have relocated outside of the area since the COVID-19 work-from-home trend began.

The survey, which was conducted anonymously, indicates that 17% of Google workers have relocated, while 24% of workers for Uber have. Only 5% of Oracle employees surveyed have moved out, while 16% of Walmart employees have relocated.

A survey by Blind indicates that between 5% and 24% of of Bay Area tech workers have left the area (Source: Blind)

Only a small fraction of employees surveyed by Blind indicate they would go back to working in the office every day after the COVID-19 pandemic is over. The company with the highest percentage of employees who would work full-time in the office is Apple with 22%. No employees at Salesforce said they would work a 40-hour week after COVID-19.

More evidence of a shift in the tech worker landscape comes to us from Mendix. The Boston, Massachusetts-based software company cross-referenced 2,000 help-wanted ads for developers in July with data from 3 million American households via the U.S. Census Bureau’s American Community Survey, and then plotted the outcomes on a map.

The geo-analysis, which it calls its Software Developer Drought Index, highlights areas of the country that are experiencing the highest demand for software developers but have the least supply. The biggest differential between supply and demand is in Cumberland County, New Jersey (just outside of Philadelphia, Pennsylvania), followed by Minnehaha County (Sioux Falls, South Dakota), and Pontotoc County (Tupelo, Mississippi).

Tech hubs such as Fairfax, Virginia, and Silicon Valley in California continue to have the highest demand for tech workers, the company said. But they also have the highest supply of talent.

When people work remotely, they’re no longer tied to a particular location, points out Derek Roos, the CEO of Mendix. “The Software Developer Drought Index shows that companies need to think differently about how and where to engage skilled tech workers in 2021 and beyond,” he says in a press release. “Traditional development paradigms basically fall apart when you’re dealing with mobile or remote workflows.”

There’s plenty of anecdotal evidence that indicates remote work will be here for the long haul. Several of the tech giants in Silicon Valley, including Facebook, which employs 52,000 workers and Alphabet (the parent company of Google), which employs about 200,000 workers, announced that employees won’t be returning to headquarters until at least the summer of 2021. Twitter and Slack announced that they will be moving to remote work permanently.

Job opportunities for developers are increasing outside of large metro areas according to a study by Mendix (Image courtesy Mendix) 

Many smaller firms in Silicon Valley, including those developing AI and big data management tools, have followed the lead of the tech giants in embracing remote work, at least during the COVID-19 pandemic. Many workers have taken the companies up on their offer and have moved out of the area, which has been plagued by very high housing prices.

The impact on rent has been fairly dramatic. Rental rates in San Francisco and San Jose have dropped by up to 7%, while they’ve dropped by 14% to 15% in Silicon Valley cities like Mountain View and Menlo Park, home to some of the biggest tech campuses. But rents are up in places like Sacramento, California; Reno, Nevada; and Boise, Idaho, indicating higher demand.

Year-over-year home prices, meanwhile, have increased by less than 2% in previous tech hotbeds like San Francisco and New York City, but have gone up by 4% or more in places like Denver, Colorado; San Diego, California; and Phoenix, Arizona.

Flexibility will be key to attracting employees in the post-COVID-19 era. According to the State od Developer Satisfaction report released today by Harness, nearly 75% of companies plan to continue keeping a remote or distributed workforce following the pandemic. That’s up from just around 2% of developers reporting their teams were fully remote prior to COVID-19.

“As COVID-19 continues to wreak havoc on traditional business models, it is more critical than ever to hire and retain talented software developers, who are the heart of every company’s innovation,” said Jyoti Bansal, co-founder and CEO of Harness.

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