U.S. Talent Migration: The Stories Behind the Story

An analysis by CBRE Americas Consulting shows the conventional narrative that knowledge workers are abandoning high-cost major U.S. markets is not the complete story:

1. High-cost major markets still have much larger talent pools than most Sun Belt cities.
2. Out-migration from high-cost major markets during the pandemic was relatively minor and has been slowing, even reversing in metro New York.
3. High-cost major markets are among the preferred destinations for young tech and finance talent.

Migration’s Relative Impact on Metro Talent Pools

High-cost major markets experienced an outflow of talent during the pandemic but still have larger talent pools than most Sun Belt markets. The workforce diminution in these cities was minimal over the three years ending February 2023.¹ For example, metro New York had a net outflow of around 47,000 professionals, representing a -0.6% workforce decrease. Outflows as a percent of total workforce were similarly modest in San Francisco (-0.9%), Chicago (-0.6%), Boston (-0.4%), Los Angeles (-0.2%) and Washington, D.C. (-0.2%). In contrast, many Sun Belt markets saw material growth fueled by in-migration: Austin led the way with a 4.1% increase in total talent, followed by Nashville (2.6%), Tampa (2.6%), Charlotte (2.2%) and Raleigh (1.9%). But, at these rates, it would take over 80 years for Austin’s talent pool to reach the size of San Francisco’s. Despite the pandemic-driven shifts in migration, most high-cost major markets still maintain an undeniable talent pool size advantage.

Figure 1: Net Migration as % of Total Labor Force (February 2020 to February 2023)

Source: CBRE Americas Consulting; LinkedIn Talent Insights.

Shifting Migration Momentum

The trend of talent migration out of high-cost major markets is slowing and, in metro New York, reversing. Metro New York’s talent out-migration in the first two years of the pandemic morphed into a net talent inflow during the year ending in February 2023. No other major metro area has seen a similar reversal but out-migration has slowed in San Francisco, Chicago, Boston and Los Angeles. Washington, D.C. was the only major market with a slightly higher rate of out-migration over the past year ending February 2023.

Several top destinations for talent during the pandemic are now seeing lower levels of in-migration, including Austin, Nashville, Denver, Phoenix, Las Vegas, Miami and Atlanta. However, Dallas-Ft. Worth, Charlotte, Tampa, Orlando and Houston bucked this trend with higher in-migration in the year ending February 2023.

Figure 2: Net Annual Migration (February 2022 vs. February 2023)

Source: CBRE Americas Consulting; LinkedIn Talent Insights.

¹ Year-over-year data throughout this piece is based on the month of February due to the timing of the COVID-19 pandemic’s impact on talent migration.

Migration by Skill Set and Years of Experience

Tech Talent:

Seattle and San Francisco are among the top five metros for in-migration of young tech talent (0-6 years of experience) over the year ending February 2023. For recent grads (0-3 years of experience), Seattle led the way with a 15.2% in-migration rate, followed by Austin (9.7%), San Francisco (9.1%), Indianapolis (4.6%) and Dallas-Ft. Worth (4.1%).

Recent migration patterns differ for mid-to-late career tech talent (11+ years of experience). Lower-cost Sun Belt markets had the greatest in-migration of this cohort, including Austin (2.0%), Dallas-Ft. Worth (1.7%), Tampa (1.7%), Raleigh-Durham (1.5%) and Jacksonville (1.4%). San Francisco saw a -0.4% decrease of its more experienced tech talent pool. Only New York and Chicago had a larger loss of mid-to-late career tech talent (-0.6% and -0.8%, respectively) during this period.

Strikingly, two top coastal markets, Seattle and San Francisco, were among the top inbound markets for tech talent growth across all experience levels over the year ending February 2023. Seattle was the U.S.’s number two market (11.5%), while San Francisco ranked number five (4.7%). Austin was the top growth market (15.0%).

Figure 3: Top Five Markets for % Net Gain of Tech Talent (Year Ending February 2023)

Source: CBRE Americas Consulting; LinkedIn Talent Insights.

Finance Talent:

Recent grads (0-3 years of experience) migrated at the highest rates to well-established Sun Belt financial centers like Charlotte (13.0%), Tampa (6.9%) and Nashville (5.3%) but also to high-cost major markets like New York (6.6%) and Chicago (4.5%) over the year ending February 2023. Metro New York was also among the top five markets for net in-migration of finance talent with 4-6 and 7-10 years of experience.

Like tech talent, the top in-bound destinations for mid-to-late career finance talent (11+ years of experience) are smaller, lower-cost Sun Belt markets, such as Tampa (1.8%), Jacksonville (1.2%), Las Vegas (1.2%), Nashville (1.1%) and Orlando (1.0%).

The top three in-migration markets for finance talent at all experience levels over the year ending February 2023 were Charlotte (1.9%), Tampa (1.7%) and Nashville (1.1%). Metro New York ranked 11th, with a 0.6% rate of in-migration.

Figure 4: Top Five Markets for % Net Gain of Finance Talent (Year Ending February 2023)

Source: CBRE Americas Consulting; LinkedIn Talent Insights.

Economic and lifestyle considerations largely drive talent migration patterns, which play out differently based on how long a person has been in the workforce. Younger professionals tend to gravitate toward higher-cost major markets and fast-growing Sun Belt metros based on greater job prospects, networking opportunities and cultural experiences. Mid-to-late career professionals are more likely to prioritize lifestyle factors such as a desire to buy an affordable single-family house with adequate space to raise a family. Smaller Sun Belt markets offer a lower cost of living and a slower-paced atmosphere, while offering job opportunities suitable for talent with established careers.

The Big Picture

Any talent location strategy requires understanding the impact of in-bound and out-bound migration on the talent pool. However, a number of factors must be analyzed over a long period to gain a full understanding of a market’s talent capacity. For example, the emerging talent pool of new local university graduates each year is often larger than the new talent pool relocating into a market. Companies should also focus on the migration patterns of their desired skill sets and experience levels, rather than just the aggregate population or total workforce.