The tech labor landscape is becoming increasingly nuanced; various economic factors such as cost of living, anywhere work, and preexisting labor clusters within metropolitan areas are contributing to current labor headwinds. Tech execs who continue to rely on traditional tech talent pipelines will increasingly see diminishing returns as talent adopts greater geographic mobility and requires more meaningful employee experience. Talent has dispersed into regional pockets, making it crucial for tech execs to focus on budget and recruiting strategies that create and capture more value-for-talent opportunities in emerging labor markets.
Consider the Nashville-Davidson-Murfreesboro-Franklin, TN metropolitan state area (MSA) as an example. The region is considered emerging due to the higher growth and lower concentration of tech labor compared to other regions. High growth indicates a growing supply; low density indicates a smaller portion of the overall workforce. This presents a window of opportunity for value-for-talent. Software developers are well below the national labor density but are steadily becoming a big portion of the Nashville area’s tech labor composition, which indicates that there is opportunity for organizations to invest and build a presence in the area.
According to the Bureau of Labor Statistics (BLS), the average annual salary for software developers in the Nashville area in 2021 was $102,970, while the national mean annual wage for software developers was $120,990. This indicates that tech execs can provide a competitive edge to these roles in the area, unlike some other highly competitive regions with higher pay and demand (e.g., San Jose).
Nashville’s surge into the emerging tech labor market spotlight is further fueled by industry and economic development investments in the area. Big tech is starting to take advantage with Amazon and Meta building presences. In addition, the Nashville Technology Council has begun an aggressive campaign to double the region’s tech workforce by 2025. The campaign, TechIntoNashville, intends to make an increased tech workforce a top priority for the region.
Nashville is a primer that shows how the tech labor market should be approached, highlighting the importance of tech execs adapting their labor strategies in reaction to new trends. Learn more about the current labor market challenges and insights into effective strategies in our new report, Adopt An Anywhere-Work Strategy To Compete In The Future Tech Labor Market.
This research falls under Forrester’s tech insights and econometric research (TIER) series.
In the figure above, labor density is equivalent to the BLS’s location quotient. BLS’s methodology to calculate location quotient is here.