The COVID-19 pandemic has reshaped many people’s attitude toward work, from embracing greater flexibility to an evolving relationship with the physical workspace.
For software developers specifically—who tend to be able to work wherever they have an internet connection strong enough to open an IDE and Slack—location is becoming less important than quality of life.
Where the most talented US-based software engineers would formerly have to relocate to cities like San Francisco, Seattle, or New York for the best opportunities, a new set of emerging hubs is quickly making up ground in terms of quality of life and overall earning potential.
“As more organizations shifted to remote or hybrid working models, we had started to see significantly improving candidate performance outside of the more-established tech hubs,” wrote Patrick Wu, a data analyst at technical hiring specialist Karat, in a blog post.
According to a recent study by Karat—which assesses technical candidates based on a how likely they are to pass an interview—while those big three US tech hubs still have the highest concentration of software engineering talent today, cities like Pittsburgh, Atlanta, and Portland, Oregon, are quickly putting themselves on the map for hiring managers.
For example, fintech giant Stripe is now hiring 74% of all new joiners (not just developers) from outside of the San Francisco Bay Area and Seattle, up from 39% in the first quarter of 2019, according to CEO Patrick Collison.
Similarly, Cloudflare has seen its San Francisco office shrink in 2021, as 90% of new hires come from outside the Bay Area, according to CEO Matthew Prince. “I think the rate at which the tech industry is going global is still underappreciated, and that this will be a big tailwind for the world over the next decade,” Collison tweeted.
“The place to be was Silicon Valley. It feels like now the place to be is the internet (which is everywhere). I expect this trend to only accelerate,” Airbnb founder Brian Chesky tweeted in response to Collison. Chesky is currently running his own grand personal experiment of working out of different Airbnb properties every couple of weeks.
While money is still the great motivator for developers seeking a new role, with 65% prioritizing better compensation when switching roles, flexibility is the most important factor for 65% of developers considering whether to stay in their current role, trumping even salary at 59%, according to analysis by developer hub Stack Overflow.
“The rise of remote work, even before the pandemic, planted the seeds that are now bearing fruit in the form of the developer exodus: Developers exhausted by corporate hierarchies, long commutes, expensive cities, and corrosive company cultures have been shifting to remote self-employment for a decade,” wrote Eira May in a Stack Overflow blog post.
For more software engineers, like AWS principal engineer Jaana Dogan, the pandemic-driven shift to remote working has opened up a whole new set of options regarding where they choose to live.
“It’s a candidate’s market at the moment and they have more power than ever,” Karat cofounder Jeff Spector told InfoWorld.
“The joke about every hiring conversation ending in “must relocate to San Francisco” just isn’t true anymore,” wrote RedMonk analyst James Governor in a blog post. “These changes were set in place before the pandemic. Now they’re in stone. We’re not going back to the world’s elite software engineers all living in one city.”
These trends are clearly driving a shift towards secondary tech hubs and beyond as remote work is becoming the norm for engineers. So, where are they going?
With a 40% pass rate, Karat’s top-ranking secondary city for hiring remote software engineers is Pittsburgh. An excellent pool of computer science graduates, cheap rent, and below-average living costs make Pittsburgh a highly attractive location for companies to source remote engineering talent.
Pittsburgh has a cost of living index of 81, which is crowd-sourced by Numbeo and measured relative to New York City, which would score 100. For context, San Francisco has a cost of living index of 94 and Seattle 89.
While California remains a tech talent hot spot, the map is expanding beyond just the San Francisco Bay Area into cities like Los Angeles, San Diego, and even smaller communities like San Luis Obispo, Lake Tahoe, and across the border into Oregon.
Both Los Angeles and San Diego saw their average pass rates on Karat jump significantly over the past year, now standing at 40% and 29%, respectively. Great weather, a growing tech scene, and a cost of living index below 80 make both cities compelling alternatives to the Bay Area. Software developers’ salaries are on the high side too, averaging $86,500 in L.A. and $81,500 in San Diego, according to Payscale.
Despite its historic role in the hardware side of the tech industry, thanks in part to companies like Compaq, Texas Instruments, and Dell, there has been much made recently of the Longhorn State’s burgeoning position as a modern tech hub, especially following Elon Musk’s decision to move the Tesla headquarters there from California in 2021.
Today, the Karat study reveals that despite some major tech companies and executives moving to Texas during the pandemic, Texas has not seen a significant uptick in its average technical interview pass rate, suggesting there hasn’t been a flood of new developer talent to cities like Houston and Austin.
Thanks to the lack of state income tax and low rents, those cities do have a distinct cost of living advantage over other cities listed here, with Houston at 65 and Austin at 67 on the Numbeo index, and salaries average $72,000 in Houston and $77,000 in Austin, according to Payscale.
Coming in fourth on Karat’s rankings with a 40% pass rate, Portland, Oregon, has clearly benefited from the migration of tech workers from the Bay Area. The city and its suburbs like Beaverton and Hillsboro might be best known as the home of sports brand Nike, but the Silicon Forest also has deep tech roots, with computing pioneers Sequent, InFocus, and Planar founded there and major tech companies Hewlett-Packard, Tektronix, and Epson with decades-old research and manufacturing arms.
Today, Portland still boasts a large technology sector, a cost of living index of 78, and average developer salaries of $75,000, according to Payscale.
A 36% pass rate on Karat, good universities, a cost of living index of 77, average salaries of $75,500, and a highly diverse population make Atlanta a promising location for hiring remote engineers. This has been reflected by major investments in the city from tech companies like Airbnb and Google.
Home to some of the best universities in the world, Boston was America’s first tech hub, with Route 128 giants like Digital Equipment, MITRE, Data General, Raytheon, and EMC. It then fell into disfavor as California’s Silicon Valley ascended first in computer engineering and then in software engineering, but that is changing as developer jobs have proliferated in greater Boston.
The city has a respectable 31% pass rate on Karat, but with a cost of living index of 86, Boston isn’t much cheaper than the West Coast tech hubs or New York. This is reflected in the average developer salaries, however, which are high at $88,000, according to Payscale.
Of course, these aren’t the only cities where great software engineering talent can be found. Florida, in particular Miami, is quickly becoming a hub for activity around crypto and Web3 development, and Nashville, Denver, and Charlotte, North Carolina, have all seen significant influxes in tech talent since the pandemic.
But really, anywhere in the world is now a viable option for many software developers. “Great talent is everywhere and people are starting to wake up to that,” Karat’s Spector said.
Still, don’t underestimate the allure of the major tech hubs like the San Francisco Bay Area. Despite Pittsburgh’s appeal, one recent University of Pittsburgh graduate, Zhengming Wang, won’t be staying in Pittsburgh after he graduates with a bachelor of science in computer science.
Having grown up just outside of Philadelphia, and after getting a taste for the world of work through internships at software companies Qualtrics and Gusto, Wang is ready to spread his wings beyond Pennsylvania thanks to a job offer at small software startup Retool, which is based in San Francisco.
“[At Gusto] I was in the office a couple of times a week, depending on the commute,” he said. “I enjoyed going into the office, being around people, and having those serendipitous conversations. Personally, I would want to work somewhere with that hybrid option.”
Despite the added cost of living, graduates like Wang see the long-term opportunity cost of not being in a major tech hub as too high to pass up. “San Francisco is still special and I read about Pittsburgh or Austin being the next tech city, but I don’t see it,” Wang said. “Pittsburgh is still pretty blue-collar and doesn’t have that feeling of being a tech hub like the Bay Area does. It doesn’t have the same startup scene San Francisco does.”