This blog is the fourth in a series that examines the technology talent gap by major metro area serviced by Genesis10. The series has covered Milwaukee, Charlotte, and Cleveland thus far. We will also be examining the following markets in the weeks to come: Dallas, Kansas City, and Orlando. In this installment, we explore Austin tech growth and what it means for the Austin economy.
Austin’s tech sector is expanding rapidly, with major employers like Amazon, Apple, Google, and Facebook adding significant investment and jobs. However, an extremely tight labor market is making hiring difficult, slowing regional growth and prompting concern from the Dallas Fed. To address the gap, leaders call for stronger education–industry collaboration and K–12 tech requirements, while companies use bonuses and alternative talent pipelines (reskilling, retirees, veterans, junior talent) to boost capacity. Growth remains strong, but workforce constraints threaten momentum without creative, sustained solutions.
In late March, Amazon announced that it is expanding its Austin Tech Hub and plans to create 800 new Austin tech jobs in such fields as software engineering and cloud computing, among others.
It’s building on momentum—in the past four years, Amazon has created more than 1,000 jobs in Austin.
“With a strong pool of technical talent and dynamic quality of life, we are excited to continue to expand and create more opportunity in this vibrant city,” said Terry Leeper, General Manager of Amazon’s Austin Tech Hub.
“This expanding presence is indicative of our region’s ability to provide creative and innovative talent. We’re proud to call Amazon a partner in our efforts to achieve regional prosperity,” said Gary Farmer, Opportunity Austin Chair, Austin Chamber of Commerce.
According to a Bloomberg article, “Austin Is Building a Mini Silicon Valley,” Apple, Facebook and Google all have established large Austin outposts and each recently has signaled plans to expand there.
In 2018, the Austin metropolitan area added 36,800 net new jobs, or 3.5%, according to the Texas Workforce Commission and the Bureau of Labor Statistics. Austin’s 3.5% growth makes it the fourth best-performing among the 50 largest metro areas in the U.S. Austin is also attracting talent because of its affordability, employment opportunities and eclectic city vibe. This momentum reflects ongoing Austin tech growth.
The Austin Statesman reported that companies “are having trouble finding employees locally amid an extremely tight Austin labor market that is straining businesses from retail stores and restaurants to software developers and construction firms.” Widespread hiring difficulty, it said, “is starting to slow the growth of Austin’s long-booming economy,” according to recent data from the Federal Reserve Bank of Dallas.
Christopher Slijk, an assistant economist at the Dallas Fed, said that the tight labor market is a reason for the slowdown. “The region is almost a victim of its own success (because) the area has grown so quickly that it can’t bring in enough workers for businesses to fill the positions that need to be filled.” The Dallas Fed revised its measure of the region’s annual growth rate from 6% to 4.7%.
An article in the Austin Business Journal, Tight Labor Market Starts to Drag on Austin Economy, echoes these sentiments, reporting that employers are having difficulty filling such tech roles as software developers, Linux engineers and business operations analysts, including many Austin tech jobs.
The Austin market may be cooling down a bit due to the tight tech labor market. The piece also underscores pressures on the Austin economy.
William Mellor, Vice President at Angelou Economics, feels that immigration reform could ease the situation by enabling foreign workers to fill open positions. He went on to say that the labor market has been a problem in Austin for some time.
Academic leaders recognize and emphasize the need for strong collaboration between the education system, from community colleges to four-year universities like Texas State, and Corporate America on workforce needs. Richard Rhodes, President and CEO of the Austin Community College District, said his institution draws on the advice of roughly 700 business leaders per year to learn how ACC’s academic programs can prepare students for specific careers.
Another suggestion from the Chief People Officer, Laura Sue D’Annunzio at Rackspace, is to require tech classes in K–12 education. “Tech classes shouldn’t be electives,” she said—“they should be required.”
The technology talent market remains tight nationwide. While Austin has many amenities that make the city a desirable place to live, and tech companies like Amazon, Google and Apple are expanding here—both of which attract young tech workers to the area—we are seeing companies get creative with signing bonuses, retention bonuses and other perks in an effort to retain their FTEs, according to Colleen McIntyre, Central Texas Region Managing Director at Genesis10.
In addition to the retention tactics Colleen shared, creative approaches and investment will be required to increase workforce capacity and capabilities in the short-term. Staffing companies and consulting firms alike are looking at talent pools through a different lens—by bringing back retirees, training to upskill or reskill, tapping returning military veterans or developing junior talent are all tactics being used to increase workforce capacity whether it is in Austin or across the United States.
Answer: Major tech employers are expanding aggressively in Austin, citing strong local talent and quality of life. Amazon plans 800 new tech jobs on top of 1,000 added over the past four years. Apple is investing $1 billion in a campus designed for 15,000 additional employees, and Google and Facebook are also expanding. New entrants like Juul are opening offices, and Austin’s appeal—affordability, job opportunities, and an eclectic city vibe—has helped it earn U.S. News & World Report’s “Best Place to Live” three years running. In 2018 alone, the metro added 36,800 net new jobs (3.5%), ranking 4th among the 50 largest U.S. metros.
Answer: The labor market is extremely tight across sectors, making it hard to find local talent, especially for roles like software developers, Linux engineers, and business operations analysts. The Dallas Fed notes Austin is “a victim of its own success”—growth has outpaced the region’s ability to bring in enough workers—prompting a downward revision of its annual growth measure from 6% to 4.7%. This shortage is beginning to slow the broader regional economy.
Answer: Companies are boosting retention and hiring with tactics like signing and retention bonuses and other perks. To expand capacity, staffing and consulting firms are widening the talent lens: bringing back retirees, upskilling or reskilling workers, tapping returning military veterans, and developing junior talent to meet demand in the near term.
Answer: Stronger education–industry collaboration and earlier tech education. Austin Community College engages roughly 700 business leaders annually to align programs with workforce needs. Leaders also suggest making technology classes a K–12 requirement (not electives) to build a sustained, job-ready pipeline.
Answer: Potentially. Some local economic voices suggest immigration reform could help by enabling more foreign workers to fill open roles. More broadly, sustained, creative solutions—education partnerships, alternative talent pipelines, and retention strategies—are seen as essential to maintain Austin’s growth momentum amid a nationwide tech talent tightness.