Minnesota Companies Face Steeper Competition for Tech Talent as Remote Work Increases

By: Katie McClelland, Director of Policy and Research, Minnesota Technology Association

A new report¹ out from the Technology Councils of North America (TECNA) details the migration of tech jobs since the pandemic began, showing which states have been winners and losers when it comes to bringing tech talent to their states.

While Minnesota has traditionally competed with neighboring states like Wisconsin, Iowa, North and South Dakota for talent, since the pandemic began Minnesota’s growth of tech workers has slowed to 38^th in the nation.

Of our neighboring states, just North Dakota ranks below us, while South Dakota is ranked at 15^th in the nation for increases of tech cluster² jobs since December of 2019. Unfortunately, this is not a new trend in Minnesota, as we’ve seen the growth of tech jobs happening at a slower rate than most of the country in major part because of a lack of talent to fill available jobs. With job openings in Minnesota still at an all-time high, we need to expand our talent pipelines.

One consideration is turning to recruiting outside of the MSP metro area.

Remote work for tech occupations has increased by 421% as compared to 195% for all other occupations, however this also means Minnesota companies need to not just compete with neighboring states for talent, but also with the rest of the country and even the world.³

Since the pandemic began, data shows that tech talent is settling in areas outside of the MSP metro at faster rates than Minneapolis/St. Paul, which has only seen a 5.7% increase. Neighboring metro areas cited in the TECNA study with faster growth rates than Minneapolis/St. Paul include Madison (7.9%), Appleton (6.3%) and Milwaukee (5.8%), WI; as well as Des Moines (8.5%)and Davenport (7.4%), IA.

Given that we as a state are not benefitting from tech talent migration trends, we must focus on building our homegrown talent in order for Minnesota’s tech-enabled companies to compete.

This begins in K-12 education, which is why MnTech is such a strong advocate for creating a foundational blueprint⁴ to expand access to computer science education in high school. We will not be able to compete in an increasingly tech driven economy by being last in the nation in providing access to foundational computer science education.

An additional challenge that Minnesota companies face is the continued reliance on four-year degrees for hiring requirements, with 90% of tech job postings in the MSP metro area requiring a four-year degree. Compare this to top tech employers in the country like Microsoft, Google and Apple, all of which have been steadily decreasing their reliance on bachelor’s degrees by more than 15% just since 2017.⁵

Minnesota’s competitive advantage could benefit from decreasing reliance on a bachelor’s degree and instead turning to upskilling and reskilling talent to expand the pool of tech professionals.

Tech employers can also look to national leaders like Accenture and IBM, with less than 40% of their tech postings requiring four-year degrees, as examples of companies that have also invested heavily in apprenticeship programs to meet their growing tech employment needs. By relying on a combination of education and on-the-job training, both companies have found success in hiring apprentices for roles for which they previously required four-year degrees.

This strategy is not only helping to find talent faster, but also impacting companies’ bottom lines. According to Accenture, employers who invest in talent development see higher retention rates (5-7% increase), workforce engagement (15-20% increase), and a 10-20% decrease in talent acquisition costs.⁶ In fact, 94% of employees are more likely to remain with an employer over the long-term who invests in their career through skills development.⁷

The Minnesota Technology Association, through the Tech Inclusion Alliance, is working with employers in the MSP metro to expand the pool of digitally-skilled, employment-ready talent from historically overlooked and underrepresented populations, particularly those from the Black, Latinx, and Indigenous communities.

By creating new pathways for nontraditional tech talent, Minnesota companies can ensure they have access to the skilled workforce needed for continued business success while increasing their own job competitiveness in the Midwest and beyond.