Why tech talent is in the process of abandoning Austin

“Nothing’s keeping me here” is a phrase we keep hearing around town. Being in the center of the tech space, we’ve been able to keep my finger on the pulse, and what we thought was primarily housing that is driving folks out of town turns out to be far more insurmountable than we could have ever imagined.

A perfect storm is brewing as the housing market collides with a dramatically transformed workforce that has become accustomed to working remotely and shifted priorities.

Last time Austin was bleeding talent, the year was 2011 and most investments were focused on early stage startups and there weren’t enough open roles that were senior level, so we started losing people to competitive markets. In response, we built a massive employment hub (the Austin Digital Jobs Group (ADJ)) and volunteered hundreds of hours to help make Austin a magnet for high quality employers.

This time around, we expressed to the Group of over 55K members that we were frustrated that people were confiding in us that they were leaving (or considering it). Some are even people that we all imagined to be part of the very fabric of Austin tech. We feel helpless this time.

Many of these talented people said that the soaring housing prices in Austin had them eyeballing smaller towns in Texas, or worse, their hometowns outside of the state. There are only so many times you can try to buy a house, get rejected, or get outbid on 22 homes before you start looking at other places. Only so many people will accept a billion percent rent increase at renewal time before thinking that going back home to Louisiana’s lookin’ pretty good.

This week, Austin CultureMap reported that Austin now ranks number two among the most overvalued home markets in America.

Tesla is getting ready to open their Gigafactory, Oracle is moving their headquarters to Austin, and Samsung is currently trying to get buy-in from city officials in Taylor so they can build their mega plant near Austin. Home investors and firms from all over are salivating.

It all feels both exciting, yet overwhelming when you’re going to buy a house here, only to get outbid by $150K over asking price from an investor in California. It’s been demoralizing for so many.

Because we also own a massive real estate publication, we’re firmly in touch with that sector, and brokers in Austin are telling us that the summer was out of control and overheated, but they’re already seeing that hyper-activity slow a bit.

Housing alone isn’t enough of a reason for an entire sector to be packing up or dreaming of leaving. So what gives?

At last count, a thread in ADJ on this topic is at 806 comments, and I personally received several hundred more via direct message with people in tech explaining why they’re leaving or considering leaving.

There are challenges within the city limits of Austin that have bubbled over like crime and separately, the contentious issue of houselessness – it’s an ongoing and very serious issue that has people leaving downtown, but not necessarily leaving the surrounding areas.

So if housing isn’t the exclusive driving force, how has that problem combined with the employment market shifts? How has the job market changed in such a way that talent is ready to hit the eject button on this town? It boils down to a changing talent pool, fractures in the hiring process, a shift in priorities, and a lingering brokenness in the entire process that is exacerbating all other conditions.

Let’s dig into that further.

Because of the global pandemic, remote work has become a staple in the tech industry, teams adjusted and realized the office is more of a luxury than a requirement, and many large brands swear that they’ll never require their employees to come into the office again.

For that reason, tech workers’ expectations have been forever changed. Fully remote options will drive the market for years to come, and hybrid options or flex work hours will also be how large tech firms attract and retain talent – ping pong tables and chill vibes will be less of an appealing sales pitch.

The pandemic has also shifted the talent pool to include everyone in America – if all workers are remote, employers no longer have to look just to the local workforce. This talent pool expansion is a double-edged sword – if an Austin tech company can look to Nebraska for workers, then remote workers can look outside of Austin to other budding tech hubs, potentially shifting the entire environment. That’s the main driver for Austin brands continuing to hire in Austin, lest the entire ecosystem fail.

All that said, a disconnect in the job market in Austin tech remains. Holdouts from attitudes and old systems of the past linger on.

A theme we continue to hear from high quality candidates is that employers have increasingly unrealistic expectations. You already know the stereotype of job listings that say they’re entry level but require a decade of work experience. But as budgets tightened in the face of uncertainty, Austin tech companies are becoming phenomenally great at hiring someone to do three jobs that pay less than one. One of our Group members asserted that employers are looking for turnkey employees. It used to be that employer job descriptions were a realistic wish list and that if you hit over 60% of them, you might get an interview. Now people believe that the requirements are becoming unrealistic and if you meet less than 100% of them, there is zero chance of an interview. Many have complained that hiring managers and recruiters continue to not be aligned, slowing the process repeatedly.

The timing of the acceleration of unrealistic expectations has locals feeling like the pandemic created conditions that allowed for employers to take advantage of job seekers who must be desperate since the world is upside down. I don’t personally believe this has anything to do with the pandemic, rather it is a continuation of an ongoing trend.

If you think this is an exaggeration, just this week a job seeker let me know that a recruiter sent them a job description that required the “ability to code in any language.” WTF. The recruiter was serious. Try telling me this isn’t out of control and I will laugh right in your face, friend.

Another serious point of contention in Austin is that salary levels are not increasing anywhere near the skyrocketing living expenses.

Many believe the salary levels are a decade old and simply can’t keep up with the market conditions in Austin and while we’ll leave the “you are a remote worker, you shouldn’t earn as much since you moved to a less expensive locale” debate to another day, we will firmly assert that this problem will hold back the tech innovation and the overall economy in Austin.

In that massive thread in our Group, one member asked, “So I guess a question is: do we accept the idea that Austin is now only for those making 6 figures??”

What is so disheartening about the salary conditions is that changing this couldn’t possibly be done overnight – it requires time and structural changes, and the bigger a company is, the slower it is to turn the proverbial ship.

Meanwhile, numerous people retired early during the pandemic, or began freelancing or consulting full time. Many of these people aren’t likely to return to the workforce under current conditions, and they feel like they have less roots in Austin – they can live anywhere now. See how remote work has caused a ripple effect?

Do you remember when some tech executives in Austin reluctantly sent employees home as the pandemic hit, flippantly warning that it wouldn’t be a coronacation!? Bad behaviors like this and other employee treatment during the pandemic haven’t and will not be forgotten – the memories will remain as fresh as the time you got shoved by that bully in elementary school. You may have forgiven, but you’ll never forget. Trust has been broken.

Trust was also broken during the pandemic when people lost what they believed to be stable jobs. It has created a certain trepidation in the marketplace.

The pandemic has forever altered all of our lives as individuals. Thousands died from COVID-19, and those of us left behind lost loved ones. We were all sent home with no job security. Many of us became homeschool teachers and somehow also had to keep up with our careers. We were forced to share spaces with our partners, our children, our parents, our family.

Some would think all of this is a recipe for resentment, but in the majority of cases, what has happened is a serious shift in priorities to favor the family, to appreciate quality time, to find solace in more quiet time and a less full calendar.

People tell us they don’t intend on going out for drinks after work when they’re called back into the office – it turns out we actually like our kids or partners now that we’ve gotten to know them, or that we value our newfound connection to old hobbies. The priorities aren’t fleeting – this pandemic has changed us.

Because of this fundamental change in who we are, ongoing problems in the employment market are now magnified.

“Isms” still plague the hiring process. Ageism continues to be a very serious problem in Austin tech, for example. People tell us that they’re still experiencing sexism, racism, ableism, and every other sort of discrimination. In 2021. It’s unbelievable. You can say all of that is simply perception, but in this scenario, perception truly is reality. And because our priorities have shifted, our giveashitters are pretty low when it comes to tolerating bad actors.

That same shift has also lowered tolerance levels for burnout. One member in the Group pointed out that after the market crash in 2008, resource levels were depleted – and here we are in 2021, they haven’t been restored. People were burned out before the pandemic, and now they’re moving to the country to work remotely and begin healing this burnout that is coming to a head.

It’s difficult to deal with ghosting (be it computer-aided or overworked recruiters) when you’re already burned out and thinking you’re the only one. It’s giving this sector a terrible reputation that is spreading.

Resources aren’t the only factor here that is stuck in 2008. Companies were so used to getting a flood of applications for every single job listing, their ATS (applicant tracking system) filters were implemented accordingly. The volume of applications has dropped, yet the filters remain overly restrictive. They put their ATS on auto-pilot once upon a time, and it remains that way, yet they continue to reach out to us in confusion, asking us where all the applicants are.

In the eyes of tech talent, the hiring process has deteriorated. Simultaneously, in the eyes of companies hiring, the process has been improved. Enhanced.

The disconnect here is not in the unrealistic expectations previously outlined, or the rising opacity in salaries, but in the actual mechanics of the hiring process. Even smaller companies have added additional rounds of interviews and ridiculous red tape in what is an effort in vain to compete with the Googles of the world. There’s a lot of what I would call “playing office” going on, with non-technical hiring managers hiring for technical roles, or unrelated staff being roped into panel interviews to weigh in on whether or not someone is a “culture fit.”

The process has become lengthy and demanding with endless personality tests, whiteboard tests, Zoom calls, questionnaires, more phone and video calls, aptitude tests, and so forth. Most people have come to accept these as hoops to jump through, but the practice of having job seekers do extensive unpaid projects as part of their job application is creating deep resentment and a growing resistance. No one expects to shake a hand and get a job today, but doing a 12 hour assignment that is due in 24 hours is unreasonable, especially unpaid and with no promise of their intellectual property being protected.

It started off as a way to aide candidates into demonstrating their true skills and it was simple. But over time, the practice has “evolved.” It feels to some like every Austin tech recruiter and hiring manager went to some evil underground conference a few years ago and were brainwashed into thinking that if they ALL assign abusive tasks, no one in the sector will notice because they’ll just accept that it’s “how things are done now.” But that’s not happening and the overly complicated process combined with other market factors is driving seriously qualified tech talent out of Austin.

The hiring process has continued to degrade and for no good reason. We actually built ADJ in a way that would directly connect hiring manager and job seeker, promoting the concept of simplifying the hiring process. Yet here we are.

The final nail in the coffin is that candidates and employers are blaming each other for a power imbalance, and thinking that their situation is unique. A feeling of isolation is growing due to peoples’ inability to openly discuss this process – both hiring folks and job seekers.

The bottom line is that numerous market conditions have converged to create a scenario where people are tired and simply won’t settle anymore. Expectations have changed. And we have changed as people.

We will inevitably get hate mail because of this editorial and folks will say that the very publication of this piece will push people out of town, but we would argue that if no one makes an effort to diagnose the growing illness, it will metastasize.

This editorial was first published here on September 09, 2021.