With our recent expansion to the Philadelphia market, we’re excited to see things hopping over here in the City of Brotherly Love. In order to better understand the challenges local organizations are facing when hiring tech professionals, we make a point to keep a finger on the pulse of the area’s IT scene. Here are some of the trends we’ve been seeing in IT employment in Philadelphia.
Philly’s Tech Startup Scene
The number of Philadelphia tech startups has grown exponentially in recent years. This active growth has been driven in part by initiatives such as StartupPHL, a collaboration between the City of Philadelphia’s Department of Commerce and the public-private development corporation PIDC. The StartupPHL initiative aims to “be the gateway to Philly Tech,” driving innovation and entrepreneurship in the area.
The startup scene is further aided by massive growth in investment. A study by investment management firm JLL found that Philadelphia companies raised about $118 million in venture capital funds between 3rdQ 2013 and 2ndQ 2014, a healthy amount. But just a year later, the venture monies raised jumped to $203 million between the same quarters.
The vice president and director of research for JLL’s Philadelphia office called the increase a “pretty big jump,” noting that tech in Philadelphia “might not be firmly established or going gangbusters like San Francisco or New York, but the trend demonstrates an expanding community and opportunity for investment.”
Plenty of Tech Growth in the ‘Burbs
While the tech scene increases its presence in the downtown area, there’s actually even more action in the suburbs, particularly in Bucks and Montgomery counties. Several companies are purposely choosing the Philadelphia area over Silicon Valley or New York for the area’s educated workforce, relatively low cost of living and the many amenities (nightlife, history, recreational opportunities, etc.) that are within the city itself or just one or two hours away.
All in all, more than 6,000 tech companies call the region home, employing about 90,000 people, and it’s apparent that recruiting those people is getting more and more competitive.
Overall IT Employment in Philadelphia
The U.S. Bureau of Labor Statistics reports that the rate of employment growth overall in the greater Philadelphia area was up 2.6 percent as of May, a rate higher than the national employment growth rate of 1.7 percent. In fact, the region hasn’t had a decline in year-over-year employment in more than five years.
Employment in Philadelphia in the professional and business services employment sector – in which the Bureau of Labor Services places information technology – saw a 4.6 percent employment growth. This bodes well for tech pros and companies alike, promising a sustained supply of talent and a consistent demand for jobseekers.
Tech Salary Growth
Growing demand inevitably leads to more competitive wages. Several IT positions have seen their salaries increase by 6 percent or more since 2015 with DevOps/SDN workers pocketing an extra 6-8 percent ($165,000), mobile quality assurance pros earning salaries of $120,000 (6 percent increase), Peoplesoft administrators/developers receiving $152,000 a year (also a 6 percent increase), while Ruby on Rails developers can bring in $169,000 (an increase of 7 percent).
CTOs and CIOs are faring even better, seeing a 9 percent increase in their salaries, earning as much as $265,000 a year. One factor in the 9 percent jump between last year and now is the increasing competition among companies for great IT candidates, both those within the C-suite and “in the trenches.” As the gap between IT supply and demand widens, salaries will rise more quickly than they do in other job sectors.