What happened: New rankings reveal Vancouver’s status as a tech hub in North America
Why it matters: The results come as future of remote working upends how operating costs are calculated for most tech firms
Vancouver has the mountains, the ocean and the craft beer, but not the salaries.
New rankings from CBRE Group Inc. reveal only Montreal tech workers are paid lower on average than those in Metro Vancouver based on 50 North American tech hubs evaluated.
The 2020 Scoring Tech Talent report found average tech salaries in the region stood at US$61,760 (C$83,600) — less than half of what tech workers earn annually in top-ranked San Francisco Bay Area at US$136,060 (C$184,103).
But the CBRE report, released July 15, also offered overall rankings based on cities’ competitive advantages, and appeal to workers and employers.
Metro Vancouver remained static compared with last year, ranking No. 12 out of 50 (the region had surged 13 spots in the annual rankings a year earlier).
Baltimore (No. 11) ranked directly above, while Dallas-Fort Worth (No. 13) ranked directly below.
Toronto ranked No. 4 among tech hubs in North America, down one spot from a year ago.
The report broke down employment into two categories: dedicated technology occupations (software developers, computer support, engineering, etc.) and non-tech support staff (sales, admin, business operations, etc.) employed by tech companies.
Overall, the number of tech workers in the region grew to 84,900, up from the 74,700 working in the market a year earlier.
CBRE found wages for dedicated tech workers in Metro Vancouver averaged US$81,931 (C$110,883) annually, while non-tech staff earned US$56,940 (C$77,061) on average.
Based on average rent, tech wages, support wages for non-tech workers and management wages, the report found Vancouver to be the second-cheapest city in which to operate among the 50 examined.
The report estimated if a tech firm employing 500 people and occupying 75,000 square feet of office space were to operate in Vancouver, it would cost the company US$30.6 million (C$41.4 million) annually compared with US$62 million annually (C$84 million) in the San Francisco Bay Area.
Montreal (US$30.2 million/C$40.9 million) was the only city cheaper than Vancouver.
Toronto (US$31.4 million/C$42.5 million) ranked directly above Vancouver.
The report partially attributed the low ranking of the three Canadian cities to the low value of the loonie.
The rankings come at an uncertain time for the future of the tech sector as the pandemic shakes up how businesses approach remote working.
Canadian tech giant Shopify Inc. (TSX:SHOP) had announced plans in January for a 1,000-person office in Vancouver before reversing course in May with the West Coast office now slated to serve as a “recruitment hub” for the company as the workforce goes remote.
In a tweet, CEO Tobi Lutke said his company would be keeping its offices closed until 2021, “and after that, most will permanently work remotely. Office centricity is over.”
U.S. firms such as Mastercard Inc. (NYSE:MA), Tipalti Inc., Grammarly Inc. and Amazon.com Inc. (Nasdaq:AMZN), which announced plans to expand in Vancouver prior to the pandemic, have all said those plans have not changed.
The CBRE report, compiled amidst the pandemic, concluded Vancouver’s 3.7% office vacancy rate was the lowest among the 50 regions evaluated.