The massive tech industry downsizing across the U.S. offers opportunities for regions such as West Michigan to pursue highly coveted talent.
As tech giants including Google, Apple, Amazon, Twitter, Facebook, Zoom and others have shed thousands of jobs in the last year, The Right Place Inc. and Hello West Michigan have been targeting displaced tech workers with messages about moving here for a new opportunity. The efforts come as part of a strategy to grow the local tech sector as a key part of the region’s economy.
“We are trying to attract talent here all of the time. That’s what we’ve been doing for many years, but there’s definitely a very unique opportunity right now because of the tech layoffs,” said Rachel Gray, executive director for Hello West Michigan, which promotes the region as a talent destination and provides support for job seekers.
“We advertise West Michigan all of the time as a great place to live and work; that’s part of our marketing initiatives,” Gray said. “With these tech-sector layoffs … we can be pretty nimble with that advertising, so we pivoted pretty quickly to ‘how can we target these folks.’”
Using targeted social media ads since November, Hello West Michigan and The Right Place have sought to appeal directly to displaced tech workers. Their initial focus has been on people who have a connection to West Michigan and are potential “boomerangs,” or individuals who once lived here or visited the region and may be open to returning.
To help offset the comparatively lower wages tech workers earn locally compared to on the coasts, the organizations tout the region’s economic vibrancy, career opportunities, a good work-home life balance, high quality of life, and low cost of living.
Housing is one example of the cost of living differential.
In California, a home in the San Francisco Bay area had a median price of $1.08 million in December, according to data from the California Association of Realtors. Homes in the Los Angeles metro area had a median price of $716,500 at the end of last year.
By comparison, the average cost of an existing home in the Grand Rapids area was $338,631 at the end of 2022, according to the Grand Rapids Association of Realtors. In neighboring lakeshore markets, the average home price as of November 2022 was $318,945, according data from the Michigan Association of Realtors.
Appeals to tech workers who’ve been affected by layoffs come against the backdrop of a major initiative The Right Place launched last year to turn the Grand Rapids area into a technology and innovation hub over the next decade.
About 20 percent of the region’s employment is presently tied to manufacturing, while 5 percent are tech positions. The Right Place wants to grow tech jobs over 10 years to 10 percent of the employment base.
Success breeds success
In conducting outreach to displaced tech workers, Jennifer Wangler, vice president of technology at The Right Place, cites a 2022 study by Rocket Home that listed Grand Rapids at the top of a ranking of 15 cities that are the “best places to raise a family.”
That status can add to the region’s appeal, particularly to younger tech professionals, Wangler said.
The organizations’ outreach also focuses on the region’s growing tech sector and burgeoning entrepreneurial support network for anyone who may decide later on to form a startup to commercialize a technological innovation, Wangler said.
“Part of what we’re trying to do from a business development perspective is to create those opportunities for that young, vibrant talent, especially in the tech community, to be able to start their own company from their own technology,” she said.
Additionally, Hello West Michigan has heard from people in the last year who returned to the region and “are pleasantly surprised” at the vibrancy of the local tech sector and support, “so we are starting to see that attraction happening,” Wangler said.
If the ongoing outreach effort can bring tech workers back to the market, it can snowball, she said.
“Founders like to be where other founders are. There’s this thing called ‘knowledge spillover,’” Wangler said. “Once you start attracting a few, they talk, they share and you’ll just naturally encourage others to come into the area.”
Creating a cluster
Given the recent wave of layoffs that have displaced thousands of tech workers, Grand Valley State University economist Paul Isely believes the region can lure tech talent, and not just for tech companies. Every sector in the economy, regardless of company size or industry, needs tech workers, Isely said.
Yet Grand Rapids is far from alone in trying to appeal to people who recently lost their job at a tech giant. Isely cites an effort in Chicago where dozens of firms have said they will hire workers on H-1B visas to fill open tech positions.
“Chicago’s beating us to the punch pretty heavily with that,” Isely said.
Automakers also need many more tech workers as the industry electrifies. A recent Bloomberg story detailed how automakers last month used the Consumer Electronics Show in Las Vegas to scout for software engineers and other tech talent.
“There’s going to be competition for these workers,” said Isely, who serves as associate dean at the GVSU Seidman College of Business. “It’s an opportunity to pursue, but realize others are already on it, so if we don’t do it hard and fast, the opportunity will pass.”
Estimates peg the U.S. tech sector as shedding more than 100,000 jobs in the last year, and Isely expects “there’s going to be more belt-tightening … so more of those people will come loose.” West Michigan and the Midwest have a chance to lure some of those workers, especially to support the manufacturing sector, he said.
To sharpen the pitch, the region needs to create an “ecosystem” around tech support for manufacturing, similar to what’s evolved in Grand Rapids over the last two decades for the life sciences sector “where there is enough researchers to draw researchers,” Isely said.
“It’s drawing researchers here because there’s now people to work with and people they can leverage to get grants,” he said. “That interaction increases the probability of grants and increases the probability of convincing someone to come here.”
A matter of pay
To draw tech workers, employers will need to raise pay levels to better compete with other areas of the country and “pay them enough to convince them to come here, because they’re looking for jobs on the West Coast, too,” he said.
Touting the region’s quality of life and lower cost of living can resonate with displaced workers who are willing to relocate to the Midwest, especially younger Millennials and Generation Z members “who are really focused on that quality of life, and that quality of life has to do with things outside of work,” Isely said.
“The number one thing that we have to do is show people what we have,” he said. “We have the right amenity structure for somebody who’s coming from California. They’ll be surprised what we have here.”
Jen Bradshaw, owner of Paragon Recruiting, a Grand Haven-based tech worker placement firm, said tech companies have been increasing wages to better compete for talent and “to make working here in West Michigan a little more appealing.”
One potential for the region is to convince people to live in West Michigan and work remotely for a tech company on the West Coast, Bradshaw said. That allows them to earn higher West Coast wages with a Midwest coast of living.
Given the wave of tech layoffs that are expected to continue, those individuals may prove more willing to look locally or closer to home for work if they get displaced, Bradshaw said.
“It may benefit Michigan in terms of being able to lure them back into our West Michigan-based companies,” Bradshaw said. “They’ve been paid California wages sitting in West Michigan, which I always thought was a problem for our West Michigan companies, but if they’re getting laid off, it may bring some West Michigan folks back down to Earth in terms of salary and come back to work for companies in the West Michigan area.”