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Utah losing fight to keep high-tech degree holders in-state, according to new report

SALT LAKE CITY — Utah's tech-o-polis is continuing its high-performance growth cycle, but a new report finds while the rate of imported tech employees is keeping about even with those we export, the state is losing the fight to keep the best educated homegrown talent here.

And the simple answer as to why may just boil down to money.

On Tuesday, the Utah Department of Workforce Services released a report focused on one of the tech industry's core occupations — computer coding. Industry experts say data gathered in the report is overwhelmingly positive and the education disparity between those who move to Utah to work in tech, versus those who leave Utah to work in tech, isn't a red flag yet, but should be monitored.

But compensation for tech industry professionals, while helping power Utah's surging economy, isn't keeping up with wages in other locales with booming tech sectors.

Heather Tuttle

"In the end, even with the cost-of-living adjustment, some of the other cities with a big tech presence are just doing better than we are," said Mark Knold, the Utah Department of Workforce Services' supervising economist. "The higher wages come with more purchasing power."

The average Utah tech worker is earning nearly double the $46,000 average that non-tech employees earn, but from the outside looking in, Beehive State tech salaries are lagging.

The Department of Workforce Service report notes that Utah tech wages are simply not holding their own, even when adjusted for cost-of-living differences, against what can be earned in other markets like San Francisco and San Jose in California; Raleigh, North Carolina; Austin, Texas; Seattle; or New York.

One example: A tech worker in Utah with a science-focused degree is likely to accumulate about $92,000 in annual purchasing power, whereas, after adjustments, a similar professional in Raleigh will have over $110,000 each year to spend, and a Seattle-based analog would be enjoying over $126,000.

"Salt Lake/Provo wages rank low in nearly every education category when placed against our comparative areas," the report reads. "(Data) suggests that greater compensation for higher-educated IT workers is often found elsewhere."

While Utah is currently losing the wage game, Knold, who's been crunching numbers on the state's tech industries for almost 30 years, doesn't see it as a major red flag, though he does believe a wage increase could help close the gap on the current 5,000 unfilled tech openings in the state.

"It's not an epidemic or a situation where we see a need to change the model," Knold said. "The tech industry is growing faster, 5 or 6 percent, than most other industries in the state. Obviously, there's great success there, but it could be the case that the growth could be even bigger, with a smaller gap in the labor market."

Utah Technology Council CEO John Knotwell, whose trade group assisted in reviewing the report, said the findings are, overall, very encouraging. He said there's been a feeling among tech community leaders that Utah was performing very poorly in terms of the in-migration versus out-migration equation.

"I think if I were to characterize my reaction, it's that we're doing much better than we thought," Knotwell said. "The general feeling has been that we were losing the battle to keep, and attract, tech professionals to the state."

Knotwell said the education imbalance in outbound tech workers was a data point worthy of keeping an eye on, but suggested it may simply be a matter of market-based differences with other areas.

"I think we'd be foolish if we said it wasn't concerning to us," Knotwell said. "But, I think it may also reflect the relative maturity levels of tech ecosystems in other locations compared to Utah's."

While those with tech degrees can likely find higher fiscal rewards outside the state, the department's report also highlighted how well Utah tech workers without four-year degrees are doing. Also, those with certificates or associate-level degrees represent a larger segment of the Utah's tech sector employment base than in other markets.

"Most places see about 70 percent of their IT sector with bachelor's or higher degrees," Knold said. "Here in Utah, we're at about 50-50 between bachelor's or better and those with less than a four-year degree."

And those additional entry points are a net positive both for the continued work to bridge Utah's gap between industry needs and the labor market, and having positive impacts on the state's wage growth.

"Not every high school grad is college degree-bound," Knold said. "In the state of Utah, this is a high-paying industry, and these opportunities to get into the industry without having to reach a bachelor's degree level of education is a very positive thing."

Both Knold and Knotwell agree the state's multiple efforts to build interest and engagement in the education pipeline leading to science, technology, engineering and math (STEM) certificates and degrees is essential to maintaining the tech sector's vibrance.

"This report provides an excellent evaluative opportunity for us to assess what we're doing right and what we need to improve upon," Knotwell said. "Seeing that more of our talent is staying in-state than we expected is great news and, obviously, there is also data here that shows the work is ongoing.

"Utah tech is thriving and we're going to keep the pedal-to-the-metal on continuing its growth."