Pave Data Lab
Tracking The Rise Of The Distributed Workforce
Recent hiring is up across all tier 1 metro areas, not just San Fransisco
Tech is decentralizing its hiring practices.
According to CEOs from Bay Area behemoths like Stripe and Coinbase, new hires are now coming overwhelmingly from outside the San Francisco metro area.
How widespread is this phenomenon?
We took a look at compensation benchmarking data from the past year to watch the rise of the distributed workforce in real time.
Bay Area Companies Increasingly Hire From Outside San Francisco
To analyze this shift across hundreds of employers, we isolated a subset of companies, each with more than half of its workforce based in the San Francisco metro area as of six months ago. Then, we looked at our latest data from February 2022 to compare the composition of this workforce sample over time.
The shift toward distributed hiring is rapidly reshaping the companies.
Our findings show that, while the average company in our sample was 28% distributed in August of last year, just six months later, that share rose roughly seven percentage points to 35%.
Furthermore, this figure doesn’t account for remote workers within the San Francisco metro area, who, in some cases, may be teleworking from around the corner or, in others, temporarily relocated continents away. Regardless, the decentralized hiring trend has been redefining the Bay Area workforce over the last six months.
Larger Companies Are Making The Shift Faster
As Bay Area companies contemplate the composition of their own teams, it can also be helpful to consider how company size factors into the shift toward a distributed workforce.
For this analysis, a larger company is defined as having 25 or more employees, while smaller companies are those with less than 25 employees.
From February to August of last year, just over 30% of new hires at larger companies were based outside the San Francisco metro area.
Looking at the most recent six months, that number has risen more than 10 percentage points, and 41% of new hires at larger companies are now distributed.
Smaller companies are both less distributed and also shifting more slowly.
Distributed workers as a share of new hires rose to 31% at small companies over the past 6 months, compared to 24% during the six months prior.
However if these companies continue to grow in the current job market, they may face pressure to further accelerate their distributed hiring.
Seattle Hiring Growing Fastest Among Top Tier Metros
Even though San Francisco companies are becoming more distributed, recent hiring is up across all tier 1 metro areas.
In New York City, hiring has grown the least, perhaps in part because it is a perpetually hot market.
The rate of NYC new hires over the past six months was up by only 3% relative to the prior six months. Seattle, on the other hand, has seen more of a boom with new hires growing by 28% during the same period.
As hiring continues to accelerate, compensation benchmarking data can help to decipher emerging trends across multiple geographies in real time.