In The Lead: Retaining talent the new challenge for Pittsburgh area companies
May 15, 2014 7:33 AM
Carnegie Mellon student Kevin Louie takes a picture of fellow students Dan Kelley, Dale Zhang and Mahir Kothari interacting with a 3D chalk drawing on the sidewalk outside of the Carnegie Mellon University Center.
By Deborah M. Todd / Pittsburgh Post-Gazette
Pittsburgh's majority salt-and-pepper haired population is making way for a migration of tech-savvy Gen Y'ers looking to start careers. But with a recent study ranking the region at the bottom of the heap in terms of talent retention, the question is how long will they stick around?
"Pittsburgh's Creative Clusters: What could Pittsburgh look like in 2020?" gives a comprehensive breakdown of demographics surrounding workers in communications, design, entertainment, fine arts, software/hardware, data science and creative industry support services.
Among the highlights of the report is that the city is expected to jump from an estimated 176,940 workers today to more than 200,000 once the next decade begins.
The report was commissioned by the Pittsburgh Technology Council, Carnegie Mellon University, Dollar Bank and the Claude Worthington Benedum Foundation with Allison Park business and data science consulting firm Echo Strategies.
At the Allegheny Conference on Community Development's talent recruitment site ImaginePittsburgh, evidence of that jump is already being seen. More than half of the 20,000 job openings posted to the site require some form of tech experience.
However, with the report ranking the region's talent retention efforts at 19th out of 20 benchmarked cities, it's hard to say just how far the bump in jobs will bump the regional population and economy.
One thing made clear in recent reports: drawing talent in hasn't been the issue. Over the past eight years, Pittsburgh has torpedoed past eight comparable Midwestern cities when it comes to attracting the all-important 25- to 34-year-old demographic, according to a March Business Insider report.
A breakdown of American Community Survey data showed that Pittsburgh saw a 12.4 percent increase in the number of 25- to 34-year olds during the period — an increase more than four percentage points higher than the national average and bested only by a 12.7 percent increase in the Minneapolis/St. Paul region.
With the young transplants accounting for 6.257 percent of the region's overall population increase — compared to 1.411 percent of the Minneapolis/St. Paul increase — Pittsburgh's infusion of young adults had the greatest impact among the cities studied.
In addition to youth, the Steel City has also spent the last decade bringing in the brains.
Jim Futrell, Allegheny Conference vice president of market research and analysis, said that between 2000 and 2012, the county has seen the number of 25- to 34-year olds with graduate degrees spike 51 percent. The region now has a higher proportion of college-educated young people than the national average.
Mr. Futrell partially credited the region's emerging tech workforce for the shift, but he said efforts to fold students into the community have gone a long way toward changing cultural perceptions of the region.
"When I started this position 12 years ago, a lot of the talk was that students come to the region, spend four years at Pitt or CMU and never leave Oakland," he said. "Now I see the focus that has been put on changing that. With universities giving students Port Authority access to make them more aware of opportunities in the city, the Penguins' college night promotions, all that has combined to help better connect college students to the community so now they're more aware of what the city has to offer."
The economic tide that swept legions of post-collegiate job-seekers out of Pittsburgh for nearly three decades is finally turning in the region's favor. And residents can only expect the flow of young job-seekers to increase.
But Pittsburgh Technology Council president Audrey Russo believes the projections give a somewhat false sense of security in a region that needs to do all it can to keep creative workers on local payrolls.
Ms. Russo said the Creative Industries report largely credits the future increase in creative class workers to non-creative companies, such as law firms and hospitals adding positions for information technology managers, mobile software developers and other technology-related positions.
And while more tech and creative positions are expected in coming years, she said there may not be enough in the short-term to hold on to top-tier university students.
"We have a large number of university graduates, so really the issue is we have a surplus of graduates — many of whom are from elite schools — and not enough entry-level job opportunities," she said.
Even with newly created entry-level positions, the region could still lose its emerging creative class workers without mid-career and executive jobs for them to transition into, said Mr. Futrell.
He and Meredith Fahey, Allegheny Conference project director who heads talent attraction organization ImaginePittsburgh, said the organization shifted directions in January 2013 because regional employers were having difficulty finding experienced employees between ages 38 and 45 to fill C-level executive positions.
Today, the ImaginePitsburgh website highlights the region's career advancement opportunities, affordable housing, public schools, and arts and cultural events designed to attract up-and-coming singles and new families. One of the most important features is a cost-of-living calculator that lets people know just how much bang someone could get for their paycheck in Pittsburgh versus their current city.
Promoting just how far a dollar can stretch is a more solid bet than some might realize, particularly when candidates can be discouraged by the region's relatively low wages, said Bobby Zappala, founder of East Liberty-based startup accelerator Thrill Mill.
The Creative Clusters study ranked Pittsburgh's average creative sector wage of $43,561 per year at 15th out of 20.
However, with Pittsburgh's annual composite cost-of-living index — which accounts for the average monthly rents and housing costs, transportation costs and expenses associated with average price levels for consumer goods and services — ranking the third lowest among an index of 15 metropolitan areas, according to regional data analysis organization Pittsburgh Today, lower wages don't equal a lower quality of life.
"I have friends in New York who make a million dollars a year but can't buy a house," Mr. Zappala said.
In addition, recent efforts to help newcomers break into traditionally tight inner social circles have been critical, said Ms. Fahey.
Initiatives such as dinners for newcomers hosted by Vibrant Pittsburgh's Welcome Center; Pittsburgh Urban Magnet Project's adult sport teams and civic engagement initiatives; and ImaginePittsburgh's own Imagine Neighbors program, which connects longtime residents with newcomers in their neighborhood, have all helped to break open a social scene formerly known for a degree of insulation.
For Branden Ballard, president of the Urban League Young Professionals of Pittsburgh, making after-hours connections is one of the greatest factors surrounding whether Pittsburgh becomes home or a launching pad for incoming residents.
Over the course of seven years, Mr. Ballard said a 70/30 ratio in favor of Pittsburgh residents joining the organization versus newcomers has flipped, with 70 percent of today's members coming from out of town. While most of the newcomers build friendships and relationships through the membership, those who fail to fall into a social circle are usually off to a new city within a few years.
"Pittsburgh can do a much better job of marketing things that are going on because, unless a person finds a certain circle of people who are in the know, they will not know what's going on," he said.
Those who do find kindred spirits in the region are far more likely to stick around, according to a recent survey conducted as part of Pittsburgh Urban Magnet Project's strategic plan. The survey of more than 1,000 25- to 34-year-old members showed that half of respondents are somewhat committed to staying in the region and that 44 percent were solidly committed to laying down roots, said CEO Brian Magee.
Although a glaring lack of diversity in the Pittsburgh region that earned the bottom rank in the Creative Industries report is still a barrier to attraction, ongoing economic and social progress has given stakeholders an image to sell that goes beyond a past steeped in steel.
"This is not your grandfather or grandmother's Pittsburgh," said Allegheny Conference spokesman Philip Cynar.
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