Dissecting San Antonio’s slow growth in technology jobs

Down on Houston Street, TechBloc CEO David Heard spent Thursday evening with industry advocates “lamenting the lack of progress on the job fronts.”

They discussed ways of steering the San Antonio City Council into “thinking about not just equity and redistribution of resources” but creating new pathways into high-paying jobs — a message they think would resonate but that’s too rarely heard.

“One of the advantages of being in a smaller community is it would seem easier to have a unified message,” Heard said. “So far, we’re not necessarily deserving of high marks on that front.”

The discussions come after Greater: SATX, the regional economic development agency, published its third-quarter report showing slow tech and cyber job creation in the San Antonio area.

“We’ve seen 6% growth in the industry since 2015, while the nation has seen 19% and Austin has seen 48% growth over the same period,” the report says. The term “growth” indicates the number of jobs created locally.

It was a bit of a wake-up call for some in the city’s tech sector.

“We do such a good job celebrating our wins, we’ve got maybe a lack of awareness that we’re not in a strong position relative to our peers,” Heard said.

Encouraging findings

Romanita Matta-Barrera, chief workforce officer at Greater: SATX, said that despite slow job creation in tech industries, the data show some signs of stability. However, she noted employers shared difficulties hiring mid-level workers.

Despite the cloudy figures and feedback, she said she’s optimistic.

Among the encouraging findings she highlighted is an uptick in students receiving tech degrees at the University of Austin at San Antonio, for example.

Tech and cyber program completions — the number of two- and four-year college degrees and certifications earned in the industries — are up 43 percent since 2015, the report found. That tops the national average of 41 percent, but in San Antonio they have not consistently increased year over year. Nationwide, progress has been steadier.

By volume, San Antonio had about 1,500 completions in 2020. That was a respectable showing compared with 1,900 in Austin.

But while the educational progress is encouraging, employers are telling Greater: SATX the training courses aren’t producing the workers they need to fill many existing positions.

“Most area training courses are focused on entry-level development, but entry-level jobs are not as readily available,” the report said.

Marketing, labor

For some time, TechBloc board members have been comparing San Antonio’s efforts with those in Tulsa, Okla., Kansas City, Mo., and Boise, Idaho — cities also fighting to generate momentum.

They say local leaders haven’t come to terms with how to market the city as a cyber and tech hub and point to tactics like those used by the city of Miami, which posted billboards this year in San Francisco to advertise tech jobs, or the city of Tulsa, which last year was offering remote workers $10,000 relocation grants.

Janie Gonzalez, CEO of San Antonio-based Webhead, said she’s long opposed localized marketing efforts that cast San Antonio as a player in this or that new technology to generate job growth.

“We jump on the bandwagon of everything and we need to keep our marketing simple and broad enough so if something shifts we don’t have to shift,” said Gonzalez, who founded one of the city’s first internet companies in 1994 and grew it into a major defense contractor. “We were Military USA, then Cybersecurity USA ... The constant need to rebrand based on the latest demand for careers has not been smart.”

The city is now in the position “to have the tech muscle to support Fortune 500s and government associations,” such as H-E-B and the Air Force, she said. And that identity comes only if the city and the local tech companies can adapt to the latest technologies in cloud-computing, for example.

“There needs to be more concentration in upscaling and retaining talents and less on the marketing of it,” she said. “San Antonio needs to do a better job highlighting our ability to upscale the workforce and sustain top technology stacks instead of backing ourselves into the corner by becoming anything and everything.”

San Antonio’s place

Lew Moorman, co-founder and chairman of TechBloc and co-founder of Scaleworks, a local venture equity firm, said he doesn’t bother comparing San Antonio with the state’s largest cities.

Austin, for example, is just a different animal. That city houses Oracle, a computer software giant, and just welcomed Tesla as the electric vehicle manufacturer moved from Palo Alto, Calif.

Austin has built “critical mass,” he said, referring to a clustering of companies and startups attracting large businesses and, as result, being able to recruit more new companies and workers.

“Cities that want that have to fight for critical mass of dynamic, high-growth companies and entrepreneurs that really create excitement,” Moorman said. “It doesn’t seem to be a priority here.”

Bret Piatt, CEO of Jungledisk, a local cloud-based data protection and cybersecurity company, noted that metro San Antonio isn’t adding headquarters locations at the rate of the Dallas metro. And though Austin hasn’t added many corporate headquarters either, it has added secondary space for Google and Facebook.

The slower job growth makes it tougher for some companies to hire.

New Braunfels-based TaskUs, which provides services to Facebook, Netflix, Zoom and Uber, said San Antonio has been hit particularly hard by the national labor shortage in tech amid the pandemic.

“As a local employer, TaskUs has overcome hiring challenges by embracing the post-pandemic world: leveraging a flexible remote work setup and empowering employees with unique benefits and resources,” Allison Kaplan, the company’s vice president of global corporate talent acquisition, said in an email.

Moorman, a former president of Rackspace, said the cloud-computing company served as “a start of a cluster” in San Antonio in 1998. But the business is no longer growing locally.

In July, it announced an “internal restructuring plan” and cut 700 employees, or 10 percent, of its global workforce. At least half of the Rackers cut were based out of the Windcrest headquarters in San Antonio. Since then, Rackspace has reported difficulty retaining employees in the region.

“Like others in our industry, we are realizing higher than historical levels of voluntary attrition,” the company wrote in a third quarter filing with the U.S. Securities Exchange Commission. “As a result, we are accelerating our best shoring efforts and expanding the geographic reach of our recruiting pool.”

Rackspace spokeswoman Natalie Silva said in an email the company had been “experiencing attrition that is higher than last year, but in line with or lower than many of our competitors.”

Rackspace is still a top tech company in the region. H-E-B and USAA also are among the select few, as the grocery and financial services companies have been investing heavily in digital.

Piatt said San Antonio “is doing a good job on quality of place, being a city that people want to live in and enjoy living in.” He added: “As an employer, it’s step one for me to build a culture and mission for people to be excited to come work for us.”

In the meantime, Moorman said San Antonio would continue reaping the benefits from the rapid growth of Austin in recruiting spillover workers and new residents without suffering from the growing pains Austin faces as it heads toward becoming one of the least affordable cities for homebuyers in the U.S.

Moorman likened the geographic relationship that of Portland welcoming Seattle’s overflow during its tech boom in the 1990s.

“San Antonio is benefiting from Austin,” he said. “If Austin wasn’t nearby, we’d be trailing even more.”

eric.killelea@express-news.net

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