Good News, Bad News for Austin Employment

Scott Francis
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The good news, unemployment has dropped to a recent low, of 6.5%:
Though the report showed a modest pace of job growth, there has been a string of recent announcements by companies planning to add jobs in Central Texas this year. They range from startups adding five or 10 jobs to Altera Corp. , a California chip design firm that plans to open an Austin design center this year and grow to several hundred workers in the next few years.
There really have been a lot of “hiring” announcements lately.  I never know exactly how seriously to take those announcements though (after all, what really matters is how many people companies *actually* hire). The bad news?
The region’s improving job picture is threatened, however, by proposed budget cuts at a number of school districts and state agencies. Government employment in the Austin area accounts for 173,500 jobs, more than any other sector, according to Workforce Commission figures.
The looming state budget cuts are expected to be severe, and are expected to have a significant impact on employment (including that of teachers). Meanwhile, at a recent CEO summit in Austin, hosted by the Austin Technology Council (ATC), there were complaints of a talent shortage:
“That only gets you so far,” Favaron said. “We need to import top people, not hire them away from each other. In the past, we’ve had companies like Tivoli and Trilogy that brought in hundreds and hundreds of highly talented people. Nobody’s doing that right now. Instead, we’re recycling people.” (Note: Rod Favaron was previously CEO of Lombardi, he is now CEO of Spredfast).
There’s some truth to that statement – we’ve had a lot of new talent injected into Austin via the college graduate ranks (thanks UT!), but we haven’t seen a company come along that is a net-importer of talent in the way that Trilogy, Tivoli, and Dell were in the 90’s.  Or perhaps the new up-and-comers (Home Away, Bazaarvoice, Solarwinds, etc.) are just going about talent-importing more quietly?  Too soon to tell. I think the message to Austin-based CEOs is clear: be prepared to pay a little more to get and keep the people you want on your team.

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