Given the options of two coders working remotely — one who happened to live in Minnesota and one from at least a plane ride away — one local tech CEO would hire the in-state talent, for sure.
"But unfortunately," said Dean Hager of Minneapolis-based software company Jamf, "we're in the situation where we don't necessarily get to have that choice."
In the next 10 years, Minnesota businesses will have to fill 81,000 tech jobs, including 45,000 in the next five years, vacancies mostly from retirements and job changes to other states, according to the Minnesota Technology Association (MTA). In that same span, there will be an additional 6,500 IT jobs.
Minnesota projects to produce only 6,600 new tech workers by 2032, not nearly enough to address all the positions.
Jamf — which provides Apple device management and security functions — has 2,700 employees around the world with as many as 30% working in tech.
"It's agonizing to find tech talent in today's economy," Hager said. "There are far more jobs open requiring tech talent, than there are people to fill those jobs. And I think that is true in Minnesota, and I think it's true far beyond Minnesota, which is both deeply frustrating but also a tremendous opportunity."
Talent pool dilemma
As of 2022, there are roughly 110,000 tech employees in the state. That figure ranks 18th among the 50 states, according the Computing Technology Industry Association. A year ago, Minnesota ranked 12th in net tech employment.
Experts forecast the state's unemployment rate for tech occupations to stay at 1.1% through 2027. Software developers and analysts are the most sought after workers in Minnesota with more than 7,000 positions advertised each month, though employers fill only 1 in 4 of those positions each month.
In Minnesota, the annual median tech wage is $94,715, 106% higher than the state's median wage. Depriving students, especially those living in underrepresented communities, from high salaries can be a detriment to the state's economy, experts said.
"We're already seeing it in the jobs that we need to fill. There's just not going to be people that have the skills that we need to fill them. And that's just keeping people in poverty," said Valerie Lockhart, executive director of Code Savvy, a St. Louis Park-based nonprofit providing professional development training to K-12 teachers who want to incorporate computer science into their classrooms.
The organization, formed in 2014, also coordinates professional technologists volunteering their time in school districts to teach computer science to school-age children.
"There's also new careers popping up all the time, and new tech that is being expected of people as they're adults," Lockhart said. "And it's hard for adults to even keep up."
The lack of Minnesota tech talent is a sign the state isn't reaching its full economic potential, especially within fast-growing industries like cybersecurity, said Dan Schiappa, chief product officer at Eden Prairie-based cybersecurity company Arctic Wolf.
Arctic Wolf has more than 2,100 employees distributed across states like Texas and Florida as well as Europe, South Africa and the Asia-Pacific region. Slightly more than 500 of the company's workers live in Minnesota.
"Without a steady in-state supply of talented professionals in technology, Minnesota-based businesses will struggle to compete with competitors around the U.S. and globally, and Minnesota's economy will suffer as a result," Schiappa said.
A possible solution
For businesses to stay competitive and support an industry that contributes $29 billion to the state's economy each year, tech leaders are calling on education reform to build a tech pipeline.
The Minnesota Computer Science Education Advancement Act, introduced this year, calls for adding computer science coursework into the state's K-12 curriculum and developing a statewide computer science investment of $4 million annually to help school districts across Minnesota.
The House passed part of the legislation, and the Senate did not. As education bills from both sides advanced to conference committees last week, legislators agreed to include $500,000 annually — not $4 million — for computer science funding in the K12 Education Finance and Policy Bill.
It's well below what other states are investing, said Jeff Tollefson, CEO of MTA.
Minnesota ranks last in the U.S. in the percentage of high schools offering computer science coursework with only 21% doing so. Of those schools, 12% are in urban areas, according to MTA. The national average of states whose schools offer computer science courses is 53%.
Meanwhile in Iowa, 71% of high schools offer a computer science course, and in Wisconsin, it's 66%. North Dakota recently signed into law a bill that makes taking at least one computer science or cybersecurity course a requirement for graduation.
"If we're not exposing our youth at an earlier time to what it means to think computationally and code, we're going to lose out to other states and other countries in terms of job opportunities," Tollefson said.
During the pandemic between October 2021 and October 2022, job postings for remote tech occupations from Minnesota companies grew 421%, MTA reported. For all other occupations at those companies, remote work postings only increased 195%
As a whole, the U.S. is offshoring tech jobs to other countries.
"If you look at countries like India or China and the number of STEM graduates they produce each and every year, it far outstrips what we're doing in the United States today," Tollefson said.
What's more, other tech hubs are hiring away Minnesota's graduates to cities like Nashville, Austin, Texas, and Denver. Minnesota companies are following the migration of talent and opening offices in those cities, Tollefson added.
"Part of this is because we have failed to build our homegrown talent pool," he said.
Today's graduates are not limited to a job out of college with a Minnesota company, Jamf's Hager said. They can work for any Silicon Valley company or even an international one.
"All of a sudden, you have Minnesota-based companies competing for that Minnesota-based tech talent and competing with Google, Microsoft and Amazon and all of these companies that hire people from anywhere in the world," he said.
Minnesota companies aren't making it easy for themselves. Nearly 90% of tech job postings in the Twin Cities require a bachelor's degree, well above the national average of 60%.
"Companies are already having to adjust how they source talent in light of this smaller talent pool that we're going to have," Tollefson said.
Some companies are considering workers with associate degrees or special certifications. Some are providing on-the-job apprenticeships. Arctic Wolf is partnering with nonprofit Smart North to operate a community tech center in the Sabathani Community Center in south Minneapolis to help youth pursue a tech career.
The hiring process will only worsen if Minnesota doesn't solve the pipeline dilemma.
"People need to wake up and realize before it's too late," Tollefson said.
Artic Wolf's Schiappa would like to see Minnesota mimic North Dakota's mandate to jump-start a sustainable, knowledgeable and homegrown cyber workforce. Sparking interest in technology, as a whole, is paramount, he said.
"Our education system in the U.S. kind of got the notion that college-level courses in almost every subject should be moved to high school," Hager said. "But for some reason, computer science was moving from high school and [the thinking was that] 'college will take care of that.'
"We can create all that talent, and they can stay right here and work for these incredible companies around the world, including Minnesota companies."