Five Factors Behind Waterloo’s 7th Place CBRE Talent Ranking

Waterloo beat out major tech heavyweights like Boston, Raleigh-Durham and Atlanta. Our region moved up 11 spots – the most out of any market in the report – to pass much larger cities and snag 7^th. As the only small tech talent market in the top 30, Waterloo is punching well above its weight. Pittsburgh is the #2 small tech talent market in North America and is ranked #31.

Waterloo’s tech talent market continues to exceed expectations. This year, the question is: what contributed to Waterloo Region’s undeniable improvement in CBRE’s latest report? How did we accelerate 11 spots in the rankings?

Here are five factors that propelled Waterloo to its unprecedented 7^th place finish this year.

Skyrocketing tech talent growth

From 2021-2024, Waterloo had the 2^nd highest tech job growth rate in North America. Tech job growth rate is a marker of a robust tech market, since talent is one of the most important pillars bolstering an ecosystem. Without job growth, talent fades and momentum lags.

Waterloo’s tech talent job growth is 58.2%. In contrast, the San Francisco Bay Area’s job growth was 10.0%, while New York Metro’s was 14.2%. Only Calgary bested Waterloo in this category, just by a hair (61.1%).

CBRE cites Waterloo’s “strong job growth” as one of the main factors behind our entrance into the top 10. The growth speaks to the depth and vitality of our tech talent, and the promise our community holds for companies seeking top quality talent for tech roles.

*Waterloo’s tech talent growth rate compared to top North American tech hubs

Steady and strong tech talent concentration

Tech talent concentration, the percentage of total employment, determines how “tech” a market is and indicates its growth potential. This metric holds the heaviest weight in CBRE’s evaluation process, since tech talent concentration signifies a cluster of tech workers. Anything above 10% is considered highly impressive. Waterloo’s tech talent concentration stands at 11.7%, which is the 2^nd highest in North America.

*Waterloo’s tech talent concentration compared to top North American tech hubs

#1 population growth in young professionals

Another notable characteristic of thriving tech talent markets is the number and concentration of people in their 20s and 30s. These are young professionals who make up the majority of the tech workforce and represent future growth in the sector. Plus, a large presence of young people tends to drive innovation even further.

At 40% and 31%, the Waterloo area had the most overall growth for residents in their 20s and 30s, respectively. It’s a clean sweep, right across the board. Not a single other market can compare to Waterloo in these categories. Waterloo’s population of young professionals is growing more than 50% faster than any other market in North America.

CBRE reports, “[Tech] clusters typically form around preeminent universities that tend to invest the most in innovation and provide a steady flow of new talent for local companies.” This is the benefit of locating near the University of Waterloo, one of the biggest and best innovation universities in North America. Waterloo’s cluster of young tech professionals and ever-growing stream of fresh talent is generated by the collaborative network of universities and colleges in the region.

*Waterloo’s population change of those in their 20s and 30s compared to top North American tech hubs

Significant cost advantages

Waterloo’s cost advantages are another main factor in our advance up the rankings. In general, the lowest cost markets are in Canada, which makes the country an excellent place to expand.

Overall, the total cost of operating a tech company in Waterloo is $39.7M. This number considers the costs of operating for a single year with 500 employees in 60,000 sq. ft. of office space. Out of all fifty markets on the list, Waterloo Region is in the top 5 for cost advantages.

In fact, businesses can save up to 54% by choosing Waterloo. Our tech market is 39.9% less expensive than Boston, 43.8% less expensive than New York and 54.2% less expensive than San Francisco. These lower costs are driven by savings across salaries, taxes and lease costs, but it’s a particularly advantageous exchange rate that helps ensure savings for companies locating in Canada.

You never have to sacrifice quality for cost in Waterloo. Tied with Vancouver, Waterloo offers the best value for cost and quality out of all markets in North America.

An artificial intelligence boom

One of the key takeaways from the report was the impact of artificial intelligence. CBRE reports, “Artificial intelligence is a transformative technology with high potential to become a major source of economic growth and real estate demand.” AI software and hardware developers are currently the most sought-after tech talent by employers.

Markets with lots of tech talent specializing in AI performed better in the report than others. With a national AI edge, Canadian markets dominated.

Waterloo’s crop of AI talent, while not specifically called out by CBRE, is gaining momentum. Our community is home to one of Canada’s top technology universities, a renowned AI research centre and 135+ companies working in applied AI, natural language processing, smart robotics, machine learning and more. Waterloo is a hotbed for tech and AI talent, boosting our economic growth and transforming our tech ecosystem into one of the top talent markets in the continent.