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San Francisco: Top City to Hire Software Engineers

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The Karat Team

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San Francisco and the larger Bay Area, which includes Oakland and Silicon Valley, continues to be one of the world’s preeminent tech hubs. In our 2024 report on the top cities to hire software engineers, San Francisco ranks second in the world for strong engineering talent and has the third largest talent pool. Tech giants like Apple, Google, and Facebook are headquartered in the Bay Area, and the region attracts entrepreneurs and startups due to its high concentration of venture capital investment.

Discover why San Francisco remains one of the best places for software engineering talent and the challenges that companies should be aware of when hiring there. 

Why San Francisco

  • Leading AI hub: With AI being one of the hottest fields in technology right now, San Francisco is establishing itself as the center of AI innovation in the U.S. Even Salesforce CEO Marc Benioff said that San Francisco is “becoming the No. 1 A.I. city in the world.” San Francisco and the Silicon Valley area lead the way in several aspects. In 2021, San Francisco and San Jose accounted for about 25% of AI conference papers, patents, and companies. They also had four times as many AI companies, job postings, and job profiles compared to the averages of the next 13 metro areas. The Bay Area has two of the top universities in AI research in the world: Stanford University and the University of California, Berkeley. The area’s concentration of AI talent was reflected in the 2024 Forbes 50 AI list, which showed that “San Francisco alone is home to 20 of the best-funded AI companies — more than the rest of America combined.” 
  • Prestigious engineering institutions: The Bay Area attracts some of the brightest students from around the world due to having two of the best universities in the country that excel in software engineering. According to U.S. News & World Report, Stanford University and the University of California, Berkeley (UC Berkeley) tie for fourth in having the best undergraduate software engineering program and tie for second in computer science. Founded in 1965, the Computer Science Department at Stanford has produced A.M. Turing Award winners and MacArthur Fellows. Faculty and alumni have founded some of the most well-known tech companies such as Google, Netflix, and VMWare. Similarly, the Computer Science Department at UC Berkeley was established in 1968, and the department later merged with the Department of Electrical Engineering Department in 1973. The university has been a leader in the field of computational complexity, and its alumni pioneered the workstation and personal computer industry by co-founding Apple, Sun Microsystems, and Xerox PARC. 

Hiring Challenges in San Francisco

  • High cost of living: San Francisco is the 10th most expensive city in the world, with everything from housing to the price of goods and services being higher than the national average. The cost to hire software engineers is no exception. Our report found that San Francisco is the most expensive, with a median salary of $242,000. On top of that, the city “has one of the highest corporate income tax and sales tax rates in the US, and ranks highest for utility payments and office and industrial costs.” Even large tech companies are hit hard, as “San Francisco’s business tax burden for large corporations is more than double the next highest city, Oakland.” These factors, along with the rise of remote work during the pandemic, have caused large tech companies, such as Oracle and Hewlett Packard Enterprise, to either move entirely out of the Bay Area or relocate their headquarters.
  • Migration of tech talent: The Bay Area saw an exodus in the wake of the pandemic. Its population decreased by roughly 3% as people were able to move due to remote work. The area’s exorbitant housing costs, crime, and other quality-of-life concerns also contributed to the population decline. Some tech workers moved from the city to the suburbs or Tahoe. Others chose to move to cities with a lower cost of living, such as Austin, or even New York, a tech hub that’s more expensive than San Francisco. Although census data shows that people are coming back to San Francisco for the first time since 2019, New York is drawing young tech workers from the Bay Area. LinkedIn data shows that New York saw a 3.5% net gain in tech talent from 2022 to 2023, while San Francisco saw a 3.7% net loss. Although it costs 34% more to live in New York than in San Francisco, “There’s a bigger gap in New York between the number of open, interesting roles and the qualified people there to take them,” said Atli Thorkelsson, Vice President of Talent Network at Redpoint Ventures. Additionally, younger generations are attracted to New York for its variety of experiences, vibrant nightlife, and robust dating scene. 

If you’re considering tapping into global tech talent to rapidly grow, manage costs, or expand into new markets, see our full report on the top cities to hire software engineers in 2024.


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