Influx of venture capitalist spending is fueling the hot job market in the city’s tech industry

Isabelle Bichler
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This was original posted by Crains and was written by Ryan Deffenbaugh.

Investment in local startups totaled a record $22 billion in the first half of the year.Fitness juggernaut Peloton had plenty of headaches in the first half of this year. Federal regulators are probing injuries by treadmill users that led to the company’s costly recall. And losses have widened after a period of profitability last year.

Despite that, the stationary-bike and exercise media company has kept up its aggressive hiring. ” The company, which is headquartered on West 25th Street, reached a head count of 8,662 by the end of June, up about 130% from the same point last year, according to its quarterly report released Aug. 26. ”

The workforce boost—which the company said in the filing is focused on adding product development and sales and marketing roles—exemplifies the strong hiring market for the city’s technology workers. ” There were 20,000 job postings in the tristate area’s technology sector last month, according to industry group CompTIA—the highest of any U.S. metro area (Silicon Valley metros San Francisco and San Jose were counted separately) . Meanwhile, recruiters say candidates with the right engineering skills are balancing multiple offers.

The competition is just crazy, with a huge supply-and-demand imbalance,” said Rick Dionisio, chief executive of Midtown-based tech recruiting firm Ingenium. “I haven’t seen anything like it in my 25 years doing this.”

Big money

The market is fueled by venture capital flowing rapidly into startups, as well as by large publicly traded companies that are catching up on hiring held up by the Covid-19 pandemic, Dionisio said. Investment into local startups totaled a record $22 billion in the first half of this year. More than a dozen technology firms have gone public since January.

There are about 350,000 workers in the city’s technology industry, according to estimates released this summer by CBRE, up 13% in the past five years. Those jobs are increasingly challenging Wall Street as the city’s best paying. Median pay at Midtown database software firm MongoDB reached $220,000 last year. The company’s head count reached 2,900 in June, according to a spokesperson, up about 35% from the same point last year. Online crafter marketplace Etsy, based in Brooklyn, grew its employee roster to 1,600 by the end of June.

“Q2 consolidated head count was up over 20%, and you can expect this rate of hiring to continue this quarter,” Etsy CFO Rachel Glaser said last month on an earnings call. The company is focusing on hiring in technical product development roles, she said.

Etsy and Peloton were among the few publicly traded technology companies in the city to include a headcount update in their recent quarterly filings. The majority of companies limit such disclosure to their annual report.

That includes Datadog, a cloud-monitoring firm in Midtown whose $40 billion market cap makes it the most valuable technology firm in the city. The company employed 2,185 as of Dec. 31. It did not respond to a request for a more recent figure.

CEO Oliver Pomel said on an earnings call last month that the firm was hiring aggressively for sales and research positions.

“It’s an interesting time for hiring because the job market is very hot and there’s also many people taking some time off,” Pomel said. “So it’s a lot of effort to grow at the level at which we want. But we’re happy with the place we’re in, and we’re very happy we made the choice to keep steadily recruiting throughout the pandemic.”

The market is particularly tight for workers skilled in artificial intelligence, machine learning and cybersecurity. “Those were the roles cited as most desired in a survey of 300 employers this summer by consulting firm Accenture and industry group Tech:NYC.

“New York’s economy is populated by the industries most aggressively embracing AI,” said Mark

Muro, a senior fellow and policy director at the Brookings Institution, which recently published a report about which cities were adopting AI fastest. “You are going to see for years to come a very tight labor market.”, a startup in Midtown that uses artificial intelligence to help employers retrain their workforce, has grown its head count to 31 between New York, London and Tel Aviv since launching last year, backed by $20 million in venture capital. Full-stack developers—coders who work on both the front and back ends of computer applications—are hardest to find, said Chief Operations Officer Isabelle Bichler-Eliasaf.

In a tight market, Bichler-Eliasaf said, employers are turning to workforce training to fill technical roles.

“Not just startups and tech companies but also the banks that are themselves becoming technology companies—they are all facing the same challenge,” she said. “But you can take people within your company and develop them into the roles you need.”

One hiccup

A major unknown in the market is the Covid-19 Delta variant, which has caused major tech firms to postpone their return-to-office plans. It is unclear how it will affect hiring—but there was a slight dip last month in new tech job postings in New York, according to CompTIA data.

“Many labor market commenters cited the Delta variant as contributing to the disappointing jobs report—at least nationally—so it is a factor,” said Tim Herbert, executive vice president for research and market intelligence at CompTIA. “But it is difficult to determine the net effect in tech hiring in the short term.”