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Growing startup scene, employer loyalty lure tech talent to Midwest companies

Fred O'Connor | Sept. 25, 2014
When Abby Cohen and Andrew Brimer decided to locate their health IT startup, Sparo Labs, in St. Louis, neither one considered a Midwest location as a challenge to attracting top technology workers.

But even without a well-known IT company calling the middle of the U.S. home, "when you think about technology talent in the Midwest there is an attractiveness because of the opportunities within certain markets," mainly those that are close to large cities, Tillery said.

Being located in a major metropolitan market like Chicago helps companies attract workers, said Joe DeCosmo, chief analytics officer at Enova, which is based there.

Chicago's lifestyle rivals those found in other technology epicenters, said DeCosmo and, with a lower cost of living, keeps employees from defecting to companies on the coasts.

"The folks that we attract here from the coasts end up ahead because we pay pretty competitively and couple that with the lower housing costs, it's a benefit to come here," he said.

And with Chicago's technology scene growing, a company across town may prove a bigger threat to tech talent than one from across the country.

"We haven't lost too many folk to the coasts," said DeCosmo, whose company offers financial and credit services products. "I don't feel like we're fighting much on that front these days. When we have lost tech talent it's mostly to other [Chicago] startups. The technology community and the startup community in Chicago [have] really picked up. There's more competition than ever."

Chicago's startup and technology scene has grown more robust in the past five years, helped by GroupOn, a website that offers member daily discounts on lifestyle items, and GrubHub, an online food ordering company, which are both located in the city, DeCosmo said.

"In the past a startup scene and technology innovation, those things weren't as vibrant," he said. City officials took notice as well and began pushing big-data initiatives in recent years, including appointing a director of data analytics in 2012. In July, the city began adding sensors to lamp posts to collect data related to air quality and pedestrian density, among other metrics. These programs placed Chicago at the forefront of technology and data-driven cities, DeCosmo said.

Excluding Chicago, since its status as a metropolitan city makes it easier to attract top talent, there is a perception that Midwestern companies lag in innovation compared to businesses in coastal cities, said Larry Williams, senior vice president of IT recruitment at staffing firm Addison Group.

"I do see a little bit more out-of-the-box creativity in the coastal cities," he said. "Some Midwest companies are very rigid and do not want to change how they've been conducting business, which is fine. The way that Midwest companies have been able to solve that is by innovation labs."

These labs are in Chicago as well as downtown St. Louis and Milwaukee, and are usually staffed by younger tech workers who live in the city and work on projects involving new technologies, Williams said. Companies with innovation labs also operate primary offices in the suburbs where infrastructure and IT services professionals, many with families, are located.


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