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City’s ambition in becoming a tech hub lies in its traditional industries
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Leaner is better. That’s what Meta chief executive officer Mark Zuckerburg said when he announced in March that the company would be laying off 10,000 workers. That sentiment sums up the ongoing shift in the technology sector as several well-known companies, including Google, Amazon, Microsoft and Spotify, have let tens of thousands of workers go.
The eruption of tech layoffs in recent months has given people both inside and outside the industry cause for concern.
Amazon laid off 9,000 people in March alone. At the start of the year, Microsoft announced plans to cut 10,000 positions. Locally, companies including Zywave and Fiserv made undisclosed reductions in their workforces.
All told, more than 100,000 global tech positions were cut in just the first two months of 2023, according to data compiled from the website Layoffs.fyi.
In the U.S., job cuts have impacted tech workers ranging from artificial intelligence specialists and software engineering to administrators. The tech sector also encompasses industry segments like engineered products, advanced manufacturing, software and IT.[caption id="attachment_547936" align="alignright" width="300"] Kathy Henrich[/caption]
Some tech industry experts, like Milwaukee Tech Hub Coalition’s chief executive Kathy Henrich, believe the actual scope of ongoing tech industry layoffs has been a bit overstated.
“If you go beyond the headlines of all these layoffs, systematically we have this gap in demand (for tech workers) that is going to continue,” said Henrich.
Nationwide, the tech occupation unemployment rate is below 2%, according to January data from CompTIA. During the same period, the national unemployment rate saw a slight increase.
For the past few years, there’s been a growing gap in the number of open technology positions across the U.S. and the number of people being hired. That gap is expected to widen by another 160,000 people this year, according to data from the Bureau of Labor Statistics.
Meanwhile, Milwaukee has set out to become one of the country’s next tech hubs, a goal being shepherded by groups like the Milwaukee Tech Hub Coalition and by Mayor Cavalier Johnson. Several experts say the ongoing efforts to strengthen Milwaukee’s tech ecosystem through talent attraction and increased innovation is tethered not just to the region’s tech companies but perhaps even more so to its legacy industries, particularly manufacturing, which employed nearly one-third to half of all workers in Milwaukee in the late 1800s, according to University of Wisconsin-Milwaukee’s Encyclopedia of Milwaukee.
Today, those legacy industries are home to a large portion of the region’s technology infrastructure and workforce, which is more robust than one might think.[caption id="attachment_567723" align="alignnone" width="1280"] Jon Finch[/caption]
“We spend a lot of time talking about how we’re trying to re-message this whole concept of a tech hub,” said Jon Finch, senior vice president of talent at Brookfield-based Milwaukee Tool. “In my mind, it’s not about trying to make us a tech hub as much as making technology prevalent and clearly visible to everybody. It’s in everything that we do.”
A search for open tech roles in the Milwaukee area yields no shortage of results. Milwaukee Tool alone hovers around 100 open positions; building systems company Johnson Controls has 500 open tech-related positions.
Milwaukee-based insurance company Northwestern Mutual is also actively recruiting to fill about 100 open tech-related positions, using a mix of tactics including upskilling and reskilling, social media and networking, and strategic partnerships.
“We actually have the highest percentage across any city in the country of our tech occupations being embedded in our traditional industries,” said Henrich. “We just aren’t known for it, but we actually have a high density compared to other cities. If you look at us compared to Nashville, we actually have almost twice the density of tech here in Milwaukee.”
Key to Milwaukee realizing its full potential as a hub for technology and innovation is tapping into its existing strengths.
Fighting the narrative
Despite data that shows there is still plenty of work for people in the tech industry, skepticism surrounding the sector remains as layoffs continue. The concern rose to such a high level that Experis, an IT staffing firm connected to Milwaukee-based ManpowerGroup, held a two-day virtual recruiting event aimed at “disrupting” the current narrative around the tech sector. The firm connected with 100,000 workers looking for a job in tech. Experis normally places between 15,000 and 20,000 people each year.[caption id="attachment_567722" align="alignright" width="300"] Ger Doyle[/caption]
“The hype is often hype,” said Ger Doyle, head of Experis. “I’m not saying there weren’t layoffs, because there were. But when you look deeply, a lot of it was recruiting teams being let go and more administrative roles. Certainly, some companies had layoffs of tech people as well, but it’s never as bad as the hype.”
Doyle said there’s still extreme demand for any positions related to software development, data development, the cloud and IT. The financial services sector has some of the highest demand for tech workers throughout the country. Demand for workers in the logistics industry has also rebounded post-pandemic, according to Doyle.
Despite ongoing layoffs across the tech industry, Doyle said Experis has not experienced hesitation from workers looking to continue in the field.
“We haven’t seen anybody say they wouldn’t take a job in tech – absolutely not,” he said.
The same can be said for companies that are investing heavily in technology. Despite the period of uncertainty, many aren’t concerned about having to change course.
“Tech and digital talent underpin much of our long-term strategy at Northwestern Mutual,” said Kara Hughes, vice president and human resources business partner at the company. “Specifically, we want to enable the business with technology solutions that are innovative, secure and reliable to be the most powerful digital engine in financial services. Like many companies during this period of uncertainty, we are very thoughtful and intentional about our hiring efforts.”
Johnson Controls has not only kept up its pace for hiring, but also increased it. Last year, the company hired 1,000 people into tech-related roles. Half of those roles were new and created to keep up with demand for the company’s services, said Marlon Sullivan, chief HR officer.
“While we are not considered ‘Big Tech,’ we have been through a big technology transformation and will continue to move forward with our plans to welcome new talent to the team in remote and on-campus roles,” said Sullivan.
Experis has also seen the trend of demand for tech workers outweighing supply. Over the next year, the company will work to place the 100,000 workers it connected with during its recent virtual recruiting event at companies across the U.S. The firm matches each candidate based on career objectives and in-demand skills.
“A lot of the candidates we work with here locally in Milwaukee, the conversation has really been how can we help them upskill and even cross-skill,” said Mario Cortez, senior manager for the global service delivery team at Experis. “I think that’s really effective because the conversations aren’t really around how they can leave the tech market.”[caption id="attachment_567727" align="alignnone" width="1280"] Milwaukee Tool employees soldering and assembling an electronics circuit board for a rotary hammer.[/caption]
How legacy industries use tech
A single battery made by Milwaukee Tool is encrypted with more lines of code than the space shuttles launched in the ‘80s.
The tool manufacturer has seen hypergrowth in its use of technology in the past two decades, according to Finch. After the introduction of lithium ion, used as a new way to power tools, Milwaukee Tool has continued to lean heavily into innovation.
Milwaukee Tool has taken a different approach to how it reels in talent. Finch said not everyone who works with technology would say they have a tech job, at least by definition of what most people consider technology roles. So, the company is instead focused on being known for innovation and leveraging technology to solve its problems. Finch sees the use of technology within the company being more about the actual application.
“I think what’s been even more impactful for us is the volatility and uncertainty that’s been in that remote tech, consumer-focused sector,” said Finch. “You’re seeing companies like ours that have decades of growth and consistent opportunity. The tech sector that we’ve been fighting with in Silicon Valley isn’t quite as shiny.”
Brown Deer-based water meter manufacturer Badger Meter is another legacy Milwaukee-area company that leans heavily on technology. Almost half of the company’s cash flow is deployed into areas of innovation, whether that be traditional research and development or acquiring other businesses and their technology. A combination of acquisitions and expansion of its own software has led revenues to climb at 45% compound annual growth rate over the past five years.[caption id="attachment_567724" align="alignright" width="300"] Karen Bauer[/caption]
“Every single company has some aspect of technology, and it’s really important for us to highlight what technology means to manufacturers in the Milwaukee area. Education about what technology is and what we have to offer needs to be first,” said Karen Bauer, vice president of investor relations, corporate strategy and treasurer at Badger Meter.
The company was first to market with an ultrasonic meter 15 years ago and has continued to focus heavily on innovative new products. Modern technology, including artificial intelligence, is utilized in some of the company’s software to help gather data.
“I think people think we just chuck out these water meters month after month and that’s basically our business, but like most things, the industry has moved into a more technology-based fashion,” said Bauer.
Tech companies themselves are looking to Milwaukee’s legacy industries to blaze a trail for continued growth within the local tech ecosystem.
Jesse DePinto, co-founder and CEO of Milwaukee-based short-term apartment rental company Frontdesk, a rapidly growing startup, says a conservative Midwestern mindset can pay dividends for the region’s economy.
“History is showing that Milwaukee was more right than people thought. There’s a reason people are risk-averse. Times are not always great,” said DePinto. “As much as Milwaukee likes to compare itself to Silicon Valley, as if Silicon Valley is doing everything right, these past few weeks have demonstrated that’s not always the case.”
He pointed to ongoing layoffs and the collapse of Silicon Valley Bank, which invested heavily in startups and technology companies – as signs of cracks in Big Tech’s foundation.
While he’s a bit skeptical of the goal of making Milwaukee a “tech hub,” DePinto does think there are some underlying outcomes that would be a good thing for the city.[caption id="attachment_549482" align="alignright" width="300"] Jesse DePinto[/caption]
He believes most people in the local business community want a vibrant economy, with a growing workforce and thriving businesses. They see technology as the way to get there. However, DePinto also believes people across the globe are realizing technology is not “as much of a silver bullet as they thought it was.” How much value cities and organizations place on tech careers could come more into question in the future.
“I actually think there’s some merit to us having more diversification and traditional, small manufacturing type of businesses,” said DePinto. “When people say tech hub, they want the next generation of Harley-Davidson and Rockwell Automation to be created. Our issue is young people are not staying here to create businesses.”[caption id="attachment_567728" align="alignnone" width="1280"] Sheryl Hopkins[/caption]
Sheryl Hopkins, vice president of human resources at Badger Meter, also sees shortcomings in the idea of Milwaukee becoming a traditional tech hub. About 80% of the company’s 2,000 employees work in manufacturing. As some of the technology positions in Silicon Valley have been leaning more toward remote work, Hopkins said she just doesn’t see a city like Milwaukee being able to do the same.
“It may be difficult to think of Milwaukee as this true Silicon Valley hub when we have so much manufacturing and hands-on work here,” said Hopkins.
Retaining young workers
One thing most experts in the tech sector can agree on is that Milwaukee needs a better plan to retain young talent. Milwaukee-based SoftwareOne, a software and cloud solutions provider, is looking to position itself as a symbol of the city’s future for students who will soon enter the technology workforce.
“SoftwareOne wants to be a central tech hub to be able to say Milwaukee is tech centered. Look at all of these organizations that are coming here now,” said Ashley Baird, president of SoftwareOne North America.[caption id="attachment_567730" align="alignnone" width="1280"] Ashley Baird[/caption]
The company, which is hiring nationally and has accelerated its recruiting process amidst ongoing tech layoffs, recently relocated its headquarters and 135 workers to Milwaukee’s Third Ward from Waukesha County, in part to gain a closer proximity to the area’s numerous colleges and universities.
Baird believes the city needs a forward-looking, progressive technology company to attract young talent that might not believe there are job opportunities in the Midwest.
“You have to start somewhere and get exposure,” she said. “The cool thing about tech is there’s this ecosystem. Once you can leverage the ecosystem, then your brand starts evangelizing and then you get talent coming in. I’d love to say in five years we’ve doubled our size in Milwaukee.”
SoftwareOne has a multi-faceted outreach plan. Within its brand-new headquarters office, the company plans to host numerous training sessions and summits with representatives from technology companies across the country. This will help spread word of the opportunities that lie within the city. Baird also aspires to bring a more cohesive feeling to Milwaukee’s tech-related efforts by making sure best practices between organizations are shared. She said this can be done by working to foster a more collaborative environment across all organizations and leaders.
“What we need to do in Milwaukee is break down barriers and stop working in silos and bring all of these leaders together,” said Baird, who believes the opening of SoftwareOne’s new office signifies noteworthy progress in Milwaukee becoming more tech savvy. “Milwaukee has such a great historical foundation in companies like Generac and Rockwell and Johnson Controls. You have these classic companies that have continued to employ people in an industry that’s tough. What’s fascinating is those industries, especially in manufacturing, is that they are aggressively in need of tech. You have two poles kind of coming together.”
In working with companies across the country, Experis’ Doyle has found that Milwaukee has a particularly high concentration of tech talent coming out of area colleges. Because of this, he thinks the city already has the necessary infrastructure in place to become a tech hub.
“I was at a meeting recently with one of our top clients – one of the biggest software companies in the world – and three of their top executives graduated here in Milwaukee,” said Doyle.
His theory is a combination of efforts to retain incoming tech workers and upskilling the area’s existing talent would be a good way to boost Milwaukee’s overall tech workforce.
One approach could be placing “technological centers of excellence” at businesses, like manufacturers, to train and upskill workers while they’re on the job, said Doyle.
Some companies, like Northwestern Mutual, are already leaning heavily on upskilling programs and coding academies to find tech talent. The company takes advantage of existing programs like i.c.stars, Flatiron School and Udacity.
“That’s a reasonable hypothesis, that we should maybe focus on the industries we’re strong in, but tech on its own, if we can get it right, has a very sustainable future,” said Doyle.[caption id="attachment_567745" align="alignnone" width="1280"] Inside SoftwareOne’s new headquarters office in Milwaukee’s Third Ward.[/caption]
Playing to Milwaukee’s strengths
Another thing most people can agree on: Milwaukee needs to do better at marketing itself as a desirable place to live in order to not only attract, but also keep workers.[caption id="attachment_567725" align="alignright" width="300"] Matt Cordio[/caption]
Local tech entrepreneur Matt Cordio has noticed an uptick of newcomers to the city who have been relocating for different reasons than usual.
“Historically, I used to hear a lot of people say they’re here because of family,” said Cordio, owner of Skills Pipeline and co-founder of Wisconsin Startup Coalition. “Now, I’m hearing more of, ‘I did my research, and this is a cost-effective, great place to live.’”
In talking to some newcomers, several noted they were drawn to the city’s robust higher education landscape, in hopes of pursuing degrees in the tech sector.
Beyond striving to be a great place to work and live, said Cordio, Milwaukee needs a leader who can spearhead the region’s numerous tech-related initiatives with enough capital to truly push forward a transformational vision. He pointed to ExactTarget co-founder Scott Dorsey, who helped transform Indianapolis’ tech scene, as an example. Burnout from leaders trying to make Milwaukee a tech hub city can be detrimental to the overall goal.
“There are a lot of folks in Milwaukee trying to do the right thing, and sometimes they’re under-resourced but well-intentioned. I think that’s a serious problem and sometimes the people that have the resources are not allocating their resources to the best need,” said Cordio.[caption id="attachment_567729" align="alignnone" width="1280"] Inside SoftwareOne’s new headquarters office in Milwaukee’s Third Ward.[/caption]
Finch agrees that both the state and municipalities need to work together to make Wisconsin an exciting place to live. That means supporting some of our best-known attractions, like the Milwaukee Brewers and Summerfest, and making sure there is a plan in the works to address the shortage of affordable housing. He thinks Milwaukee can attract tech workers who don’t want to give up having a challenging job but might be considering a city with a bit of a slower pace and family-friendly environment.
“Milwaukee is uniquely going to have to figure out its path to being a (city) that embraces tech. A city can’t survive and an economy can’t survive without technology,” said Cordio. “Every company here has gone through or will go through a digital transformation.”