Talent Hubs 2024

Talent is the bedrock of the office market, forming a pipeline of new end-users that sends over 1 million graduates from classrooms to workspaces on an annual basis. Each year, it is estimated that the newest graduating class comprises roughly 3% of total office users in the U.S. and are among the most frequent attendees. The markets where graduates are establishing their careers provide key insights on the health of different office markets in the U.S. and indicate which are positioned for outpaced growth in the upcoming cycle. In the wake of the pandemic, office users have seen considerable volatility in workplace locations and company attendance policies. Extremely low interest rates and a robust job market in 2021-2022 introduced more locational flexibility than office workers have ever seen, but higher interest rates and widespread adoption of hybrid return-to-office mandates has begun to normalize that flexibility. The Class of 2024 will be the first graduating class since the onset of the pandemic that will predominantly be expected to regularly attend the office at the outset of their roles.

Understanding trends in graduate locations helps illuminate the future of the office market—most new graduates will never relocate to a different metro area after establishing their career. These decisions, in many cases, reflect a multi-decade commitment to reside in that market, and gradually influence the quantity and quality of office that makes up a particular market.

Most metro areas in the U.S. have a distinct profile for their role in the market for skilled talent: Talent Engines, generally anchored by university cities or towns, which produce a disproportionate number of graduates for their size; and Talent Magnets, major metropolitan areas and larger cities with a robust job market and broad social networks that attract these graduates as they enter the workforce. Talent Magnets like Chicago and Los Angeles generate less university graduates in their metropolitan area but attract pipelines from nearby metros or other markets entirely to maintain robust pools of skilled talent. Talent Engines like Boston and Raleigh-Durham have large student populations at prestigious universities, producing many new workers annually to feed into the labor market. True talent hubs possess traits of both Talent Engines and Talent Magnets.

Historically, industrialization and urbanization have concentrated economic activity in the U.S. in major metropolitan areas. Talent migration similarly follows a more concentrated distribution: two-thirds of 2024 grads settled in the 21 largest talent hubs, despite comprising just 43% of the overall U.S. population. As hubs for office-using industries like technology and finance, job availability for college graduates is robust in these areas. By continuing to attract top-tier talent, these cities create a positive feedback loop, which continues to drive innovation and elevated productivity, leading to stronger economic outcomes over the long term.

In 2024, graduates across regions showed a stronger proclivity to remain in smaller markets, with 13.1% of graduates residing in tertiary markets, compared to a 10-year average of 12.1%. Secondary markets fell from 34% to 33.1%, and gateway markets declined marginally from 54.1% to 53.9%. Several factors contributed to this trend: lingering availability of remote work, a weaker job market, and significant cost-of-living increases in major metros drove more graduates to remain in their university metros for an extended period or relocate to smaller, less costly markets. Many of the graduates locating in tertiary markets or delaying relocation are expected to eventually migrate to gateway markets or major secondary markets amid more favorable labor market conditions and more robust wage growth. Despite the growth among smaller markets, gateway and major secondary markets absorb the overwhelming majority of graduates, and capture even larger shares when focused on top-ranked academic institutions.