Talent Hubs 2025

An improving labor market for college graduates during the first half of the year has quickly given way to rapid softening in recent months, but there have been some positive indications for office-using roles. Entry-level job postings for office-using sectors trended upwards during the first half of the year and are on pace to exceed 2024 levels, despite recent softening. Recovery in equity markets and renewed venture capital flows had a notable impact on market distribution in 2025, with the San Francisco Bay Area re-establishing itself as the #2 Talent Hub in the nation. The recovery in more cyclical, capital-fueled markets was evident elsewhere as well, with San Diego (#14) also rising one position in rankings and Raleigh-Durham (#15) rising two positions. Momentum for markets that have been targets for corporate relocation remained evident in 2025, particularly for Sun Belt markets which saw several consequential shifts—most notably, the Dallas-Fort Worth metroplex surpassed Seattle and Houston in 2025 to reach the #9 position among national Talent Hubs. Outside of Texas, Florida and North Carolina markets continue to rise, largely benefitting from the same outpaced demographic momentum and high-profile corporate relocations that have occurred in recent years—Tampa reached the top 25 markets for the first time, rising three positions year-over-year.

While labor markets are tentatively improving, graduates are still grappling with above-average rent growth, high housing prices and elevated interest rates which have driven up cost of living considerably in some areas—all contributing to upward pressure on wages. Average entry-level salaries for office-bound graduates has increased by 3.6% YTD, surpassing headline inflation rates for the first time in several years. In markets where outpaced population growth has been met with inadequate new housing development, these cost-of-living pressures are more acute and driving greater upward pressure on wages.

Talent Hubs data illuminates several avenues for companies to achieve recruiting and retention advantages through upgrading different aspects of their real estate portfolio or office utilization. Groups who upgraded to newer and more amenitized offices outperformed their peers with recent graduating classes, and companies that relocated offices to vibrant Live-Work-Play environments are finding it easier to staff up those markets than other cities in their portfolios. Despite a generally positive view around flexibility and remote work among employees, regular attendance policies which foster collaboration, mentorship, and a sense of belonging are particularly important for younger entry-level employees and create lower turnover in the organization.

As competition for talent becomes more intense in future cycles, groups that intelligently curate their portfolios with an eye on depth and cost of local talent pools, while also implementing strategies to maximize the ROI generated by their workspace, will be positioned for stronger employee outcomes, higher retention rates and more successful recruiting efforts.

Labor market signals have been mixed for younger professionals YTD. Unemployment rates for younger degree-holders have risen since the beginning of the year, which is not atypical as graduates begin to enter the job market en masse but remained lower than corresponding periods in 2024 until a spike in August. Sentiment has softened since the beginning of the year, when graduate hiring plans were more optimistic: a National Association of Colleges and Employers (NACE) survey during Fall 2024 indicated that employers planned to increase graduate hiring by more than 7% in 2025, but when surveyed again in Spring 2025, they indicated that hiring levels would be flat relative to 2024. Peak graduate hiring periods typically take place from May to October, and most graduates accept offers within six months of graduation, so labor market conditions through the remainder of the year will still meaningfully impact overall hiring levels relative to the Class of 2024.

A key driver for market performance in 2025 was the recovery of venture capital flows nationally – VC deal volume has improved since early 2024 and reached almost 80% of peak levels in the 12 months ending with Q2 2025. VC investments in startups and other early-stage companies are often directly and immediately tied to new hiring, which had an impact on the share of graduates flowing to markets that received an outsized share of VC funds: this drove the San Francisco Bay Area up to the #2 spot in this year’s rankings but also lifted smaller markets with outsized VC activity. While select secondary markets receive a healthy portion of VC deal activity, most investment flows to gateway markets, driving stronger performance in general with 2025 graduates.

In addition to growth in VC volume that is largely captured by gateway markets, labor markets in larger markets outperformed smaller hubs more generally in 2025. Part of that outperformance was driven by a concerted return-to-hubs office strategy that many large employers have implemented. In the past year, groups like Amazon, Walmart, AT&T, and others have begun to consolidate headcount and hiring in existing office hubs, many of which are concentrated among the 10 largest office markets. The consolidation of talent in gateway markets was even more acute when focusing on high-end talent: 86% of “Elite” graduates from Top 20-ranked universities took employment in one of the top 10 talent hubs, up nearly 10% from the share of the Class of 2024. One risk factor for the long-term talent profile of gateway markets has been a sharp decline in international student migration to the U.S. because of strict immigration policies and growing global tension stemming from trade policies. In the first five months of 2025, international student visas issued by the U.S. Department of State have declined 14% compared to 2024, and the number of international universities grads who took employment in U.S. markets fell by 20% in 2025. If this decline persists, it stands to have the most acute impact on coastal gateway markets: 55% of international graduates who relocate to the U.S. choose New York, the Bay Area, Boston, DC, or Los Angeles as their home market. International students have collectively comprised roughly 6% of total U.S. university student population in recent years, so despite meaningful declines, the total reduction in U.S.-bound talent is just over 1% of graduates.

Another common thread of performance in 2025 was the continued rise of talent quality and depth in the top corporate relocation targets of the past decade.

Since 2020, more than 1,000 publicly-traded corporations relocated their HQ across state lines, with Texas and Florida overwhelmingly being the net beneficiaries of that relocation. Talent Hub performance in recent years has closely tracked corporate relocation activity—markets in Texas, Florida, and North Carolina particularly have climbed several spots in Talent Hub rankings since the outset of the pandemic. Corporate relocation activity provides an important secondary signal for markets with strong demographic momentum that indicates a higher likelihood that momentum spills over into office market outperformance. Despite demographic momentum in the Sun Belt, Northeast and Midwest regions benefit from a significantly larger pipeline of graduates due to higher concentration of universities. While TX and FL boast the third and fourth highest concentrations of university students nationally, the Sun Belt region houses 143,000 students, compared to 174,000 in Midwest states and over 282,000 students on the East Coast. University expansions and developments announced in the past year will strengthen the Talent Engine potential of Sun Belt markets, with several notable expansions announced for Texas and Florida. Additional student capacity of nearly 20,000 across TX and AR will support the continued rise of the Dallas-Fort Worth metroplex, potentially driving continued growth in the coming years.