It’s Hard to Build a Company Without a Talented Team
Attracting senior leadership to Pittsburgh requires a mix of financial incentives, career growth opportunities and lifestyle benefits.
In response to a question about how to find money and talent for your biomedical company, Bruce Peacock remarked “move to Philly!” He noted that he can raise money and recruit an all-star team of professionals over breakfast on a typical morning at Minella’s—a Wayne, PA, diner.
~Overheard at a Pittsburgh BioBreakfast
For startups and growing businesses in smaller markets like Pittsburgh, access to a deep and diverse talent pool is one of the most critical factors in long-term success. In larger cities like New York or San Francisco (or even Philly), companies benefit from a vast supply of highly skilled workers across a variety of industries. However, smaller markets don’t have this luxury, and as such, local talent becomes a vital resource that employers must carefully cultivate and retain. Having a strong, locally rooted workforce provides businesses with greater stability, reduces turnover and ensures that innovation can happen close to home.
Local talent is also an important economic driver. When companies tap into the community for expertise, they contribute to the local economy, foster long-term relationships with universities and create an ecosystem that can sustain further growth. Startups and small businesses in Pittsburgh benefit when they can hire from a local talent pool that is not only qualified but also committed to staying in the region. This creates a virtuous cycle of employment, where businesses and workers invest in the local community together.
Despite its importance, building and maintaining a deep local talent pool is particularly challenging in smaller markets. One of the main issues is talent scarcity in key fields such as technology, healthcare and specialized services. Startups often find themselves competing not only with larger corporations but also with out-of-state employers that offer more competitive salaries, benefits and the allure of big-city opportunities. This makes it difficult for smaller companies to secure the specialized skills they need to scale and innovate.
Another issue is the high turnover rate—particularly in startups. Even when businesses are able to recruit skilled talent, they often struggle to retain employees. In a smaller market, the lack of lateral career movement can cause employees to feel stagnant, driving them to seek opportunities in larger markets or different industries altogether. Moreover, for service providers such as legal, marketing or financial consulting firms, the local market may not provide enough business to sustain operations, leading these businesses to either downsize or relocate. This further diminishes the available pool of expertise that startups rely on.
The COVID-19 pandemic and the rise of remote work have added another layer of complexity. While remote work has allowed some startups to tap into a global talent pool, it also means that local talent is more likely to be lured away by out-of-state companies offering remote positions. This dilutes the local workforce and makes it harder for Pittsburgh-based businesses to retain their competitive edge.
Policymakers in Pittsburgh are certainly aware of the problem and have begun by taking advantage of its world-class universities—notably Carnegie Mellon University (CMU) and the University of Pittsburgh (Pitt). CMU’s Swartz Center for Entrepreneurship, alongside its Project Olympus Incubator Program, provides vital support for startups, nurturing student and faculty innovators with the resources they need to commercialize their technologies. These programs are essential to creating a steady stream of highly qualified talent entering the local workforce, especially in fields like AI, robotics and healthcare.
Similarly, Pitt’s Office of Innovation and Entrepreneurship offers initiatives like the Pitt Ventures Startup Academy, designed to help turn academic research into viable businesses within 12-18 months. These partnerships are crucial for retaining skilled graduates in the region by providing hands-on entrepreneurial opportunities while fostering collaboration between academia and the private sector.
In addition to academic programs, the local government has introduced various tax incentives and grant programs aimed at fostering business growth and retaining local talent. For instance, Pennsylvania’s Research and Development (R&D) Tax Credit and Keystone Innovation Zones (KIZ) provide financial relief to startups, making it easier for them to hire and retain local employees. These programs reduce the burden of competition with larger markets by offsetting operational costs—allowing businesses to reinvest in their workforce. Likewise, government-backed grants such as the “Next is Now” Pittsburgh initiative help drive regional innovation by supporting companies that align with the city’s vision of becoming a leader in sectors like healthcare and robotics.
Private institutions in Pittsburgh also play a critical role in supporting the local startup ecosystem. In addition to AlphaLab Health—a local innovation hub we have covered in the past—the city boasts several other initiatives that provide incubation and growth opportunities for emerging businesses. For example, CMU’s VentureBridge accelerator offers startups early-stage venture funding and mentoring, helping local talent scale their innovations. InnovatePGH, another public-private partnership, works to promote collaboration across industries such as healthcare, tech and education—helping startups leverage shared resources and expertise.
The Advanced Leadership Institute (TALI), in collaboration with CMU, also focuses on fostering leadership skills among underrepresented groups, ensuring that local talent has the tools and opportunities to rise within the city’s growing business landscape. By minimizing silos and encouraging cross-sector collaboration, these programs help retain talent and boost the region’s competitive edge.
Thinking Outside the Box
Hiring issues for startups fall in a variety of categories. Entry level or general staffing requirements can usually be eased via tax incentives and the benefits from a lower-cost labor and housing market. The task of filling qualified technical staffing openings such as lab researchers and specialty specific work can benefit greatly from university, industry and local policy initiatives that improve the technical quality of the local workforce.
Unfortunately, senior staffers such as C-level executives or business unit leaders are not generally enticed by such broad initiatives. Their decisions are often rooted in more forward-looking or career-defining calculations and thus require some different types of incentives.
Senior-level talent are investors in themselves; they generally want to know they are building equity in their future. Like investors, they respond to economic incentives and positive growth projections. The good news is that the primary drivers are therefore the same as those that attract the startups themselves: tax incentives, a vibrant research and services ecosystem and ease of operation. On these fronts Pittsburgh is either thriving or attempting to. So on what additional items must we focus?
Cross-sector collaboration may be the most unique and critical avenue that Pittsburgh must expand. Encouraging collaboration between industries, such as tech startups and healthcare companies, opens up new career pathways for employees and expands the footprint for both talent and opportunities. These partnerships not only spur innovation but also give employees more options for career mobility without needing to leave the local market—a particular concern amongst senior talent.
But cross-sector collaboration also encourages investment opportunity growth in Pittsburgh’s strongest sectors. Deepening and clarifying links between tech firms and medical institutions fuel advancements in medical technology while creating entire new job responsibilities unique to the field. By allowing professionals to explore diverse roles across sectors, startups reduce employee turnover, keeping unique talent local while increasing job satisfaction. In time this will ultimately contribute to a more dynamic and resilient local economy.
It will take time to change perceptions. But by investing in the development and retention of local talent, startups in Pittsburgh can ensure long-term growth and stability. While the challenges of maintaining a deep talent pool are real, with the right programs in place Pittsburgh can continue to grow as a vibrant hub for innovation.
Be sure to check out “Staffing Part 1,” which covers the employee pursuits of quality career tracks—and quality of life—in smaller markets.
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