LMG Security – Montana’s largest cybersecurity firm – hired five new full-time employees last year for a total of 20 at its downtown Missoula headquarters, and founder Sherri Davidoff expects to hire four to eight more this year.
The company brings a substantial amount of out-of-state money to Missoula by selling services to clients such as law firms, health care providers and financial institutions, in addition to its local customer base.
The firm is emblematic of Montana’s high-tech industry, which is red hot and expected to get hotter this year.
Employment and revenues are growing at rates seven times faster than the statewide economy, according to a study released Thursday that was conducted by the University of Montana's Bureau of Business and Economic Research.
The study was commissioned by the Montana High Tech Alliance, a statewide membership organization with more than 250 high-tech and manufacturing companies, and the BBER surveyed its members on everything from wages to projected employment growth.
Alliance member companies expect to add 940 jobs this year that pay average annual salaries of $56,800, more than twice the median salary of the average Montana worker of $25,594. Salaries at the companies are growing 30 percent faster than in other sectors.
“Growth projected in high-tech businesses significantly exceeds average statewide economic growth,” said BBER director Patrick Barkey. “Median annual wages are much higher than in other sectors, and since we completed the first survey a year ago, they have increased by 12 percent.”
For the second year in a row, tech businesses reported that Montana’s quality of life, the beauty of the natural landscape and the myriad recreation opportunities provide a significant advantage in business.
“Montana is a great place to start a small, high-tech business,” Davidoff said. “Here, we have affordable office space, a trained labor force and strong community support for high-tech initiatives. Thanks to the Internet, LMG’s staff can live in a gorgeous place and at the same time provide world-class cybersecurity services to an international market.”
Alliance member companies on average expect to raise wages by 5 percent this year, significantly higher than the 3.5 percent average rate of growth in Montana’s overall private sector. Member companies are clustered around Missoula and Bozeman, but can be found all over the state.
"Montana has a vibrant, growing tech sector that is changing the state's economy,” said Christina Henderson, the executive director of the alliance. “This tech boom isn’t just hitting the university towns like Bozeman and Missoula; it’s happening in Lewistown and Big Timber. If we can work together as a state to help these high-tech and manufacturing companies meet their urgent needs for workforce and capital, Montana is poised to become a national high-tech hub."
In 2015, workers in the high-tech industry in Montana could expect to earn $65,126 a year, according to the U.S. Bureau of Labor Statistics. That's behind only the mining, utilities and management industries. The average job in Montana pays $39,372 annually. Henderson said these advantages are persuading more tech firms with headquarters elsewhere to locate offices in Montana, including Workiva (Bozeman and Missoula), Helix Business Solutions (Dillon and Bozeman), Advanced Technology Group (Missoula) and SoFi (Helena).
“Workiva has offices in Bozeman and Missoula because Montana is a great place for technology talent," said Matt Rizai, chairman and CEO of the company. "We also benefit from the high-quality software talent coming from the University of Montana and Montana State University."
Alliance member companies plan to make more than $123 million in major capital investments in Montana in 2016, and 16 percent of them plan to invest more than $300,000.
The most often reported impediment to growth by alliance members was difficulty in attracting talent and hiring skilled tech workers. Their most often cited suggestions for improving Montana’s business climate were to educate the workforce for tech jobs and renew a focus on recruiting and retaining skilled workers.
Davidoff said that in her company’s experience, Montana has been incredibly supportive of the tech industry.
“Royce Engstrom at the University of Montana and Shannon O’Brien at Missoula College have actively reached out to us, as tech industry leaders, to find out what we need in a workforce and to help build curriculum that directly supports industry needs,” she said. “We’ve hired many student interns and graduates from the School of Business and the (Computer Sciences) department, which is a real win-win for tech firms and the students. Cybersecurity is such a new industry that a trained workforce is in high demand, and the university’s efforts really give us a leg up.”