Texas is still one of the country’s biggest job engines. It is also a market where the right candidates are hard to reach and slow hiring costs real money. If you are growing a team in Dallas, Austin, Houston or San Antonio, here is what the data says about the market right now, and how to hire faster without paying more.
The Texas labor market in numbers
Texas added jobs faster than the nation over the past year, but growth has cooled from its usual pace.
The Texas Workforce Commission reported a statewide unemployment rate of 4.4% in August 2026, with 159,400 jobs added over the year. Annual growth of 1.1% outpaced the national average.
BLS data shows Texas nonfarm employment at about 14.47 million in August 2026 (preliminary).
The Dallas Fed (September 18, 2026) forecasts 1.2% job growth for 2026, about 173,600 jobs. That is below the state's long-run average of around 2%, and year-to-date growth was 1.0%.
The sector that matters most for many growing firms is doing better than the average. Professional and business services employment in Texas grew 3.1% year over year to about 2.19 million jobs in August 2026, roughly three times the pace of total employment (BLS). It was also one of the sectors leading August gains, adding 4,500 jobs in the month.
City by city: Dallas, Austin, Houston and San Antonio
BLS preliminary data for August 2026 (not seasonally adjusted) shows how the four big metros compare:
Metro | Unemployment rate | Total jobs, YoY | Professional & business services, YoY |
|---|---|---|---|
4.4% | +1.0% | +3.1% | |
3.9% | +1.2% | +2.0% | |
5.0% | +1.3% | +2.6% | |
4.5% | +0.5% | +4.8% |
In every one of the four metros, professional and business services is growing faster than overall employment. That means more firms competing for the same consultants, analysts, engineers and project leads.
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Tech hiring: Texas leads the country
For tech roles, the competition is sharper. CompTIA's State of the Tech Workforce 2026 projects Texas will add 32,238 tech jobs in 2026, more than any other state and nearly double California's projected 16,949. Among metros, Dallas (+11,013) is second only to New York City, and Austin (+5,676) is third.
Not every part of tech is growing. BLS data shows the information sector in Texas, which includes software publishing and telecoms, was down 5.3% year over year in August 2026. The demand is for tech skills spread across many kinds of employers, not only traditional tech companies. Banks, energy firms, healthcare systems and consultancies are all hiring for the same skills, which pushes competition up.
Employers say the problem is finding applicants
The Dallas Fed's Texas Business Outlook Surveys asked 305 Texas executives about the labor market in July 2026:
About 50% of firms were trying to hire, up from 44% in January.
A shortage of available applicants was the top hiring obstacle overall.
Among service firms, the leading obstacles were lack of available applicants (47.5%), applicants wanting more pay than offered (46.7%) and lack of technical skills (39.3%).
Applicant availability has improved on net since 2023, but half of firms are competing for the same people. Posting a job and waiting is often not enough.
What slow hiring really costs
Hiring takes time everywhere in the US. SmartRecruiters analysis of 89 million applications (reported March 2025, data from September 2023 to August 2024) found US roles took an average of 35 days to fill. SHRM's 2025 recruiting benchmarking brief put executive time-to-fill at around 45 days.
The direct costs add up too. SHRM's 2025 brief reported a median cost per hire of $1,200 for nonexecutive roles and $10,625 for executive roles. If you use a contingency recruiter, fees typically run 15-25% of first-year base salary, and retained search 30-35% (Paraform, 2026). On an illustrative $120,000 engineering or consulting salary, a 15-25% fee is $18,000 to $30,000 for a single hire.
The cost you do not see on an invoice is often bigger: the client project that slips, the deal that waits for a solutions engineer, the manager covering two jobs. For a professional services firm, a simple estimate is billing rate x expected utilization x days the seat is empty.
How skills-based hiring and direct sourcing help
Screen for skills before resumes
When half of firms are hiring, strong candidates do not wait for slow processes. A short, job-relevant skills assessment at the start lets you identify the best applicants in days, not weeks, and spot capable people whose resumes do not fit the usual pattern. In TestGorilla's State of Skills-Based Hiring 2025 survey of US and UK employers (April 2025), three in five said skills tests had reduced their time-to-hire, and two in three said they had reduced mis-hires.
Skills-first screening also widens your pool. When "lack of technical skills" is a top hiring obstacle, testing the skill directly beats guessing from a degree or job title.
Source candidates directly
When the top obstacle is a lack of applicants, the fix is to stop waiting for them. Direct sourcing means finding people whose skills match your role and reaching out first, including people who are not actively job hunting. It costs less per hire than a contingency fee and builds a pipeline your team owns.
Keep the process tight
Define the five or six skills that predict success in the role.
Use the same interview questions and scorecard for every candidate.
Limit the process to three or four steps and give feedback within two business days.
Track time-to-hire and cost per hire from the start.
Where TestGorilla fits
TestGorilla gives growing Texas firms both halves of this approach. Skills assessments help you rank candidates on what they can actually do. Gorilla Sourcing, launched October 1, 2026, searches 900M+ candidate profiles to find people who match your role and reaches out to them for you, so you are not relying only on inbound applicants or recruiter fees.
Join the free webinar
See how it works at our free webinar, Recruiting in the AI era: Gorilla Sourcing. The US East session runs on November 3 at 10:00 a.m. ET (9:00 a.m. CT).
Sources
Texas Workforce Commission via FOX 7 Austin, Texas jobless rate ticks down in August (September 18, 2026). TWC original: Annual Job Growth Exceeds 159,000 in Texas
U.S. Bureau of Labor Statistics, Economy at a Glance: Texas (August 2026, preliminary)
BLS Economy at a Glance metro pages: Dallas-Fort Worth, Austin, Houston, San Antonio (August 2026, preliminary)
Federal Reserve Bank of Dallas, Texas Employment Forecast (September 18, 2026)
Federal Reserve Bank of Dallas, Texas Business Outlook Surveys special questions, July 2026 (July 27, 2026)
CompTIA, State of the Tech Workforce 2026 (2026)
Staffing Industry Analysts, UK businesses take 40 days to fill job roles, study finds (includes US figure) (March 21, 2025; SmartRecruiters data)
SHRM, 2025 Recruiting Benchmarking brief (2025)
Paraform, Contingency Recruiting: The Complete Guide (April 2026)
TestGorilla, The State of Skills-Based Hiring 2025 (2025)
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