Labor Market Pulse · Information Technology · September 2026
Information Technology Labor Market Report: Sioux Falls, SD MSA — September 2026
Sioux Falls IT pay splits: security rises, networking falls.
Metro Network Engineer pay dropped to $84,718 against a national median of $114,400, while Systems Administrator pay climbed to $85,933, even as metro unemployment held near 1.9%.
Free archive edition. Published by WageScape as sent to subscribers; data as of September 2026.
Key indicators
- Metro unemployment rate: 1.9% — July 2026, among lowest in U.S. metros
- Metro nonfarm payroll change: -1.0% — July 2026, led by 10.3% government decline
- Minnehaha County wage growth: 3.2% — vs 4.7% national wage growth
- Labor force participation: 67.5% — vs 62.2% national rate
Key takeaways
Network Engineer pay is falling locally while rising nationally.
Metro advertised pay for Network Engineers dropped significantly to $84,718 even as the national median climbed to $114,400 — a gap approaching $30,000. This divergence suggests local employers are deprioritizing in-house network staffing, consistent with the metro's 10.3% government employment decline and broader infrastructure outsourcing trend.
Systems Administrator demand looks stickier than the title suggests.
Advertised pay for Systems Administrators rose significantly to $85,933 locally, outpacing the modest national gain. Rather than a legacy role fading under cloud migration, this appears to reflect employers absorbing hybrid infrastructure complexity without adding headcount — paying more per admin instead of hiring more admins.
Cybersecurity and Data Scientist pay gaps with national levels are widening.
Metro Cybersecurity Analyst pay sits over $18,000 below the national median, and Data Scientist pay trails by nearly $19,000. With statewide information-sector employment at just 4.9 thousand workers, local employers compete for a thin specialized bench against remote-capable national employers paying meaningfully more.
Sub-2% metro unemployment is a retention warning, not a hiring one.
At 1.9% unemployment with labor force participation running five points above the national rate, Sioux Falls has little slack left to absorb new hiring. Current conditions suggest retention economics — counteroffers, internal mobility, targeted pay adjustments — matter more than recruiting spend for the next hiring cycle.
Median advertised pay by role — Sioux Falls, SD MSA
| Role | 25th percentile | Median advertised pay | 75th percentile | Metro trend | National median |
|---|---|---|---|---|---|
| Data Scientist | $111,218 | $129,645 | $135,482 | Significant increase | $148,250 |
| Systems Administrator | $66,009 | $85,933 | $88,348 | Significant increase | $101,168 |
| Network Engineer | $72,594 | $84,718 | $87,880 | Significant decline | $114,400 |
| Software Engineer | $94,212 | $123,375 | $137,405 | Significant increase | $153,652 |
| Help Desk/IT Support Specialist | $39,577 | $48,269 | $53,040 | Moderate increase | $53,644 |
| Cybersecurity Analyst | $73,563 | $88,186 | $106,943 | Moderate increase | $106,790 |
| IT Project Manager | $74,394 | $87,802 | $102,496 | Significant increase | $117,530 |
WageScape's median is calibrated to correct for spurious low-value postings (reported as the 60th percentile of raw advertised pay). Download: CSV · JSON
Local market conditions
Sioux Falls unemployment sat near 1.9% in July 2026, among the lowest readings of any metro nationally, even as nonfarm payrolls contracted 1% and government employment fell 10.3% — a sign that headline tightness now reflects shrinking labor supply as much as hiring strength. Available workers totaled roughly 17,670 against 10,935 open positions as of the most recent reading, and wage growth in the region's dominant information-sector adjacent industries continues to lag the national pace, pointing to a market where scarcity, not demand growth, is setting the terms.
What it means
Metro-level pay for infrastructure and network roles is softening even as cybersecurity and software engineering compensation climbs — a split that suggests local employers are consolidating commodity IT functions while competing hard for specialized talent they cannot easily backfill. With Minnehaha County wage growth running roughly a point below national pace, internal hiring for cloud, security, and architecture roles risks losing ground to remote-first employers offering national-scale pay. Consider evaluating which infrastructure and support functions can shift to managed services or distributed contract arrangements, freeing budget to defend compensation in the specialized roles where local supply cannot meet demand.
Looking ahead
Expected: South Dakota's September unemployment figures and the Sioux Falls MSA equivalent release October 20 via BLS. A reading above the 1.9-2.1% range would be the first real signal of metro labor market loosening in over a year.
Emerging pressure point: Government employment in the metro fell 10.3% in the most recent reading. Watch whether displaced public-sector IT and network staff enter the private candidate pool, potentially easing the Network Engineer pay compression already visible locally.
Worth watching: National cybersecurity and AI engineering pay continues outpacing Sioux Falls by wide margins. If this gap persists through year-end budget cycles, expect increased voluntary attrition among metro security and data talent toward remote national employers.
Potential inflection point: Minnehaha County wage growth (3.2%) continues trailing the national pace (4.7%). A continued widening would strengthen the case for outsourcing commodity infrastructure work rather than competing on local pay alone.
Methodology
Advertised pay from active employer job postings, not survey data. WageScape's median is calibrated to correct for spurious low-value postings: distribution analysis shows roughly the lowest 10% of raw values are erroneous entries, so the reported median is the 60th percentile of raw advertised pay. WageScape observes 98% of U.S. job openings daily.
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