April 29, 2011
$90K to start: Tech talent war heats up salaries, ushers in cool perks
New York Times News Service
Eric Firestone began a new job at a Web startup in March, and he’s already thinking about what he might do next. But that’s just fine with his new employer.
The San Francisco company, a service to turn cellphones into credit card readers, lured Firestone from Apple with an unusual pitch: It promised to give him weekly lessons about starting his own business, including how to find venture capitalists to finance it.
Firestone, a 28-year-old software engineer, said he could try to get financing for a startup now, “but I feel like I’d be having a hard time. Here, you get to learn.”
Computer whiz kids have long been prize hires in tech hotbeds such as Silicon Valley and Seattle. But these days, tech companies are dreaming up perks and incentives as the industry wages its fiercest war for talent in more than a decade.
Redfin, an online real estate brokerage in Seattle, sets up one-on-one meetings between recruits and venture capitalists on its board to talk about starting their own companies. It also runs twice-monthly classes on entrepreneurship — a perk that Redfin says has helped attract and retain recruits.
“It helps people stay, but also helps them to go,” says Glenn Kelman, Redfin’s chief executive.
In Silicon Valley, free meals, shuttle buses and stock options are common tech-company fringe benefits. Game maker Zynga dangles free haircuts and iPads in front of recruits, who are also told that they can bring their dogs to work.
Path, a photo-sharing site, moved its offices so it could offer sweeping views of the San Francisco Bay. At Instagram, another photo-sharing startup, workers take food and drink orders from employees, fill them at Costco and keep the supplies on hand for lunches and snacks.
Then there are the salaries. Google pays computer science majors just out of college $90,000 to $105,000. That is so far above the industry average of $80,000 that startups cannot match it. Google declined to comment.
Last month, Microsoft announced it would increase compensation and convert some stock awards to cash to stay competitive in the job market.
“The atmosphere is brutally competitive,” says Keith Rabois, chief operating officer at Square, where Firestone works. “Recruiting in Silicon Valley is more competitive and intense and furious than college football recruiting of high school athletes.”
As the rest of the country fights stubbornly high unemployment, the shortage of qualified engineers has grown acute in the past six months, tech executives and recruiters say. In Silicon Valley and other tech hubs such as Seattle, New York and Austin, Texas, startups are sprouting by the dozen, competing for the best engineers, programmers and designers. At the same time, companies are seeking ever more specialized skills.
Colleges rarely teach newer programming languages like PHP, Ruby and Python, which have become more popular at young Web companies than older languages such as Java, says Cadir Lee, chief technology officer at Zynga. Other skills, including working with large amounts of data and analytics, can be acquired only at a few companies.
“There are few programs that actually teach those things, and yet that’s the primary people we hire,” Lee says.
And there has been a psychological shift: Many of the most talented engineers want to be the next Mark Zuckerberg, not work for him.
Shannon Callahan, who recruits engineers for venture capital firm Andreessen Horowitz’s portfolio of companies, said a third of the engineers she calls ask for financing to start their own companies instead.
“They have that entrepreneurial spirit, and you want to talk to them because you know they’d do great in a small environment working a million hours a week,” Callahan says. “But those folks are saying, ‘Actually, I think I want to do my own thing.’ ”
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