Salary and Benefits

April 29, 2011

$90K to start: Tech talent war heats up salaries, ushers in cool perks

$90K to start: Tech talent war heats up salaries, ushers in cool perks

Keith Rabois, a Silicon Valley veteran and chief operating officer at Square, third from right, and Eric Firestone, a software engineer, fourth from right, during in a meeting with other engineers at the company’s offices in San Francisco. Companies, particularly start-ups, are offering an array of perks, including lessons in entrepreneurship, to lure whiz kid engineers. (Jim Wilson / The New York Times)


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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8 Comments

localpostgraduate on May 1, 2011 11:05 AM | Reply

Notice the lack of diversity of the people in the circle, and the fact that it is a circle (closed system). They are all male, white, ages 20-40, thin and able-bodied. It shows a very restricted idea of who is thought to be talented. The old adage still holds for women and minorities: last to be hired, first to be fired. And at the senior levels of experience the salary gap is not 75 cents to the dollar. It is women with advanced degrees unemployed and falling into poverty with men earning $135K-$160K, which is what senior level people are getting in Silicon Valley these days.

eric b replied to comment from localpostgraduate

Wait a minute ... so standing in a circle to have a group discussion is now a indicator of racism and gender bias? Even if your overall comments about gender and race were valid, and I'm not sure they are in the high tech field, it's hard to take your comments seriously.

Time for a reality check ...

desk cleaner replied to comment from localpostgraduate

but there's an asian standing in the background!

Student of Computers on May 3, 2011 10:22 AM | Reply

Actually, I disagree.

I think the lack of diversity is more a reflection of the lack of interest by women and some minorities.

There are many people of color at Microsoft, including Asians and Indians.

As a student of computer arts I find that the vast majority of people interested in becoming computer software engineers are male and that those women who are skilled tend to be hired first so a company can have diversity.

Personally, I would love to see more women programmers. But at the end of the day, I would love to see people hired based upon their merits and not silly stuff like race or gender.

Mike Mcconnachie replied to comment from Student of Computers

I agree that the lack of diversity is also a block to fresh, opinions, maturity and many other things, such as having a mentor on staff, or a manager with decades of long term contacts.

I've been hiring much differently this year, looking for solid, older people with stability and that seasoned, burnished glow of experience.

Dogfan Mcgillicuddy on May 4, 2011 7:19 AM | Reply

Localpostgraduate-you are way, way off base. Companies are absolutely clamoring for female and minority tech graduates AND experienced professionals-there simply aren't enough in the candidate pool-if that is based on some sort of discrimination or prejudice than that needs to be addressed-but the notion that minorities and females are last to be hired and first to be fired-straight up nonsense.

Payow on May 22, 2011 2:54 AM | Reply

Actually the tech field is plenty diverse. Plenty of Asians and Indians.

mandy maloon on August 14, 2011 5:07 PM | Reply

I don’t think the problem is something that can be blamed on the companies – I think it’s something that exists on a much more fundamental level. Going all the way back to high school, female students are much less likely to be encouraged to take advanced math and computer science courses, and minority students are very often “tracked” into lower level, non AP/honors courses that lead to lowered self-fulfilling expectations. As a woman with a BA in Sociology and a Masters in Psychology who has been looking for work for over 8 months now here in Seattle, I wish my college career counselor would have encouraged me to focus on a more practical choice of major like computer programming or engineering. I seriously doubt hiring managers at tech companies are flipping through resumes and suddenly screaming “Eww, another icky icky girl! Cooties!”and then frantically spraying themselves with Windex. I envision more of a Willy Wonka “I found a Golden Ticket!” scenario myself, with hot bespectacled geeks dancing gleefully around the office waving the shining golden resume high in the air, but that’s just me and too much coffee talking.

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