Monday, July 16, 2012

Tech companies wage no-holds battle for talent in staff wars

If Simply Measured hires a candidate you referred, the Seattle startup will give you an iPad 2, a $300 Amazon gift card, a bottle of 18-year-old Macallan scotch or three Nerf Guns.
The referral incentive program offered by the data analytics startup is just one way to compete with the hundreds of other tech companies vying for talent to fill the thousands of technology jobs open right now in the Puget Sound region.
The Puget Sound region is the fastest-growing area for technology jobs in the country, with a 43 percent increase in high-tech jobs in the past decade, according to a recent Forbes/Praxis Strategy Group survey.
A search for “software engineer” on the employment website Glassdoor showed more than 11,500 jobs within 25 miles of Seattle. Microsoft alone is currently looking to hire approximately 4,800 workers in the Puget Sound area.
As a result, the competition for tech workers, particularly software engineers, has led to a rise in salaries that some are warning could become a bubble as not enough students graduate ready to step into these jobs, forcing companies to pilfer talent from each other.
The average tech-worker salary in Seattle, according to tech-job website Dice, is more than $90,000 — and steadily rising. Software engineers at Microsoft make an average of $90,000, $3,000 more than two years ago, and Amazon engineers make even more, at $96,000, up $10,000, according to Glassdoor.
Google, which employs more than 1,000 people in the Puget Sound region, pays its engineers an average of $110,000, according to Glassdoor.
This growth in salaries and demand for workers does not come without challenges. Companies are offering clever incentives for referrals, large sign-on bonuses for new hires, gourmet chefs to cook free meals and all-expense-paid tropical vacations for their best performers.
The power dynamic has shifted: Now companies are the interviewees, engineers the interviewers.

Companies get creative

Five years ago, Seattle-based Cequint had eight employees. Today the wireless caller identification company has 117. Finding the right people to bring on board has not been easy.
“Seattle is a hotbed for startups, but we’re not a startup and we’re not Google or Microsoft,” Cequint CEO Rick Hennessey said.
Being neither small nor large makes recruiting tricky, but Hennessey said that maintaining a laid-back, friendly culture is at the top of his priority list. Cequint has “lunch roulette,” where everyone’s name is tossed in a hat, and five randomly drawn people go out to lunch together on the company’s dime.
It’s not the daily free lunch Facebook offers, or the gourmet chefs of Google’s Kirkland office cafeteria, but Hennessey said lunch roulette helps encourage people to know each other and to keep the company feeling like a family.
One of Seattle’s largest tech companies is also creative in the way it markets itself to potential employees. Application networking company F5 has a game room, an on-site gym and a focus on work-life balance that helps it compete with bigger companies like Google and Facebook that have the “coolness” factor.
But the company also sells potential developers a problem that needs solving.
“A good software engineer loves a good challenge, a cool thing you’re trying to solve,” saidDan Matte, F5’s executive vice president of marketing and business development.
He said the company, which has about 1,100 employees in Seattle — 2,800 worldwide — tries to sell potential employees on the team they’ll be working with and a chance to have a direct impact on exciting projects, rather than just being another cog in the wheel of a larger company.
And, if that new employee sticks around for 10 years, F5 will pay for that person to take a vacation anywhere in the world.
Seattle data analysis company Medio is expanding in what is arguably the most competitive space in the market right now: big data analytics and cloud-computing.
Medio CEO Rob Lilleness said that even though the company is at the forefront of an industry with huge growth potential, finding the best and brightest isn’t always easy. The company frequently poaches employees from other companies, something that has become an essential way to bring new talent on board for nearly all tech companies.
In the past two weeks, Medio has hired six people who hail from Microsoft, Amazon, Hewlett-Packard, Bellevue-based Infospace and the East Coast.
“Even with the wind at our sails, it’s still a major effort at Medio to identify and attract world-class talent,” Lilleness said. “We have teams of recruiters.”
And retaining people once they’re hired is also tough. Lilleness said the company is a target for recruiters looking to draw people away to other companies, and as Silicon Valley companies continue opening development centers in Seattle, competition will continue to heat up.
Google has more than 1,000 employees in Seattle, Facebook recently moved to a larger office to facilitate its growth in the area, and Twitter announced a new Seattle office last month.
For startups, it can be almost impossible to compete. For some, moving into the competition’s back yard is the best way to steal away talent.

Guerrilla recruiting

Location-mapping startup Glympse lets food trucks into its parking lot near the Amazon headquarters, in Seattle’s South Lake Union. The company changed the name of its WiFi network to “Glympse is hiring” so when Amazon employees pull out a smartphone while waiting in line for tacos, the network pops up.
“We target people at Amazon who are hitting their two-year mark because their sign-on bonuses are ending,” said Shannon Barbour, a senior recruitment manager at mobile marketing company Marchex. Barbour was a recruiter for Amazon before moving to Marchex.
Amazon’s new engineers typically receive a sign-on bonus, often around $25,000 per year for two years, which can be big enough to get people to move to Seattle, where, after a few years, other companies can scoop them up. It doesn’t hurt the competitors that Amazon has a reputation for long hours and making its developers carry pagers for after-hour emergencies.
“Startups have some really cool things to sell that can be highly attractive to developers, like the chance to work on something new,” Barbour said.
They also can offer early stock options. But it’s also about work-life balance, Barbour said, something the larger tech companies don’t always pay attention to.
“At the end of the day, people appreciate the gym membership, the rewards, but if they don’t like the people they work for, it doesn’t make a difference,” said Ring Nishioka, a recruiter for South Lake Union gaming-for-rewards marketing startup BigDoor, which has gone from three to almost 30 employees in a couple years.
He said startups sell the opportunity for engineers to have an impact on exciting new products, work in a fun environment and have a chance to learn new things in the process.
“If these guys are having fun with each other,” he said, “they’ll stick around.”
For recruiters, sourcing has become as important as recruiting.
“You don’t post on (tech job site) Dice and sit back and watch the candidates come through,” said Greythorn recruiter Nathan Ollestad.
Recruiters will scour social networks such as LinkedIn, searching for workers with the background their clients need.
But even that has gotten so competitive, it’s almost not worth it, Ollestad said.
“A lot of developers aren’t on Linked-
In anymore because they’re getting spammed by recruiters,” Ollestad said.
Greythorn has special teams dedicated to different tech sectors that read blogs and industry-specific discussion threads searching for potential hires. They go to industry networking events and chat with people in person.
“I’ve never seen a market this competitive,” Ollestad said.
Barbour agreed.
“I’ve been in recruiting for 14 years, and this is the hardest market,” she said. Even the dot-com era doesn’t compare, Barbour said, because right now the country has a deficit of developers.
However, Nishioka said engineers that are two years out of school making upwards of $100,000 will reach the top of their pay scale earlier, and could become frustrated with the stagnation.
“I hope the bottom never falls out of this,” Nishioka said. “But people can’t be expecting to make these salaries forever.”

Marketing a region

Hidden in this challenge is an opportunity, said Washington Technology Industry Association President and CEO Susan Sigl.
“The region has to take on some kind of national PR effort to entice people out here,” Sigl said. “We have this amazing ecosystem here, but the playing field is being leveled by areas that are hungrier.”
International recruiting is an option only for large companies that can afford the time and money to navigate the country’s immigration system, and Sigl said those same companies are the ones able to travel to East Coast colleges to recruit workers.
But, she said, the entire industry needs to come together to not only encourage tech workers to move to the Northwest, but also to encourage support for higher education budgets that will in turn, produce more tech workers.
“Everybody recognizes it’s the innovation of technology that will change the global economy,” she said.

Date: Friday, July 13, 2012, 9:52am PDT - Last Modified: Friday, July 13, 2012, 12:57pm PDT

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