Inside the War for Tech Talent | Hacker News Reader

Inside the War for Tech Talent

betabeat.com

89 pointsjonbot75 comments

"Though recruiters report that start-up salaries for engineers rose 20 to 30 percent in the past year and a half, to upwards of $140,000 for a developer with three to five years experience, that still leaves start-ups priced out of top talent in a city where working for a hedge fund can mean bonuses of up to 80 percent on a good year and CTOs command seven figures."

As a developer at a tech startup in NYC I always hear figures like this and they seem kind of mythical. My friends in the startup world tend to feel the same. Are there only a handful of companies paying this kind of money (Google, Gilt, Etsy, etc.) while everyone else pays considerably lower?

Agreed. At the startup I work for I went into a review asking for what I considered a bump to market level and the number I proposed, though not as high as 140 was still met with an "uhhh" type response. I was told most candidates coming in were asking for my salary range at the time or lower, and I believe them.

And by "market level" I mean what I've gleaned from posts like this.

Tip: "Market rate" is what someone else is willing to pay you. Go to your boss with a better offer from elsewhere and they will change their tune fast!

Unfortunately, management may view you as "not a team player" and pass you over for important projects if they think you may still leave.

Pro Tip: they'll give you that raise until the project you're on is completed. Then they'll give you the boot. Price/resume shoppers not only cause a lot of headaches if their success becomes apparent to others within the organization, but the bosses rarely like being held hostage to outside influencers.

In a start-up, that type of behavior is rarely rewarded in the long term as founders tend to be people who develop relationships based on trust and loyalty and who also talk amongst themselves and you'll run the risk of being blackballed. Do it once if you feel underpaid, but don't expect much upside after that.

My advice is to look for a job, consider offers and take the one that fits what you're looking for in compensation/organization. In the future, your current employer may reassess your value and hire you back at a higher scale. I've seen this happen before.

This isn't true at larger companies. At a lot of large companies, getting competing offers is one of the only ways to get substantial raises.

What I've learned from larger companies:

1. Your manager there is concerned with building their fiefdom and without a loyal crew, they know they won't succeed internally. They'll have little time for your negotiations skills and will be very unimpressed if you bring up offers from unknown starts-ups. They're a manager at a Fortune 500 company, dontcha know? It's their life and chosen career, not to mention their lifeline. You're dead to them once you leave or hint of leaving for more money.

2. Salary levels and compensation packages are designed and set by professional HR crew whose job it is to keep labor costs down and weed out malcontents. Where do they get their salary guidelines? From industry groups and consultants who specialize in companies of that size and who share that same info with every one of their clients. Good luck walking around with an offer from a similar-sized competitor. They'll be on the phone to them, probably friends, telling them what a dunce you are and you'll find your offer rescinded. Never ever mention where you're going or what they'll be paying you. Much less at a big company.

3. No matter how big or small the organization, outside of the entertainment industry, and I include sports here, very few will be willing to tolerate a disruptive prima donna for very long. Especially rank and file developers with visions of grandeur brought on by big money stories and newly acquired skills.

Like I said, present your situation to management but don't wait around for them to bring salaries into line. Some times they simply can't, you've misread the market or your importance to them. If that's the case, don't force their hand.

This is a very cynical view and hasn't been my experience.

Sorry for the cynicism, but I'm boiling it down for you without any sugar-coating.

Why is it a headache when an employee compares offers, but ok when a company tries to pay as little as they can get away with?

BTW, this only works if you're willing to leave for the much better offer. It sounded like the OP was unhappy with his pay. Nothing wrong with that. From what I've seen, though, substantial raises come from switching jobs and counter offers. If you're happy with your work and pay, then by all means stay.

What are the salaries you're hearing? It makes sense that recruiters, who are more likely to be hired by VCs who've invested millions in a start-up, would report higher rates than start-ups without that kind of funding.

The salaries I'm hearing are $80,000-$110,000 for that experience level. At venture backed startups.

Really? I can't find any companies willing to offer me anything better than $50,000 with NO benefits. I have five years of professional experience (three at startups) in pretty diverse stuff (C, Ruby, PHP, Erlang, full-stack web dev, system administration, scaling... etc.)

Where are you located?

Sorry, I should have mentioned I'm looking for remote work primarily, though I have applied to many local non-startups. I'm currently in New England, but previously lived and worked in San Francisco at venture-backed startups.

Where are you sending your resume? As a VC funded start-up in San Francisco we see lots of resumes, just not lots of great ones. And so we pay. $140k base for most positions. And we're open to telecommuting and relo. Its just even harder to find remote engineers then local ones. If your interested, ping me ;)

I'm looking for (preferably) remote work. If you have an interesting project, I am interested. :)

As I mentioned in the other comment, I used to live/work in SF. I'd ping you, but I need some contact info!

EDIT: Are you triggit.com? I also know quite a bit about advertising/marketing (CPM, CPA, CPC, PPV, affiliate, incentive, etc.) and I'd love to work with it again.

All the VC funded startups I've seen compensation for up close are in the 90-120k for what I'd consider junior to middle level non-founder engineers (half that for founders), and maybe 130-160 for individual contributors of great but not legendary caliber (i.e. not hiring Guido to do python dev for 160k, but someone who is quite good, and who could easily be a top tier consultant in that field).

These salaries (for VC funded companies after a big A, B, etc,) are about 2x of what I'd consider reasonable (which is a view based on salaries 2001-2005), but being on the employer side, if you have the money, not being willing to pay market is a dumb reason to not get the best talent. Paying market itself isn't a differentiator, but it's reasonable for an employee to be unwilling to take a substantially below market total comp package. If you don't have the cash, obviously you need to build in other parts of comp to make up for it (flexibility, being in lower cost areas, higher equity, ...), but it seems like angels and VCs value equity a lot more than employees do, and value cash a lot less, so raising more money to pay the bigger salaries isn't wrong.

Shameless Plug. My site http://jobs.usethesource.com/ is a HN-like board for technical jobs that's entirely recruiter free. From the site's "House Rules":

"Recruiters, agencies and other paid intermediaries are not welcome here. This is a peer-to-peer job site and any posting by recruiters or agencies will be killed and accounts used deleted. I have nothing personally against you, but this is not the site for you. Equally, jobs posted here are to be read and responded to by job seekers, not you."

http://jobs.usethesource.com/hrdoc

Thanks so much for creating this!

Having tried to recruit for an unsexy university staff job, I will agree that it is tough to find developers. But having been through the interview process at amazon and other "top" tech companies, it is clear that they acct (by their own admission) a high number of false negatives.

I understand why - a bad dev can really wreak havoc. But theymve gone so far, they seem like a man claiming to starve who turns his nose up at an apple with a small bruise. It feels a little insincere.

I won't hire if there's a big red flag, but I'll. Give a candidate a chance. Maybe top companies with more pull don't have to, but then how seriously should I take these stories of how hard it is to hire.

"they seem like a man claiming to starve who turns his nose up at an apple with a small bruise. It feels a little insincere"

Agreed, but I am not sure it's just these companies. My general feel of the market in Europe is: if you're looking for an experienced hire, you're not willing to train them. It feels like solid experience in a semi-related area is not enough to get the jobs in the current environment, exact experience is asked for. So small "skill bubbles" exist, with only the most desperate or broad minded taking a risk on someone without 80% experience already.

I call B.S. on most of these articles, and most of them are perpetuated by the people with the absolute most to gain: recruiters.

I couldn't agree with you more. My thoughts exactly.

There is simply no-such-thing as job training now. Even related experience often does not cut it. Companies expect to hire people with exact experience.

I've worked on teams with that attitude - and a _single_ mis-hire created large problems. Sure, you can fire people, but

a) Once you hired somebody, you already spent a lot of money on them

b) It affects team morale. No matter what skills people have, team mates still form personal attachments. Seeing somebody go is hard.

c) Firing means HR and legal need to spend a lot of time to make sure this is handled properly. So, more cost.

So, I'd rather have false negatives than false positives overall.

I think not firing someone is a much bigger hit on team morale. If someone is either doing something that affects everyone badly/not doing what they're supposed to do (causing other people to do their work), why keep them? Firing is a temporary downer; keeping someone on staff who shouldn't be there is a long-term one. If your team is great and they care (which I think all great teams do) you owe it to them to replace that person with someone who is on the same level.

Well, yes - I'm just talking about the cost of a wrong hire. Sure, if you have a bad apple, get rid of it. But it's better to ignore a few good apples if that means you reduce the likelihood you get a bad one.

Talking with friends at Google, the perception there is that the cost of a false negative is larger than the cost of a false positive. The catch is that you need to have an agile hiring process, AND actually let go of people who don't carry their weight. Most companies fail at both points especially the second, until hard times come and investors demand rolling heads.

I agree with everything you have said. A hiring manager has every right to be as choosy as he or she chooses. I've read plenty of blogs that talk about how rigorous the hiring process is at company x, how good you have to be to get hired, and how they pass on candidates that would probably be good employees because the damage of a false positive is so much higher than a false negative. All a-ok in my book.

The part that irritates me is when these companies start talking about the serious problem of a shortage of developers. I feel that if you want to throw out many people who would have been good employees, you should accept the consequences - that hiring will be very hard and you will face a shortage of your own making.

The point is, even if you desperately need people (i.e. a shortage), you are still better off avoiding false positives.

I have no sympathy for companies that bitch about how hard it is to find engineering talent if they don't operate a strong internship program. There is a Joel blog on this - the best talent graduates from university with job offers from all the places that they interned. There is no rational reason for any company that purports an interest in top talent to shy away from having an internship program. It is the cheapest hiring strategy, far cheaper than having expensive in-house or outsourced recruiters.

Joel would know. You mean this one? Or is there something more recent? http://www.joelonsoftware.com/articles/FindingGreatDeveloper...

Agreed. It's hard to find engineering talent if everyone only squabbles over the Stanford grads, for example. But what about other graduates or even self taughts? IMO companies that over value pedigree have lost the hacker spirit.

When we're talking startups or even small established shops, I can't imagine finding the time in the day (let alone the resources) to set up a "strong" internship program to supplement a handful of developers. And then teaching them a full stack, and then seeing them head back to their dorms? Odds on the company won't be around by next summer, let alone ready to reap that particular harvest.

Not entirely true. Both interns and new college hires can require a lot of work from your previously-productive employees. I've met many firms -- particularly in the finance sector -- who don't hire anyone below that 3-5 years' experience bracket. If you are willing to pay, it can really be worth it to avoid the amount of early-stage training it takes to get a young person either up and productive or determine they're not capable of growing into larger-scale development and have to manage them out.

I'm not in favor of it personally, mind you, as I did a lot of hiring across the board, but I can understand where they come from, particularly little sub-500 employee shops.

Agreed. While interns are just a piece of the puzzle, it's a great one. And when they graduate, they're also more likely to relocate than many other people, if they don't live nearby.

I live in San Diego. I hear there is a war for tech talent, but it hasn't spilled into my neck of the woods (yet?).

What is interesting to me is how unwilling startups seem to be to: - Grow their own talent internally by hiring inexperience.

- Entertain SOME SORT OF telecommuting arrangement for those not in the Bay area. Doing this would open up the rest of the West coast for '1 Week in the Office per month, 3 weeks work from home' arrangements.

- Pay for relocation. YMMV but I don't see it that often.

- Open satellite offices in areas where talent is easier and less expensive to get. The space shuttle program just ended, and there are BUNCHES of good engineers looking for something interesting to do (In Florida). Georgia Tech has a legacy of churning out smart engineers (In Georgia). San Diego still has double digit unemployment (Plus the surf is better than SF!), and there are dots and pockets of good engineering talent all across the sunbelt with cities, states, and municipalities who would LOVE to incentivize 'hot start-ups' to open an office there.

This is a case where I can see acu-hiring makes sense. Get a 5-10 person team that is already kicking ass and in an office, swallow them up for $1m/head. Boom, for the price of $10m you just got 10 engineers who already work well as a team, a satellite office that you can use as an anchor in a new geography, and an escape from the localized talent war.

Wow, Dave Carvajal, That was a name I was hoping I would never see again. I actually worked with him for a while at the ladders, and after every conversation with him I felt like I needed to take a bath to get the slime off.

There is no war on tech talent.

Or better to say, in Bay Area, there is a war to find an engineer with 15+ year experience for 80K/year. But if you pay a market price (meaning match what other companies pay), there will be no problem finding an engineer. Especially for startups. But if startup offers 80K/year and corporation X offers 120K/year + bonuses, ... you know

Maybe I'm outcast but I was told (and I believe it) that for a startup to get a good team it needs to pay market rate + stock options.

I think that's 100% correct. I have 25 years' experience and am employed making less today (in a startup) than I did then (also in a startup) in constant dollars.

Is 25 years' experience worthless these days? (I didn't sit on my technical butt, and I'd give any kid today tough competition.)

I'm tired of hearing about the shortage of kids going into STEM careers -- this just proves that the kids aren't stupid.

If there were really a shortage of engineers, their salaries would increase; since salaries are not increasing....

> In the early stages of a company, a single superstar hire can mean the difference between success and failure

Shel Kaphan, the brilliant engineer who built Amazon.com

"The nature of the technical challenge was much more straightforward than many other things that I had done in the past. It wasn’t something where we had to work for years and then find out if the thing we were building would actually work or if anybody would care.

It had a lot of pieces, some of which were not easy. Like constructing a catalog out of a lot of non-authoritative sources, none of which was designed to be easily built into a database. At that point, there wasn’t anything like Ruby on Rails or anything where you could slap together a Web site with some dynamic behavior in 10 minutes."

http://www.geekwire.com/2011/meet-shel-kaphan-amazoncom-empl...

Hire bright smart people, and then train them. Give them Safari online and the tools they need. Tell them they need to be solid in X in a week or two. Give them a simple project that will be indicative of if they've achieved the goal.

Looking for someone with 16 years of iOS experience is just making it harder on yourself.

“CTOs typically go for like $225K, with $50K bonus and 1 percent equity, but that’s rich for a small start-up,”

what do you need to do to be thought of as a candidate to be a CTO for a startup?

my brother started at Microsoft a couple of weeks ago, plan the next 10 years for him

I found starting a company and naming myself CTO was the quickest route, but your brother's mileage may vary.

I started at Microsoft straight out of college in June of 2000. Here is my last 11 years:

- 18 months @ MS. Didn't enjoy what I was working on. Didn't do particularly awesome work. Quit after ~18 months.

- Took 6 months off. Made actual friends (I moved to Seattle not knowing anyone) Went to burningman for the first time.

- Found a job at a small startup called PureNetworks on craigslist. Stayed there about 2 years. Did pretty good work, but the company didn't do so well. Management got changed over and I got fired (which kinda scared the hell out of me) after showing up to work super late one day (like 3pm) after going to Vancouver to party the night before.

- Interviewed with some random companies in Seattle including Amazon. Got referred to Google through a friend and interviewed with them as well. Ended up taking the Google job & moving to NYC.

- My GOOG options did pretty well (I started a cpl months before the IPO) but def nowhere near "fuck you money." Spent 5 years @ Google working on couple different things. Did pretty good work. Met @dens and worked on Dodgeball for a while before it got canned. Spent my last 18 months at Google semi bored kinda looking around for something new/smaller.

- After @dens & @naveen got foursquare up and running they brought me on as the first hire. Now I'm running the server engineering team (about 35 folks...and PS we're hiring! http://foursquare.jobs).

So, how did I get here? Worked hard. Picked up both small company and big company skills (learned much super valuable knowledge working on large scale infrastructure at Google) but also caught some good breaks.

Advice: work hard, learn a lot about a lot of different things. Network like hell. Networking will get you good breaks. It'll also help you recruit once you're running a team. This is vital. Keep a file of every smart person you ever meet in your whole life. You won't regret it.

-harryh

I'd love to hear your advice on how to network.

I'm smart, I work hard, and I'm very willing to open discussions and help people out when I can. I try to be a good person. I don't know if this is "networking". I guess it is, but the truth is that I haven't a fucking clue if I'm doing it right. I know I can program, but I feel like technical skills are ultimately less important (past a certain point) than social skills. Technical skills hit a ceiling without vision, and vision is useless if you can't sell other people on it.

There is certainly a war in the bay area for skilled iOS developers. We're a small startup and pay market to above market rate, relocation expenses, sponsor H1Bs, hefty options, cater awesome lunches, offer mentorship... whatever is takes basically and even finding an engineer that has done more than create HTML5 apps is a daunting challenge.

I've been halfway through negotiations to steal away someone from Google only to have Google turn around and offer the person a truly ridiculous bonus.

Recruiters call one of my iOS engineers daily (he routinely wins all the major hackathons) and he always asks them if they're willing to take on new clients since we need engineers too and they almost always reply that the have all the clients they need.

I found this article linked within on the cult-like hedge fund Bridgewater Associates that subscribes to "radical transparency," pretty interesting as well: http://nymag.com/news/business/wallstreet/ray-dalio-2011-4/

"Transcendental Meditation informed his belief that a person’s main obstacle to improvement was his own fragile ego; at his firm, he would make constant, unvarnished criticism the norm, until critiques weren’t taken personally and no one held back a good idea for fear of being wrong."

You might want to pick up the current issue of the New Yorker. It's got a lengthy profile of Ray Dalio and Bridgewater.

This whole article makes me feel incredibly underpaid. I'm not underpaid for a developer working in London for a year, but, honestly, I wonder how easy it would be to emigrate to the US for these kinds of job opportunities. Anybody know?

I think recruiting top talent isn't that bad, but sourcing it is brutally difficult.

I don't really believe in the so-called war for tech talent, or at least companies don't act like that. I'm in a bad mood this morning, so let's name names:

Facebook: if you live in the bay area, even if you live in SF, they refuse to do a phone screen, instead demanding that you drive to Palo Alto one to two times for one hour interviews in lieu of phone screens. Between the hours of 10am and 4 pm. So basically they demand that you take 1-2 1/2 days off work before even interviewing for real. Even if you don't have a car and have a leg in a cast, they don't budge. Of course, when you tell the recruiter fine, you're withdrawing, then they're flexible about doing things over the phone. NB: for those of you not local to the bay area, while Palo Alto and SF are considered to be local to each other, in practical terms, particularly if you're not familiar with traffic on 101, it's a 75 minute drive each way to be sure you'll get there on time.

Twitter: sit on resumes for two weeks, even if you were referred by an employee.

A9: also sit on resumes referred by an employee for 2 weeks.

The point of this whining is companies certainly don't act like they're in a talent crunch : shrug :

They care even less if you don't live in California. I get recruiter emails about once a week (usually from/for some HTML Canvas thing) and all it takes to scare them away is to mention that I don't plan on leaving New Hampshire in the near future.

If its a war for talent, even niche stuff like Canvas, they're not trying all too hard.

True. You'd think that rather than spending all that money on paying ever-increasing salaries to a small pool of people that just keep getting poached from one company to another, they'd take a few million and open a dev center in, say, Alabama. Would likely get a much better ROI, and a longer-term strategic benefit over competition. But alas, it's apparently smarter to go to Tel Aviv to find a CTO and move him to New York than it is to look in Nashville or Houston for someone with CTO skills.

Especially considering the payroll costs would be much lower in Alabama. Never understood the reasoning behind everybody wanting to be located in the most expensive places in the country. Internet connections are available in the South you know.

If you are a designer or developer and moved to the Bay Area or New York City, chances are, you are a very driven person.

Or perhaps you're a lemming who follows the pack? Not saying everyone who moves out there is, but judging someone's character by their ability to change geography in the same country isn't a great idea.

Right, exactly. I moved from NY to the Valley shortly after college, mainly because I was looking for something different, and the west coast interested me. Having a thriving tech scene was just a bonus. Now I live in SF because I love it here. If I really wanted to, I could be just as successful back east. I endure the high cost of living because I like the area, not because I'm driven or ambitious or something (which I am, sometimes... and sometimes not).

Maybe you just like cities and prefer the available amenities to additional space?

Perhaps, but I think there is a level of determination that makes people endure the hardships that come with living in very expensive cities. Often that is to grow their career.

I think it's a chicken/egg problem. Everyone goes to these hubs because that's where the jobs are. Jobs stay there because that's where everyone is.

My parents were enticed by a job offer to move out of the SF bay area. The offer was better money, and all moving expenses paid, but they ultimately declined. Their reasoning was that for their type of jobs, the SF bay area was the best place to be unemployed. So they stayed.

Money aside, it is much easier to get someone from the south to move to the coasts than to get someone from the coasts to move to the south. This is especially true if you are not white, male, straight, and protestant. While I'm sure there are some awesome black lesbian atheists in Birmingham, those of us who are from outside the area are quite wary to move there.

My home (Arizona) has a similar reputation now with the SB1070 flap, and make no mistake, it has hurt recruiting.

Money aside, it is much easier to get someone from the south to move to the coasts than to get someone from the coasts to move to the south.

As someone who just moved from a nowhere town to Austin, and managed to bring three people with me, this is very true.

Hell, I'm white, male, straight (ok, and an atheist), and I wouldn't want to move to the South...

But face it, there are significant "network-like-effects" in places like Silicon Valley. The talent (and money) tends to congregate. Not saying there's no talent, or strictly lesser talent elsewhere, but you can't argue with reality.

As a person who worked at a company that has expanded to a couple other cities, the problem is bringing the culture of the company to the satellite office and ensuring that such an office has enough of talent pool to make that investment. Having top leaders willing to move from a place like the Bay Area to smaller towns to help the transition is not always that easy.

Certainly it's not easy, but aren't most of these companies all about "putting in the hard work" and whatever other cliches you can come up with? "We're gonna change the world!" (as long as I don't have to change my ZIP code, or get a different cell phone provider, and as long as you uproot your entire family, move across the country and come work for my fifth startup).

I totally understand it's not an easy thing to do, but many things in life that are worth doing aren't easy.

The thing that works, in my experience, is where employees/founders have pre-existing personal ties to other areas (e.g. I'll recruit personally at MIT for my startup, and probably up in Seattle, and possibly via some connections in Cambridge, Berlin, and Montreal); it's a lot easier to bridge the cultural issues that way. Then, ideally, relocate to where the startup is based (i.e. Mountain View, Ground Zero), but allowing wfh/remote or setting up an office if there happens to be a key person or a group of people there.

no Facebook will do phone screens at least that was what I was offered several weeks ago..but maybe it depends on the dev area..my specialty is mobile dev client native..

SF to Palo Alto takes me 30 minutes on Caltrain...

35 mins on the baby bullet and 46 mins on the local, according to the weekday timetable: http://www.caltrain.com/schedules/weekdaytimetable.html

Maybe station-to-station. How long does it take door-to-door? (I'm pretty sure FB isn't in downtown Palo Alto any more, so it's non-trivial).

I've heard there's a shortage too but I doubt it by the way big companies are acting. I think that just about the only thing they are short of is recruiters!

I've contacted a whole bunch of companies (the usual) and not heard back either way. Probably because they see I'm in the UK but if I've taken the time to write in about a job they posted, the decent thing to do is to reply either way.

There is no such thing as a shortage in a market economy; it's an oxymoron. (There may occasionally be short-term demand / supply imbalances but the market quickly finds a clearing price.)

Irish potato famine? Droughts?

Not every good has elastic demand.

Famines are almost universally caused by political failures rather than by actual food shortages. For example we have seen wars where the combatants routinely confiscated food from civilians and prevented delivery of relief supplies. Or misguided governments have imposed price controls which acted as a disincentive to increase production. If you don't have a free market then obviously shortages can persist a long time.

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