The global talent crunch
fortune.com
fortune.com
99% of these jobs are city based and require you to relocate. Why? If my work is all done on the internet, why can't my commute be aswell? Why should I have to constantly migrate when I have a perfectly good and happy place to live out in the country? Why isn't remote working catching on more?
All of these claimed shortages are in "IT" which is a very lose term. In Ireland for example something like 50% of IT jobs are phone tech support in foreign languages. We constantly hear of the shortages in this area - yet its low paid and generally requires foreigners to fill the roles. So why not try to hire actual foreigners? In actual foreign countries? Across the internet? Why try to hire expensively educated and irish people with a high cost of living and offer them minimum wage?
The shortage is never in qualified candidates. It's in qualified candidates willing to accept minimum wage. And if all that wasn't bad enough, foreign corporates get to pay extra low tax rates by moving to Ireland, just so they can try to screw the population out of a proper wage packet - all endorsed by the government of course.
This has been my experience as well. I moved from the Bay Area back to a place in the US with more a reasonable cost of living (in the same time zone as family). Local jobs have no clue what market rates are, or even how to hire competently (no work samples, or technical problem solving). When I try to look for remote work online, companies in both NY and the Bay Area stop the conversation when they find out I'm not willing to move. Even Hired.com, which has a location checkbox marked "Remote", asked me to delist my profile until I am willing to relocate.
How do you all go about finding remote work?
Try to emphasize that you'll be always available at the prospective employer's local time, and will be able to spend time in the office once in a few months if necessary.
Also, try to contact companies that already have remote workforce and a remote-work policy (like github).
Distributed team, with members in the US, all through Europe, China, Japan and Oz. We work entirely over email, IRC and a weekly Google Hangout.
https://careers.stackoverflow.com/jobs/remote
In my case, I answered a HackerNews job posting.
Right now 100% of my startup team is remote. There are definite advantages, but as far as we are all concerned we think the disadvantages outweigh the advantages. Why?
Because the communications mediums available still do not give the resolution we need to communicate optimally. Even with Skype/join.me/freedcamp etc... the turn around time for decision making is orders of magnitude slower with remote teams than it is with co-located teams - especially when you are on different time zones and in different continents.
A perfect example is when we wanted to implement a design and UX change on our beta website. The change came at my request after visiting a customer and went to the CTO and the design lead. The CTO started working on the back-end about an hour after I sent the message, but it was almost a day later that the design lead got the message because he was 8 hours behind. We needed some of the design pieces before the front end could be finished and tied together with the back end. About a day later the design lead finished the design and committed the change. At which point it was midnight US time so another 8 hours till the commit could be integrated. We realized we needed a slight change so we had to repeat this process. The whole thing ended up being a couple days for something that would have taken maybe two hours total had we all been in house.
These lags add up very quickly and have pushed something that would take a day of turn around to nearly a week.
Maybe face to face has higher communications bandwidth, but it doesn't automatically win in every scenario.
I've worked on teams spread across the North American continent and we had no issues with making fast decisions. Most of the time it felt like we were in the same room, since we had a skype group video chat running for 7 hours a day (at which point it would kick us off for being on too long).
IMHO, the reason remote isn't done more often is it's a hassle. You need the right tools in place. You need people with the right mindset. There are tax issues around employing people in multiple states and/or countries. There are also shipping costs involved in sending equipment around the country and/or the world. The lack of control over said equipment and the data on it... the list goes on and on. Each one is surmountable on its own, but add them together and it become so much easier to insist everybody be in the same room. Especially if it's going to be a high stress environment, like a startup.
Still, it would be nice to work from a cabin in the woods.
Bottom line: The founders/company owners/whatever MUST be invested in the company being a fully remote company. It doesn't work otherwise. If you're at somewhere where working remote is handled half-assed, I suggest departing for a place that takes it seriously. They are out there.
Disclaimer: I work for a 100% remote startup.
After digging a bit deeper into the actual numbers (when for fuck sake are they going stop grouping everyone who touches a computer under the heading "IT"?), it's mostly "developers, developers, developers".
Also, reactions on most forums are "fuck you, pay us". All perks, generational differences and cultural changes aside, this is mostly a money problem. I see so many people in jobs that where there is considerably less demand and require a lot less effort to keep skills and knowledge current earn a lot more money than developers.
Why are, with some localized exceptions like SV, developers still being paid considerably less than all reports suggest their market value is?
In other areas there just isn't that kind of money floating about to compete with (nor is there as strong a need to compete in the first place as non-SV companies aren't fighting against a hundred other tech companies for access to the same talent). So, companies pay what they pay and a dev either sucks it up or moves to SV if he/she wants to earn more.
CA as a whole receives about $15B/yr in VC. Assuming every penny of that went to engineer compensation (not at all accurate - customer acquisitions is probably a bigger line item), that would be 75,000 jobs @ $200K company cost (probably low for the Bay Area). So VC directly pays for maybe 5-20K engineers in the Bay Area.
Insatiable, rich tech companies are why salaries are high.
Quiz: If you only hire the top 1%, and the workforce grows by 100 people, how many has it grown by for you, under your self-imposed restrictions?
Quiz #2: If you are certain that it is very important to only hire the top 1%, but you freely admit that your hiring techniques are fuzzy and confuse the top 1% with the bottom of the top 10%, and you're not exactly sure what you mean by "top 1%," (see http://michaelochurch.wordpress.com/2013/09/21/dimensionalit...) are you insane for suffering no cognitive dissonance with these three ideas in your head?
Yet another bull*t article. Haircut costs perhaps $10, they give free food in homeless shelter... Luxury perk is paid accommodation, car (with chauffeur), huge private office or location independence.
So really the tl;dr is, companies want more talent at the same price.
This is not unreasonable. I know around these parts we like to think that developers are the God-Kings of the universe, but there are real negative consequences to the seemingly infinite geometric growth of developer salaries (currently, in the NYC area anyways, clocking in at least 10% a year).
And I say that as someone who is a huge, direct beneficiary of these insane salaries.
We keep complaining around here about the influence of VCs on the industry, about how everything is oriented around landing the next round of funding. That we think about runways more than we think about creating useful things.
We also complain about how founders are giving up increasingly large pieces of equity just for the capital to get off the ground, and that the dream of tech entrepreneurs changing the world is constantly compromised by all of the above.
We also complain about the power large corporations have over small businesses and can muscle them around in the market.
All of these come down to the price of developers. The more we get paid, the more capital founders will need to start companies, and the more power investors will have over entrepreneurs, their companies, and their employees.
Huge paychecks for developers only plays into the hands of wealthy investors who now consume an ever-increasing influence, and who wind up owning more and more of the fruits of innovation.
The more we get paid, the more it benefits large, established corporations, who have the mature, optimized business models to afford huge salaries, and the more we handicap small, starting businesses who do not yet have the revenue/employee to sustain high burn rates.
The more we get paid the fewer true bootstrapped companies we will see, since there is now an increasingly insurmountable cliff between "founders in a garage" and "first hire".
The more we get paid the more types of businesses will be categorically excluded from existing because they're not profitable enough to pay huge salaries. Just recently I turned down an offer from a company doing tremendous social good - the salary they offered would have been highly competitive a mere two years ago, but the market continues to inflate. I fear businesses that are highly positive to society, but not hugely profitable, will simply no longer exist in the future.
Don't get me wrong, I enjoy being paid a shitload of money to do what I love, but understand that there is a point where increased developer compensation is a net negative for us all, and that we may already be past that point.
The world is bigger than our bank accounts (sad, I know).
Wait a minute, wait a minute. Why? I mean, seriously, why? Public companies exist to fatten shareholders' bank accounts. Privately owned companies exist to fatten their owners' bank accounts. I submit that the world is no bigger than our bank accounts.
Also regarding founders giving up large amounts of equity to VC's so they can afford developers: there is a very simple solution. Give employees more equity. Take out the middle man.
That's been tried a lot and is often referred to as "sweat equity". Most people won't go for it when there's 5 jobs across the street that will offer cold hard cash which they have obtained by getting a premium on equity with a VC.
I don't understand why the natural response to "can't afford good developers" is "pay them less." Maybe the company just deserves to die.
Founders' fundraising problems are...not my problem.
How many startups offer the first few employees a reasonable amount of equity (>5%)? Most startups will offer 1% if you are lucky.
Sure, but even in that world view ever-increasing developer salaries is sacrificing your long-term interests for short-term ones.
A tightening of the ability for people to start new companies will mean fewer choices in employers down the line, and it will mean less diversity in work environments, cultures, types of work, etc. All of that works actively against you.
Increased investor influence means less authority for businesses to run themselves as they see fit. I'm sure I don't need to explain how that works against you.
An elimination of smaller businesses means consolidation of employment into fewer, larger employers, who now wield more and more power over you personally.
> "Also regarding founders giving up large amounts of equity to VC's so they can afford developers: there is a very simple solution. Give employees more equity."
Equity isn't magic. The amount of equity you have to give to make a $10K discount on salary make sense is a lot.
If you crunch the math you'll realize that even if the founders themselves are perfectly altruistic and literally take no equity, the size of team you can afford to hire with equity, at these current salaries, is very small.
And will continue to get smaller as compensation increases.
The effect is ultimately the same - categories of businesses, types of ideas, become uneconomical to explore because the cost of hiring - whether in hard cash or in equity - simply doesn't add up.
As is often the case, the common good is good for you because - surprise - you don't exist in a vacuum from the rest of society.
This is getting strange: employees have too much power, and so they will have less power? In this dark future, what is to stop Joe Dev and his four friends from starting a company while living on the piles of money they've stacked up?
Further, in said dark future where only the corporate moguls survive and have beaten-down developers shackled to their cubicles, why do the moguls continue paying through the nose? If they have so much power over developers, don't they as soon as possible cut developer salaries, allowing smaller companies to woo them away?
>Equity isn't magic. The amount of equity you have to give to make a $10K discount on salary make sense is a lot.
I can only conclude that either developers are being exploited or that we're in a bubble, then, because VC's make that exact money-for-equity trade.
>As is often the case, the common good is good for you because - surprise - you don't exist in a vacuum from the rest of society.
I would take this much more seriously if there were a Developers' Union that served to erect barriers to entry. But in fact, there's the exact opposite, with bootcamps, Khan Academy, open-source tools, blogs, and people getting jobs without degrees. I have a hard time conceiving of a less jealous profession.
I think you misread the complaints: to my ears, they are more about "how on earth is that useful" or "another company solving the problems of young upper middle class urbanites" (viz Breather [1], or the 5 (and growing!) laundry startups respectively) [2].
Finally, businesses need to reach a mutual agreement with their employees. Startups and small companies are amazingly stupid; the standard playbook for creating a business is do things big companies can't that you can because you're small, ie make your smallness a positive instead of a hindrance. Somehow, none of them are willing to do that with employees. So, for example, I'd love to work remotely. Virtually no companies are interested. I've also repeatedly offered to trade 10% of my salary for the ability to 4 weeks of vacation in a row, but no-one accepts the offer. If you choose to compete directly with {goog, fb, etc} then you're competing on their terms and will probably lose.
[1] http://techcrunch.com/2014/09/04/breather-series-a/
[2] I submit, w/o proof, laundry startups are a symptom of how shitty a city sf is. In a real city (ny) there are wash & folds near your apartment; you hand them a hamper and either pick up clean clothes or they drop them off at your apartment. No need for smartphones and deliveries and other bs.
Which is why I won't do it. It might be a symbolic gesture, but it'll also be useless.
Expecting people to take voluntary pay cuts is unrealistic, it also overlooks a fundamentally better solution: increasing supply.
Growing the labor pool is good - it means more wealth and more employment all around. It means better lives for more people (as opposed to reducing the quality of your own life for no apparent purpose). It means more people in our community, it means more technologists will exist, and a larger portion of the population will understand what we do.
I will gladly take a pay cut if it means more people have joined the fold and enjoy the upper-middle class income that was previously out of reach.
> "I submit, w/o proof, laundry startups are a symptom of how shitty a city sf is. In a real city (ny) there are wash & folds near your apartment"
Hehe, agreed on all counts. I too am of the opinion that a large number of startups exist solely to paper over what is a civic planning failure of gigantic proportions. SF is not a functioning city, it is an embalmed tribute to the 1940s, kept "alive" solely by the massive and unending injection of cash.
Growing the labor pool is far from good when the goal is what passes for leadership in the valley -- pmarca, zuckerberg, larry page, et all -- are really advocating: avoid investing in education, or growing the workforce domestically, in favor of importing cheap foreign-educated labor which can then be exploited via our pseudo-indentured servitude h1b system. Most of these folks already let their ethics show w/ their engineering wage cram-down, along with their tax avoidance schemes which reduce funds to the government which heavily subsidizes their industries via, for example, public support of education of the skilled employees.
There are plenty of good engineers available in the US. You can do any of:
hire remote employees
pay better so that people can afford to live in the valley without making huge financial sacrifices, or use your leadership role to attack any of the things (transport, nimby, lack of housing, lack of dense housing) that make living in the valley so expensive
foster an engineering pipeline and work culture that doesn't systematically exclude women (double your potential employee base alone), plus other minorities
But since they make none of these changes, I oppose any increase in visa allotments.
£50k in London may be doable for 20-somethings living in a shared apartment, but for the rest of us it's a fucking insult.
Never recovered from 2008, and I don't see it changing anytime soon. When companies can continue making more profit, they're going to keep doing so on the backs of their grunts like us.
Meanwhile we continue to try and figure out how to survive on stagnated pay with cost of living continually on the rise. I'm trying to do more side work just to pay my basic bills.
I'd say get out of IT, all the neighbors around me who are in upper levels of sales in medical/pharm/chem are doing quite well off. Companies still see IT as a cost and not a benefit and pay as little as they can, which isn't much.
The exchange rate between capital and labor (i.e. the most important economic variable in the global human society) is far out of whack. It's a 9/11-scale moral catastrophe [0] and has been for quite a while. It's at a low point, because the concentration of capital has made those with connections to it into a set of corrupt gatekeepers with more power than any government, and more than any individual and most businesses.
Anyway, possibly 90 percent of top-talent people are doing work far below their capability. Travel overseas to some poorer ("third world") countries and it's 95 or 99+ percent. I know math majors in the Philippines and even in Hong Kong (which is not poor at all) working call-center jobs.
[0] Yes, depriving billions and impoverishing a significant subset of them (obviously, the direct victims of Silicon Valley chicanery-- see the Schmidt/Jobs collusions-- are rarely impoverished themselves; but people in other countries suffer more severely from the devaluation of labor) constitutes "9/11-scale moral catastrophe". I invoke 9/11 because it started a war. Maybe this will, too.
Google's "free massages" have become a lightning rod for this sort of supposed spoiling of top technical talent. When I was there, you got one per year (on your birthday) plus one for starting out. It's not like you get free massages whenever you need to relax. It's not devoid of value, but it comes out to about $75 per year-- a tiny marketing expense for getting "free massages" out there. In other words, while top talent's approach value (and, one can derive, market value and leverage) isn't high, it isn't zero.
Right now, talent and capital exist, both, in abundance. We have shitloads of both in this world. The problem is a small parasitic set of well-connected influence peddlers and bureaucrats who've managed to become gatekeepers in access to that capital (often, passive investment capital that isn't theirs). The enemy isn't "the rich" (there are plenty of good rich people) or governments (indeed, many national governments and militaries will be our allies when we finally go to war on the global elite). It's the fact that despite an abundance of resources, a small number of players have developed, through upper-crust favor-trading rather than merit, an egregious and malignant control over their distribution. There's a term for this: corruption.
But with the number of smart people out there (especially in the poorer countries) who are working in dead-end jobs, there is definitely not a "global talent crunch". It's a corruption problem.
This. If you want to find talent for your startup, go abroad. I recently worked with a startup that needed to build some more or less straightforward business apps - mainly a UI challenge. Getting top talent for the UI portion (read: the part not doing financial calculations) of the app took about a month.
Paying "way above market" in the Pune (India) might cost you 2 lac/month (about $4k). Pay a bit above market, create a good work culture [1], and you've got talent.
(If anyone wants more info on doing this, contact me.)
Education does not equal talent. It doesn't in the West (hence, local shortage of good developers), and the same applies to the rest of the world.
The fact that the problem of the corrupt concentration of capital is real doesn't mean the lack of talent is artificial.
Filipino programmer salaries are pretty terrible (about 35k PHP per month, which is around $10,000 per year) but not all of the best are leaving. The US is pretty damn hard to get into if you're not from a family with assets. Japan treats Filipinos like shit (it's functionally impossible, and I've heard it may be illegal, to look for another job while employed, as a non-citizen, with a Japanese firm). Hong Kong and Singapore pay more than $10k, but still offer crap wages compared to the sky-high cost-of-living, thanks to third-world despots, corrupt officials, drug kingpins, and assorted dirtbags from all over the world buying real estate in those cities (as in London and New York) to launder their money. Singapore and HK are also disgustingly employer-friendly (worse than the US, not quite as bad as the Arab slave states). I know Hong Kongers who count themselves lucky to get 2 weeks of paid vacation (taking unpaid leave is very stigmatized in Asia).
I won't even get into the Arab slave states, where Indians and Bangladeshis "look like construction workers" (and won't advance) and Filipinos "look like maids" (ditto) and even Americans have mini-panic-attacks every time they write a check (an unintentional bounced check equals jail; someone should seriously fucking invade that country and liberate the people jailed for being unlucky).
Australia seems to be the hot destination for Asian talent-- nearby, not that hard to get into, and paying quite well-- but it's a small country (24 million, which makes it smaller than some Asian cities) and will not be able to absorb all of the underemployed smart people coming up right now.
I've actually been studying this, because it involves a business opportunity I'm looking into. About 30-50% of the people you'd consider "top talent" leave the Philippines. That's a lot of brain drain, but it leaves a large number who (for a variety of reasons, such as family or patriotism or preference of the tropical climate) stay. Right now, they're getting shit wages unless they can start their own business (but if your family has that kind of assets, emigrating to the US becomes a real option).
Education does not equal talent.
Sure. That is true everywhere in the world, and I think we agree on that.
The fact that the problem of the corrupt concentration of capital is real doesn't mean the lack of talent is artificial.
Talent is abundant but it's extremely difficult to find, because you have to sift through untalented pretenders with better social skills, and that's true no matter where you are in the world. (You typically need to hire someone like me who are smart and experienced enough to assess it, and we're even harder to find.) It's like dating. Decent, single $GENDER_OF_INTEREST are paradoxically both common (the bulk number of them is large) and rare (the broken people go on more dates, so adverse selection plays a role).
Why do large companies, when staffing middle and upper management roles, acqui-hire utter mediocrity at panic prices instead of promoting from within? Their middle management filters are too broken to let them spot talent at the bottom, and they become like hoarders who have copious possessions but have to buy a new coat each winter because their houses are out of order.
Talent is like fresh water. It's abundant, globally speaking, but (a) it's sometimes far away, (b) there's a lot of less-fresh water one shouldn't use or drink, and (c) there's still less of it than one might conceivably want.
Of course, I've stepped around the obvious fact that most businesspeople who complain about a "talent shortage" are just stingy bastards who can't stand the (slowly rising) price of talent.