Tech firms shell out to hire and hoard talent

http://www.economist.com/news/business/21709574-tech-firms-battle-hire-and-hoard-talented-employees-huge-pay-packages-silicon-valley

by prostoalex • 10 years ago

107 127 10 years ago

economist.com

mc322• 10 years ago

Since a few of these firms already over-hire for positions (where talent is underutilized), can we expect eventually it will morph into hiring people to simply keep them from being available to competitors and thus pay some people to simply stay home?

So cut-throat.

afarrell• 10 years ago

This only makes sense if hiring people who are truly unique. For this, I imagine the strategy would be to put them into R&D rather than have them get bored and quit.

eitally2• 10 years ago

Actually, for Google and several other companies, it's reasonably well established that if you're a high achiever who gets bored and quits, the door is always open for you to come back. Supporting this revolving door is a smart thing for companies to do, and some (like Cisco) have even codified the practice.

http://www.businessinsider.com/why-cisco-showered-three-men-...

amscanne• 10 years ago

I'm sure that this is already a factor in some cases.

As the article notes, companies are likely to maintain lists of specific companies they don't want people moving to and will offer retention bonuses to prevent it.

exBarrelSpoiler• 10 years ago

It's been said that's why Google hires the best of the best, only to assign a lot of them to do mundane tasks like A/B testing and the like.

mc322• 10 years ago

But that gets very boring so then you have people whiling time away talking for an hour about the best way to grind and then pour drip coffee or what the best spoon they ever used was and citing studies to explain their preference for the most mundane things [I use this rice paper because I read over at blah that it's the best given the weather conditions and water mineral content at growing location and our local humidity and...]

arcanus4• 10 years ago

"Google, Facebook and Amazon alone probably hire around 30% of all American computer-science undergraduates, reckons Roelof Botha of Sequoia, a venture-capital firm."

This is far more pervasive than the cream, they are getting at best the top third. That is just high demand for programmers, not a talent war.

OilDerek• 10 years ago

And with a single quote, all of my worries about finding a job after graduation disappeared. That is amazing.

utnick• 10 years ago

There is no way that is even close to true

sadface• 10 years ago

Maybe 30% of graduates of top 30 universities. There are lots of CS grads from lower ranked schools that are definitely not getting fought over by the likes of Google/FB/Amazon...

elcct4• 10 years ago

They get the best who _want_ to work with those companies.

JamesBarney• 10 years ago

For anyone who is looking for a since of scale. There are only around 52,000 total employees @ Google, and there are 3 million+ software engineers. So this quote is either out of context or wildly inaccurate.

kafkaesq2• 10 years ago

around 30% of all American CS graduates

That can't be right -- various sources but the number of CS graduates at 40,000 per year. So that'd be 4k CS hires (apart from math and other engineering hires) per company, per year. Sounds a bit high. But like a lot of other things VCs say, it's probably not meant to be taken "literally".

20years3• 10 years ago

"Some startups are already moving elsewhere to hire cheaper engineers and reduce other costs. They don't have to go very far from the Bay Area, perhaps to southern California or other states."

^This. Or hire remote, which is a perk in itself.

meritt2• 10 years ago

One big hurdle to hiring remote (we're 100% remote) are the significant expenses each time someone from a new state joins our team. All sorts of new taxes/fees/fines/paperwork, suddenly we have nexus in StateN and they want to tax our revenue or income, and providing health insurance has proven to be really difficult on a per-state basis. And that's without going down the path of hiring someone remotely out of the country. Fully remote is awesome, but there's definitely a lot of incentive to do so using only contractors.

If someone wants to start a company focused on streamlining the hiring & benefits process across state or country lines, I think that would go a very long way to increasing the remote-only attitude among startups.

emilburzo2• 10 years ago

And that's without going down the path of hiring someone remotely out of the country.

That's weird, none of the US startups that hired me (I'm from EU) complained about it.

They actually complained more about the wire fees than anything else :)

Maybe it's because I'm setup as a one-man-company in my home country?

The way I'm setup, it's actually less paperwork for me if the company is outside the EU -- which is why I prefer those.

20years3• 10 years ago

Oh wow! I have only hired remote employees within my own state and contractors out of state. That does sound like an entirely different level of challenges. How many employees do you have within your own state vs out of state?

Rezo• 10 years ago

A PEO like TriNet can typically manage it all for you (for $$$ though).

I personally prefer to pick each service provider separately. For example, a payroll processor like Gusto will handle all the onboarding forms (W-4, I-9, W-2, state new hire reports), state insurance compliance, fed and state payroll taxes in all 50 states. TaxJar figures out and reports sales taxes in all states. Guideline for 401Ks etc. Healthcare is definitely still the most problematic one.

Yes, it could be easier and more streamlined. However there's already some great services that can make hiring in multiple states easier.

venomsnake2• 10 years ago

I am out of the country (US). Worked remotely with US couple of times. NDA, contract governed under California law with mandatory arbitrage, send invoice, give IBAN, collect swifts.

Or he can start one man ltd corp in his country and make company-company contract. It is mostly a matter of will.

gaius4• 10 years ago

Or hire remote, which is a perk in itself

How is it a perk? You provide your own equipment, give up some of your personal space, do your own support, the company saves on rent, cleaning, utility bills, equipment, furniture, security... and they convince you its such a perk you should be paid less too! Remote workers should be more highly paid! The boss is laughing all the way to the bank!

20years3• 10 years ago

Good remote companies will provide you with equipment, pay you a competitive salary and provide you with support. Ones that don't are probably best to stay away from. Similar to non-remote companies who pay below going rate but try to entice you with ping pong tables and other perks ;)

Remote isn't for everyone but is a perk for many.

jackmaney5• 10 years ago

Who the hell works for a company (remotely or not) and uses their own equipment? I'm not a lawyer, of course, but a developer exposing their personal system to company data could be a significant liability risk to the company.

In particular, my last employer gave everyone the option to use an app[1] for easy access to email on their personal phones. I refused to install it, since it gave my (then) employer the ability to remotely wipe my phone at the press of a button.

[1] https://play.google.com/store/apps/details?id=com.good.andro...

emidln• 10 years ago

If someone agrees to providing those things themselves, hopefully they increased their rate to match. If not, take it as a lesson in negotiation for the next time.

As always, your rate is only ever as high as you set it.

venomsnake2• 10 years ago

Save 4 hours of London commute daily ... I know that diversity is in vogue - but the diversity in "days since last shower" on the Underground can get tad too much for my nose in rush hours.

WalterBright• 10 years ago

Saving on the commute time and costs is a big deal.

thesimpsons10222• 10 years ago

>Google, Facebook and Amazon alone probably hire around 30% of all American computer-science undergraduates

that is so wrong i don't even know where to start.

FT_intern• 10 years ago

I think it would be accurate if it's 30-40% of top American CS undergraduates.

I'm estimating the percent of all American undergraduates hired in those places to be ~5%.

thesimpsons10222• 10 years ago

yeah i agree.

CalChris2• 10 years ago

Let's see. Department of Labor says there were 55,367 bachelors in computer and information sciences in 2013/4.

http://nces.ed.gov/programs/digest/d15/tables/dt15_322.10.as...

.3 * 55367 = 16610 or about 5000 per company. Google employs 57,100. Facebook employs 12,691. Amazon employs 132,600. It's hard to say how many of those are CS grads. Yeah, count me as incredulous.

spyspy• 10 years ago

There's no way any of them hire 5000 newly graduated programmers every year.

nappy-doo• 10 years ago

The people who get rich in a gold rush aren't the miners, it's the people who sell the shovels.

I ask HN, who are the shovel sellers in this goldrush? Is it the tech superstars who can "touch millions", the VC, the founder? Who is hocking shovels in our current scenario?

SteveNuts4• 10 years ago

Also, recruiters take a huge chunk of the hourly pay/salary of candidates they place. I was offered a job that paid "$90/hour" but I'd see about $60 of that. That means the recruitment agency would make about $60k per year off of me, all while not really doing anything but checking in monthly with me.

Not sure what it's like in the SV but here in the midwest I know a lot of people are hired through third party recruiters, and even a small team can place hundreds of candidates per year.

EDIT: Sorry for the confusion, in this case I have no idea why the recruiter revealed the "true $ amount" to me, rather than just the amount I would make.

They wouldn't be taking the $30/hour from me, they'd be charging the company I'd work for obviously.

99% of the time you only see the amount after the agency takes their cut.

jackmaney5• 10 years ago

Reputable recruiters charge employers, not candidates. Any so-called "recruiter" who takes their cut directly out of your salary (as opposed to charging the employer a percentage of a candidate's salary in a lump sum payment) is a con artist. Period.

dxhdr• 10 years ago

Uh, what? I thought companies pay the recruiters a percentage of first year salary, or a flat fee, for the successful referral. The employee should not be paying anything.

walshemj10• 10 years ago

that's a w2 subcontractor not a real job or a proper self employed contractor role

meritt2• 10 years ago

The companies who create new technologies (mongodb, docker, nodejs, mesos, etc) and the companies who provide infrastructure or support around those new technologies (aws, azure, google, any number of consulting firms).

The vast majority of startups would be just as successful using prior models of the shovel, but people love to be on the bleeding edge and take the stance that their business model couldn't exist if it weren't for NewShovelX.

jedmeyers• 10 years ago

who are the shovel sellers in this goldrush?

Property owners, who get to rent out their houses and complain about how millennials ruined everything?

CalChris2• 10 years ago

Long term property owners who benefit from Prop 13 to be precise. John Arrillaga, Stanford grad, saw the Valley for what it was and bought property. And kept it. Google rents from Arrillaga just as Sun did before. Prop 13 locked his commercial property taxes in at 1978 levels.

elcct4• 10 years ago

Oh yes they are milking that cow dry

aphextron• 10 years ago

Who is hocking shovels in our current scenario?

AWS/Azure

NTDF9• 10 years ago

- Property owners

- Restaurants, bars, night life sellers

AWS is more like SUN microsystems, selling infrastructure, whose subscription will dry up (or at least slow down in a bust cycle).

abc_lisper2• 10 years ago

I don't see it as a problem as an engineer living in bay area. If not for my current employer, there is no way I could afford a home here.

Having said that, this feels like somebody got butthurt that they couldn't find cheap labor who will work 80 hours a week. Tough luck!

arcanus4• 10 years ago

this feels like somebody got butthurt that they couldn't find cheap labor who will work 80 hours a week

Precisely. The article acts as if employees receiving excellent compensation is bad, yet cannot put its finger on why.

Meanwhile, a few guys were paid millions of dollars to play baseball last night.

prostoalex• 10 years ago

yet cannot put its finger on why

They do, down towards the bottom:

"The rising cost of talent has also pushed up the level of funding startups need to raise. The idea that it is cheap to launch a firm is a myth, says Evan Williams, who co-founded Twitter and set up Medium, an online-publishing platform. “It’s harder and more expensive than ever to make a startup successful.” The more money young companies raise from investors to pay their employees, the harder it is for them to break even or become profitable."

a few guys were paid millions of dollars to play baseball last night

Which significantly raises the bar on entering the baseball team market. The world is unlikely to suffer from the shortage of baseball teams. Shortage of new tech companies does seem to have stronger negative effects on the economy.

parennoob• 10 years ago

As I often keep saying, this is at the root of the "Group X/Y/Z is underrepresented in Tech" problem. You can't make tech attractive to a broad segment of the general populace if it isn't attractive to, well, the general populace.

Some guys get paid millions of dollars to play baseball, and generally the American public seems okay with it. That is why you probably won't have a problem with diversity if you make a baseball team in your neighborhood. But hit pieces like this show that the American public in general distrusts the idea of "nerds" getting respected and paid a lot. This is going to translate into fewer people being comfortable with joining that distrusted group, i.e. tech people.

jpeg_hero2• 10 years ago

Well, for the sake of argument. Two downsides:

1) warehousing: as an engineer you are on ice in an insignificant project in the bowels of one of these tech chaebols but are locked in with golden handcuffs. Some people find that soul crushing, some are perfectly content with it and just focus on raising their families and hitting personal finance milestones.

2) Disconnect from true value-add. As horded talent at one of the tech chaebols you're not paid on your direct value add, but rather your value is in context with higher more nebulous corporate goals. One day one of the corporate game masters decides your initiative is no longer a strategic play, and you are axed. One thing sv engineers often don't consider when they say they want Wall Street like comp, is Wall Streeters have a very mercenary and "live by the sword / die by the sword" existence - there are tons of guys on Wall Street making a million a year and if they lost their current gig they'd never work in the industry again. This works for many people, but others hate it.

Some things to consider.

chucksmash• 10 years ago

there are tons of guys on Wall Street making a million a year and if they lost their current gig they'd never work in the industry again.

Can you elaborate on this? Why might that be the case?

wolfgke3• 10 years ago

Where is the problem? If one founds the company in the Silicon Valley, one has to pay the salaries that are usual in this region. There are lots of places on earth where you can get cheaper engineers; and they will even often be satisfied with lower salaries when the living costs, particular the housing costs, are much cheaper, too. Since what you, as an engineer, are interested in is the difference between salary and necessary expenses.

HarryHirsch• 10 years ago

You are also be interested in time between jobs, that's where the real problem lies. In Dallas, during the last downturn, you'd be looking at 6 - 12 months, in SF it was more like 3 months.

crdoconnor3• 10 years ago

“It’s gone too far,” says one venture capitalist

I bet he wasn't quite so outraged at the illegal wage fixing cartel.

gedy• 10 years ago

If there were more decent housing to rent and buy within a short to medium commute within the Bay Area, I and plenty of other engineers I know would gladly relocate to there without insane salary requirements.

xenadu022• 10 years ago

I really wonder why the tech companies and startups don't pour money into lobbying, grooming candidates for public office, etc. Spreading the cost over many companies would make it much more feasible.

Lower housing costs would slow salary increases and make recruiting easier.

Maybe they think the increase in infrastructure (requiring taxes) and lobbying costs would be more than they would save?

Or maybe they see their personal property appraisals increasing and decide not to do what's best for the firm?

crdoconnor3• 10 years ago

Google is building its own housing (and fighting to do so). We're seeing the return of company towns.

I don't think they're interested in lowering housing costs for the whole valley though.

jim-greer• 10 years ago

"It’s gone too far,” says one venture capitalist...

This investor is probably making more than the vast majority of the people building technology. It's not clear to me why society benefits from that.

High salaries encourage young people to enter the field. That's a good thing.

High housing costs are another matter...

arcanus4• 10 years ago

A VC complaining about overpaying someone does admittedly speak to their core-competency.

sfaf• 10 years ago

A pretty ridiculous statement given that a VC pays close to 20% income tax while these well paid engineers are taxed at almost double that %. The VCs carried interest tax loophole has gone too far, not market competition for engineering salaries (which was previously priced fixed through non-poaching agreements).

"The engineers are getting paid too much so my startups can't convince them to work for equity because of the free market while my entire industry avoids paying taxes and stiffs America." Cry me a river, vc.

wolfgke3• 10 years ago

A pretty ridiculous statement given that a VC pays close to 20% income tax while these well paid engineers are taxed at almost double that %. The VCs carried interest tax loophole has gone too far, not market competition for engineering salaries (which was previously priced fixed through non-poaching agreements).

The problem rather is that it is (from bureaucratic-legal-financial overhead) hard for an "ordinary" person to become a VC. That is where you should demand change for more justice.

walshemj10• 10 years ago

Note that the VC didn't go on record other wise his firms might get boycotted which would be no bad thing

wolfgke3• 10 years ago

This investor is probably making more than the vast majority of the people building technology. It's not clear to me why society benefits from that.

I think if smart people get enough money to found companies, which at the end deliver products people want (otherwise they wouldn't give their money etc. for it) and new job opportunities for prospective empolyees (people would not take the jobs if they had better opportunities), society clearly benefits.

gist• 10 years ago

Google, Facebook and Amazon alone probably hire around 30% of all American computer-science undergraduates, reckons Roelof Botha of Sequoia, a venture-capital firm.

What kind of bullshit is this? "Reckons Roelof Botha". Number coming out of his ass with no basis whatsoever. Not even a meaningless study to back it up.

temuze• 10 years ago

Maybe true at Stanford or a top school?

stale20022• 10 years ago

Yeah, I went to CMU, and 30% sounds about right to me.

acchow2• 10 years ago

This article is of remarkably lower quality than is typical for the Economist.

elitro• 10 years ago

I see nothing wrong with paying premium salaries for premium talent.

I'm not in the know here, but if i'm allowed to throw my 2 cents, i feel the article focuses too much in money as the only way of attracting talent. Maybe smaller companies can attract top talent with different strategies? Remote work option, family benefits (health and education packages).

Some creativity would have to be thrown in the mix, but going the extra mile could play a big role in getting people's attention.

BurningFrog• 10 years ago

Smaller companies attract me by the absence of bureaucracy and the ability to get a lot of productive work done.

pc86• 10 years ago

Benefits cost money too, in a lot of cases certain benefits may cost more than just increasing the salary. Obviously this isn't the case for remote work but certain healthcare benefits could absolutely eclipse higher salaries.

lordnacho3• 10 years ago

If you want some resource as an ingredient to your business, you have to pay for it. The price mechanism is what society uses to decide where the resource goes. It may well be that it's better (by whatever definition) to send these people to work in the large firms rather than startups.

Wrt startups, it's also a signal that this is perhaps not where value is, ie turning coders which are already expensive into some product which needs to be even more valuable. You could for instance start a business that takes unskilled labor and turns it into something else offering high ROI. It's just a matter of developing such a business.

The fact that it's expensive also skews the founding teams towards having coders. Which IMHO makes it more likely they'll succeed, at least in coding intensive businesses.

As a coder I'm not so worried. For the moment it appears demand is outstripping supply, and I'm somewhat sceptical that the marginal supply is particularly good. The first guy to sign up for CS really, really wanted it. The last guy, he might be smart, but he was just as likely to go into management consulting or banking. And coding in particular seems to reward people who have real interest. I'm sure a lot of other fields are like that, but coding especially so. You're sitting in front of a machine that allows you to practice and look up advice 24 hours a day. Other fields are typically limited, eg you can only practice sports for so long each day. That will tend to advantage people who are interested, rather than those who need a paycheck (which isn't a terrible reason either).

forgotpwtomain• 10 years ago

You're sitting in front of a machine that allows you to practice and look up advice 24 hours a day.

I don't think you become a better coder by going on sleepless coding sprees. Sure, sometimes its necessary and productive - but over all I think it has as little impact on your development as an engineer as a researcher binge reading academic articles (sure, sometimes you need to when approaching a new area/problem) but I don't think that's what defines you as a researcher either.

the_watcher• 10 years ago

This article seems to imply that Facebook, Google, etc are behaving nefariously in offering high compensation to employees. Startups have always been at a disadvantage here, and employees should not be made to feel poorly for looking after themselves first.

acchow2• 10 years ago

The price of housing plays a part in pushing up salaries.

I'm 100% sure it's the other way around.

crdoconnor3• 10 years ago

It's probably a bit of both. After all, people do leave/not come to SF because of the housing costs and that restriction in the supply of labor will naturally push up the price of labor that does live there.

xenadu022• 10 years ago

Translation: hey all you other crabs, LOOK! One of you is making it out of the bucket! Pull them back!

Am I the only one who has started to see media hit pieces for what they are? One way to lower personnel costs is to make it socially unacceptable to attempt to profit from a business transaction (aka job).

People were angry because Wall St bankers raked in bonuses while the economy tanked, Wall St got a massive bailout, and people were losing their houses.

Silicon Valley isn't looting people's retirement accounts and doesn't need bailouts. The money is also spread slightly more equitably than Wall St (individual companies vary of course).

walshemj10• 10 years ago

And I recall a discussion on here where some one heard two transplant surgeons discus how one only made 10M

nunez• 10 years ago

Well if their market is such that one might make 10MM while others make 20-30MM, then it's a valid concern. It might not be one that many can relate to, but that doesn't undermine its validity.

exstudent2• 10 years ago

Yes, it's becoming unrelenting. On the one hand you have pieces like this lamenting the "high" pay of engineers. Nevermind how much value they add or CEOs that make orders of magnitude more money. On the other we have articles like the one yesterday saying how _so many_ qualified women are being passed up on engineering positions due to the patriarchy (technical interviews) -- directly contradicting this article stating talent is being aggressively hoarded.

There's a push by the media and investors in every direction to lower engineering salaries (through shame or increasing the supply of engineers). Some is profit motivated, some is probably motivated by jealousy but together there's a theme that engineers are in some way privileged and undeserving of what they earn. Given how incredibly difficult and time consuming it is to become a good engineer I suspect all this whining will not accomplish much.

walshemj10• 10 years ago

Yes the other professions don't like it when us greasy engineers start getting a slightly bigger share of the pie.

And remember the Economist is a UK publication and the status of engineering is now where near what it is in the USA

walshemj10• 10 years ago

equating stock options to to a wall street bonus is just silly bonus are 100% cash I bet the amount of options that actually are in the money is no where near 50%

swalsh• 10 years ago

They actually talked about stock grants, which is pretty close to cash.

walshemj10• 10 years ago

Apart from taking account of the time value of money,dilution or being forced out and lose any unvested stock.

mamcx• 10 years ago

I have talk to some of the people that try to push the startup scene here in Colombia that the day some good VC come here, them will sweep with all the talent for a dime (from the POV of USA).

The thing is that too much is centered around a few spots. That increase the "scarcity perception" because them are in a island and don't look across the ocean.

Futurebot• 10 years ago

In order to be a developer you have to:

- Be willing to sit in a chair for 8-12 hours a day, staring at characters on a screen, paying attention to tiny details that would drive many non-devs mad, and work in deeply-focused, high-concentration mode

- Be willing to keep with the latest technology trends on your time and often on your own dime. For many people this means essentially jettisoning the idea of a healthy social life

- Have the financial resources, talent, and drive to get through challenging academic material for 4-8 years at a university or spend all your free time teaching yourself everything you need to know, which can even harder, meaning again, no healthy social life

- Live in an area with an incredibly high cost of living that only gets higher each year (occasional pullbacks notwithstanding.) This can mean spending 30, 40, even 50% or your income every month just on rent or living with a gaggle of roommates through your twenties, thirties, even forties.

- Be part of an industry that, despite fierce competition for talent, will decline to hire qualified candidates on that basis of age, perceived "poor culture fit," having attended a "bad/wrong" school (or no school)

Devs are also value multipliers; they're worth more than some marginal value. When you hire a dev, you're hire them to bring in 2,3,5,10 times what you're paying them in value, not 120k so that they can bring in 130.

The fact that devs are paid high salaries is good and makes perfect sense. It's part of the reason doctors are paid so much (and if we were really fair, currently underpaid professions that are similarly demanding would be paid far more than they are now.)

Now, the "this hurts startups" issue is something to be concerned about, but not at the expense of workers. What can be done here?

- Get used to needing more VC money. Adjust expectations

- Figure out ways to make startups cheaper (#1 on the list should be massive housebuilding. If rents were 1/3 of what they are, we would likely not be even reading this article. Right now all that would-be "extra" money gets directly funneled into the pockets of landlords. Tech bigwigs should be pouring massive resources / clout into changing this. Density, public housing to take pressure off the low end, all of it: https://medium.com/@spencer_th0mas/fixing-the-nyc-rent-crisi...)

- Get used to having fewer, but better capitalized startups

matchagaucho• 10 years ago

What's not mentioned is the toll for high comp:

42% of RSU earnings withheld to cover taxes.

90 minute commutes to work one-way.

Stack ranked performance reviews.

Open office space, cramped quarters, and distractions.

Off-hour email and texts. Implicit expectations to be "on-call".

gxs• 10 years ago

>> A famous example of this occurred in 2011, when Neal Mohan, a senior Google executive, was considering leaving for Twitter. Some say he was offered a bonus of $100m in stock to stay at Google.

I imagine this has more to do with keeping company secrets within the company. It has to, right? Is one person really worth 100M?

I guess if an athlete is worth 400M over the course of his career to a franchise (thinking of an A-Rod), it makes sense in this case also.

sonabinu• 10 years ago

It's not just the CEO's and VP's who get handsome rewards. The rank and file do as well.

kafkaesq2• 10 years ago

... but comparatively little to train and nurture said talent. From another article crossposted here recently:

"The perceived skills gap is because companies have stopped training and developing people internally," says Peter Cappelli of the Wharton School, who was interviewed for the report. "Before the 1980s, 90% of vacancies were filled internally and 10% were hired outside. Now, 65% of vacancies are filled from outside," Capelli says.

https://news.ycombinator.com/item?id=12865971

pascalxus2• 10 years ago

And yet, tech firms still try locate themselves in the most expensive parts of the world: San Francisco, and Palo Alto. There's so many tech hubs other than SF, where they could hire talent for less than half as much, but they choose not to.

The article states the cost of living is 41% higher. That's a large underestimation. In Palo Alto and SF, the average house prices (keep in mind these are mostly dilapidated tiny lot and barely livable) for 400% to 700% higher than the national average.

Taking into account the cost of living, I'm surprised that bay area salaries and compensation are not increasing more than it already has.

eitally2• 10 years ago

I think this is something non-locals don't really understand. Not so much that houses are insanely overpriced, but that in the most desirable cities for homebuyers (let's call them Palo Alto & Cupertino for argument's sake) the average house is a total piece of crap. It's not like you're getting something nice for your $2m. The people who are buying them are either buying them to tear down or significantly remodel, or they're tiger parents -- usually both working in tech -- trying to buy into the top public school districts ... but who then either don't care about the property quality or don't have any money left over to make improvements (hence all the detached garages converted into rentable studios). The property quality in a lot of relatively cheaper parts of the region are a lot nicer than what you find in some of the most expensive.

pascalxus2• 10 years ago

And let's not forget, there are engineers line up around the block, trying to work in SF and palo alto, but there's simply not enough housing. I'm sure these companies would be able to attract a lot more talent to the bay area, if they just solved the housing problem: but that would be politically illegal.

yankyou• 10 years ago

Don't want to pay for engineering work? You can get it for free!

All you need is to rack up a decade of experience, then put in 60 hours a week plus 20 hours of professional development to keep current on the latest technologies. If you're reading this you already have everything you need.

What, that doesn't sound very appealing? Alright, here's my card.

gorbachev• 10 years ago

If these folks were really worried about high salaries and interested in reversing it, maybe they should be talking about education policy and high cost of living in the US tech hubs.

Additionally if they were on the evil side, they could also advocate for open borders and removing visa restrictions for high tech workers.

But no, instead it's just whining. It's particularly hypocritical since it's coming from a bunch of rich folks, who typically became rich by owning a successful tech company.

Tech firms shell out to hire and hoard talent

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