The global talent crunch

http://fortune.com/2014/09/04/the-global-talent-crunch/

by ghosh • 12 years ago

30 45 12 years ago

_random_• 12 years ago

Reporting from London: no crunch here so far. Average IT salaries are still on decade-old £50-60k levels (despite the inflation and rising costs of living).

bowlofpetunias3• 12 years ago

That's what I'm seeing from the recruiters pissing in my inbox, but I'm also reading this: http://www.computerworlduk.com/news/careers/3543458/biggest-...

£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.

quaffapint• 12 years ago

Same story in Mid-Atlantic region of US. I get plenty of recruiter emails, but when I ask, they're paying junior (or sub-junior) level pay for senior and above talent.

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.

tthomas48• 12 years ago

Have we considered there's actually a hiring and management problem? That we have organizations ill equipped to find and train new employees and thus they only go with proven candidates?

bithive123• 12 years ago

This is the truth. From what I have seen, organizations are bad at acquiring the technology and support they need because most managers lack the relevant experience to have any real oversight over their employees or contractors.

bowlofpetunias3• 12 years ago

Coincidentally, today both in the UK and the Netherlands reports were published about the rapidly increasing shortage of "IT workers".

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?

corford2• 12 years ago

SV is an anomaly. You have a super high concentration of VCs ploughing tens of millions in to hundreds (probably thousands) of companies. It's easy to compete for talent when you have millions of someone else's money to spend on payroll.

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.

pchristensen• 12 years ago

I would assume that big companies that are post-investment (Apple, Google, Facebook, Twitter, Yelp, Autodesk, Cisco, Intel, Yahoo, LinkedIn, Zynga, etc etc etc) pay out several orders more dollars of salary than companies running on VC. Startups with VC money have to compete against THOSE companies to hire. Engineers here have a great alternatives and can optimize for money, stock, satisfaction, education, connections, etc, so you don't have to stay in a sucky job, low salary, or bad company. That is why salaries are so high.

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.

deodorel• 12 years ago

I don't know why, but each time i read about the shortage of devs, i see another cry from the industry: "we want more immigration so we can drive the sallaries down!"

defen• 12 years ago

Probably because many of the biggest names in the industry are personally involved in pushing for more immigration by people with tech talent?

qwerta• 12 years ago

This is the land of luxurious perks (think massages, onsite haircuts, and free food) and high starting salaries.

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.

erobbins• 12 years ago

The "perks" exist to squeeze more out of each worker, nothing more. $10 for a 15 minute haircut onsite, vs $75 for an hour of a 150k/year person's time to run out for a haircut.

xur17• 12 years ago

It doesn't have to be a zero sum game. In this case, the company gets more work out of you, and you get a free haircut.

x0x04• 12 years ago

Yeah, I'm surprised nobody ever does the math. Walking out of work to go to a restaurant takes at minimum 1.5 hours by the time you gather a lunch group, wait for at least one person who has "just two minutes" to finish some task, figure out where we're going to eat (in any decent sized group there's a vegetarian, or someone who doesn't like Korean, or someone who just ate a burrito last night and doesn't want mexican, etc), walk to the garage, figure out who's driving, move child seats, drive to the restaurant, park, order, eat, figure out who owes what and split the bill, pay, drive back. Whereas eating in the office takes ~40 minutes and is probably a bargain for employers: it not only makes me grateful, but they get 45-60 more minutes of work out of me.

hostyle• 12 years ago

My personal anecdote: companies are idiots.

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.

tomkinstinch• 12 years ago

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?

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?

nine_k• 12 years ago

As a sibling comment says, it's a pain to be in a significantly different time zone.

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).

toomuchtodo2• 12 years ago

https://weworkremotely.com

https://careers.stackoverflow.com/jobs/remote

In my case, I answered a HackerNews job posting.

AndrewKemendo• 12 years ago

Why isn't remote working catching on more?

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.

bloodorange• 12 years ago

Though I agree that these are problems that exist with remote working, unless you are able to lose less time and build an equivalent or better team, you may still have come out ahead.

MrDom• 12 years ago

It sounds like your issue is entirely to do with the fact that your team is spread around too many time zones. What if everybody on your team lived somewhere within 3 time zones from each other? That happens to cover the entirety of the united states, canada and mexico, by the way.

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.

christopherslee• 12 years ago

I'm never sure what the point of these articles are. It's supply and demand. If there's a crunch, there's more demand then supply. When that happens prices go up.

So really the tl;dr is, companies want more talent at the same price.

potatolicious3• 12 years ago

"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).

dropit_sphere4• 12 years ago

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.

x0x04• 12 years ago

You're aware you don't have to accept the salary offered, right? You can take less, and I even bet few employers will complain. I gonna let you start the trend and I'll hold back though.

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.

michaelochurch2• 12 years ago

There isn't one.

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.

yummyfajitas• 12 years ago

Travel overseas to some poorer ("third world") countries and it's 95 or 99+ percent.

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.)

[1] https://news.ycombinator.com/item?id=7303217

bowlofpetunias3• 12 years ago

You're simplifying the term "talent". I know a company that does their tech in the Philippines (not cheap off-shoring, a real, well-funded part of the company). Yeah, plenty of CS majors but still quite hard to find actual talent (let alone talent that produces results), and the best are leaving the country.

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.

michaelochurch2• 12 years ago

the best are leaving the country.

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.

dropit_sphere4• 12 years ago

This is getting ridiculous.

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?

FollowSteph3• 12 years ago

There's a crunch at today's salaries. Plain and simple. Increases salaries and a lot more talent will appear. Most people are no longer willing to work at the rates corporations want to pay. Simple market forces at work ;)

cratermoon• 12 years ago

There is no talent crunch. It's only a shortage of companies willing to pay people true market rates.

The global talent crunch

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