Thursday, November 11, 2010

Tech Talent Shortage

The big story in my little blogger world is the war for talent in Silicon Valley. The reason seems to be that the biggest players (e.g. Google or Facebook) are cornering the labor market. My read of the handwriting on the wall is that the HR strategists see an acute shortage on the horizon. One result will be a shaking up of the urban hierarchy:

I’ve talked to more than two dozen engineers looking for jobs in the past 8-weeks. I’ve seen some incredible things. One is that talented yet unproven college grads are getting offers from $120,000k to $180,000 (?!?). This has been inappropriately inflated due to competition in the Valley. Another friend literally went 4-days before getting a huge unsolicited offer. Smells fishy.

This was also confirmed by a Sand Hill friend who adds that Valley companies are looking outside the Valley to meet their needs saying ”If you’re not Facebook or Twitter right now good luck getting the top guys.” Some companies are looking to build offices in nearby locations like Portland and SLC where the opportunities are less competitive and talent comes cheaper.

Sure, Silicon Valley is the center of the venture capital universe. But good luck staffing your start-up. This is a huge opportunity for the smaller innovation markets such as Pittsburgh, which looks to be a cost effective alternative to the scene in New York. I suppose Philadelphia will get first crack as the site of geographic arbitrage.

I've noticed Google (Mountain View) sniffing around my blog the last few days, spending hours looking at this and this. Sparing you the click through, one post covers talent as currency and the other maps the economic geography. The takeaway is a focus on where the talent is produced and its employment destination. These are lines of connectivity to be exploited when inmigration starts to break down. That pipeline is now a two-way street.


Burgher Jon said...


I thought Fred Wilson had an interesting discussion of the $3.5M bonus. As he points out, today is what it is, but eventually the tides will turn. How can regions and companies be ready when it does.

Jim Russell said...

In terms of talent, I'm not convinced that the tide will turn. Sure, the rise in salaries is unsustainable. But I see the labor market getting much tighter. For the regions that produce much of this talent, the landscape change will be welcome. For companies, now is a good time to move to Pittsburgh.