Schumpeter: How to bag a geek

In the battle for software talent, other industries can learn from Silicon Valley

AT A recent dinner party in Silicon Valley, Schumpeter was chatting with an impressive entrepreneur who was grumbling about how hard it was to find a decent date. The tech types she meets turn out to be too geeky, even for a self-confessed nerd who runs her own computing startup. “The odds are very good,” she explained, “but many of the goods are very odd.”

For recruiters trying to hire software whizzes, the odds are poor. A recovering economy in America and an explosion of entrepreneurial activity are driving up demand for tech talent. According to the Bureau of Labour Statistics, the unemployment rate among software developers and engineers was just 2.5% in the fourth quarter of 2014, compared with a national joblessness rate of 5.7%. A global search engine for jobs, Indeed, tracks the ten hardest positions to fill; in the final three months of last year, seven of these were roles related to computer science.

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It is all reminiscent of the late-1990s dotcom boom. Chunky signing-on bonuses and “precations”—paid vacations before taking up a new position—are being dangled in front of tech folk to tempt them to jump ship. Bidding battles are breaking out, with salaries and bonuses rising fast for experts in popular computer languages such as Python and Ruby on Rails. Some programmers are even being wooed for their celebrity potential by talent-management agencies that also represent musicians or sports stars. Look out for the rise of the geek entourage.

Although the competition for talent is particularly stiff in Silicon Valley, the phenomenon is a global one. In India, e-commerce giants such as Flipkart and Snapdeal are scrapping for software engineers to help them compete with Amazon there. One of China’s largest internet firms, Baidu, is sponsoring matchmaking events for workers because surveys have shown that married employees are less likely to hop to a rival.

In a broad spread of industries, from carmaking to aerospace to domestic appliances, products have ever more lines of code embedded in them. These firms, too, are struggling to hire enough developers. Ford advertises as many jobs in software as many a midsized tech firm. As they seek to serve their customers via smartphone apps, all sorts of service businesses, from banking to retailing, need more people with software skills.

If the battle for programming talent is not just being fought among the titans of tech, that is where the front line lies. To a greater extent than makers of hardware, software-based firms are dependent on the hard-to-replicate talent that walks through their doors each morning. Hence the effort they put into recruitment and retention. Tangible rewards in the form of large salaries and attractive share options are part of it. But there is more to their human-resources strategies than generous compensation and perks such as on-site yoga classes and free gourmet meals.

Corny as it may sound, tech types really do want to feel they are somehow making “a dent in the universe”, to borrow a phrase from the late Steve Jobs. Grandiose mission statements abound. Google wants to “organise the world’s information and make it universally accessible and useful”. Facebook’s goal is to “give people the power to share and make the world more open and connected”. To help foster a sense of boundless possibilities, the firms are also spending heavily on adventurous projects outside their core businesses. Google is working on everything from driverless vehicles to web-connected gadgets for the home. Facebook has bought a company whose drones can provide internet connections to remote swathes of the Earth. And Apple is said to be working on electric cars and virtual-reality headsets.

Like other creative types, the best software workers strongly believe that caring means sharing. All-hands meetings are not just for tiny startups; staff at even the largest tech firms expect their bosses to appear frequently in person or by video link, to be grilled about everything from corporate strategy to the quality of the office coffee. The prospect of such radical openness makes buttoned-up executives in other industries quake in their boots.

Some hotshot developers still prefer to work in a small firm rather than be just another cog in a giant tech machine. To get their hands on such talent, the big technology firms “acqui-hire” it: they spend lavishly on buying companies with little revenue, just for their staff, and then seek to retain them by offering plenty of autonomy. Last year, for example, Google paid $400m for DeepMind, an artificial-intelligence startup that has some of the best engineers in the field working for it.

The web giants are increasingly aware of the need to broaden the talent pool in which they are fishing. Some are making greater efforts to attract and retain female recruits, who are still woefully underrepresented in their ranks. Apple and Facebook have said they will cover the cost of freezing the eggs of female employees who want to delay having a baby while they pursue their careers. Facebook’s chief operating officer, Sheryl Sandberg, has championed the causes of getting more women into executive suites and more female students on to computer-science courses.

Copy and paste

Other types of companies—even the banks—will struggle to match the Silicon Valley firms in the lavishness of their compensation and their willingness to pamper their software talent. But they can compete for it more effectively by copying some of their techniques. Insurers, for instance, could woo developers by touting their mission of making the world safer from cybercrime and other big risks. Banks and retailers could infuse their ranks with more tech talent via acqui-hires. Indeed, WalmartLabs, the Silicon Valley research arm of Walmart, which faces stiff competition from Amazon, has been busy buying small startups, some of which it has swiftly shut down while keeping the employees. The odds may be stacked against it and other non-tech firms, but the goods are worth fighting for.

Article source: http://www.economist.com/news/business/21644150-battle-software-talent-other-industries-can-learn-silicon-valley-how-bag?fsrc=rss

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