Wednesday, May 18, 2011

Silicon Valley's war for talent

Fascinating article in today's New York Times business section about the ongoing war for talent in Silicon Valley. A lot of the reporting seems somewhat second-hand, but the reporter does talk directly with a number of hiring managers at places like Facebook.

“Engineers are worth half a million to one million,” said Vaughan Smith, Facebook’s director of corporate development, who has helped negotiate many of the 20 or so talent acquisitions made by Facebook in the last four years. The money — in the form of stock — is often distributed among the start-up’s founders, employees and investors. The acquired employees also get a rich salary and often more stock options, which makes this a good time for entrepreneurial engineers.

The article primarily focuses on the tension between the two basic ways of acquiring talent for companies such as Google, Microsoft, Facebook, etc:

  • The company can individually recruit employees directly

  • The company can acquire other companies, including in those acquisition calculations the fact that it is acquiring the target as much for its people as for its assets (products, customer base, physical assets, etc.)

Once a company reaches a certain size, individually recruiting talent can seem slow and ineffective, and it can be tempting to try to grow by acquisition. It's an old story (at least, old by Silicon Valley standards).

Meanwhile, reacting in part to a blog post from Pablo Villalba of Teambox, there's an interesting thread on Google's hiring process over at Hacker News, including this observation by Chuck McManis of Blekko. As Nick Carlson points out on Business Insider, one of the basic truths about Google hiring process is that it emphasizes a quantifiable approach to recruiting, with lots of Google "algorithms" to rate, rank, and measure candidates during the recruiting process, and this can open gaps in your hiring, causing you to miss candidates who are hard to quantify, as well as to miss skills that your measurements aren't measuring.

As they say, when you measure, you get what you measure. But if you don't measure, how do you know? It's an eternal struggle.

I went through the Google process myself, about 7 years ago. At the time, I was very involved with my family and kids, and decided Google was not right for me (I live rather far from Google HQ). I'm told that Google has changed its policies since then, and it's easier for Googlers to balance their work life with their family life. How to hire people is a very interesting problem, and I think Google has clearly done a much better job of it than most high tech companies that I know of; the Google talent base is astounding. Still, it's always interesting to examine that process and understand its implications.


  1. If there is a bubble, how come I'm not enjoying it?

  2. if we look statistically, during a period of 5 years, I think a programmer has a better chance to become wealthy as an employee (if he's good and improves his skills over time) than as an entrepreneur :)