On Talent, War, and Devastation
by Jon on August 12th, 2011 - Comments (1)
Ever since the U.S. started on its long road to recovery from the Great Recession and tech companies began expanding the ranks of their employees again, there’s been a dearth of talent to choose from, especially those most important senior level team members in engineering and user experience. This lack of readily available personnel has driven not only an increase in salaries, signing bonuses, and perks, but also a variety of unorthodox recruitment strategies, not the least of which is acquiring small companies for their talent, not necessarily their technology. Facebook, for example, has executed some high profile acquisitions to bring top notch designers into the fold, buying both software design shop Sofa and product firm Push Pop Press.
In Boston, the rapidly growing, venture funded marketing optimization company HubSpot, has come to the battle armed with one of the more original recruitment efforts; cherry picking engineers from slower moving competitors by encouraging software developers at big companies to make a “prison break” for HubSpot’s hipper environs. HubSpot is making it worthwhile for experienced talent, with a $1K bonus for each year spent at a big firm.
While the Talent War of 2011 may have seemingly come out of nowhere, economic and hiring trends don’t exist in a vacuum, and there is a long and sordid history that has birthed the scenario that we have today. A likely reason for the lack of senior UX designers and engineers harkens back to the Tech Bubble of 2000 and the ensuing economic recession that laid waste to the technology sector, the dreaded Dot Bomb. During its high flying heyday, the NASDAQ index and Dot Com companies ruled investment portfolios, posting outsized returns that were the envy of the financial neighborhood; the index peaked at a heady 5,048 on March 10, 2000. Then, with little ceremony or warning, it dropped like a stone into the pit. In the next 30 months, the NASDAQ lost nearly 80% of its value, finally bottoming out at 1,139 in September of 2002.
I was working at an Internet start-up at the time and exited the company just 3 months before a bloodbath of layoffs. Taking shelter in a relatively stable tech job in Massachusetts state government, I was lucky enough to ride out the ensuing near destruction of the once mighty Internet industry, epitomized by companies like Yahoo who saw valuations drop from $108 to $5 a share, or service organizations like Razorfish who, starved of work, became skeletons of their former selves. I fielded calls from colleagues lamenting the fall of the axe as bustling cube farms turned into ghost towns and knowledge workers hit the streets searching for jobs. That recession in Internet tech lasted long enough to drive out all but the most tenacious and determined. If you weren’t lucky enough to have found a safe place to land, as I was, then the choices for employment in your field, whether for UX or engineering, were looking grim. It was at this low point in our industry’s history that people began to leave the digital tech sector for greener pastures, and many never returned. To make matters worse, university programs in computer technology saw a drop in enrollment: Students just weren’t interested in a dead end industry. And so, in this way, the Dot Bomb in one fell swoop managed to nearly wipe out a generation of engineers and designers. Fast forward a decade and the landscape has changed considerably. But there is a noticeable lack of senior designers and engineers, those very people who were coming up during the Dot Com years and ended up seeking their fortunes elsewhere. Perhaps this is not the only cause for the lack of senior talent in the industry today, but it certainly is a significant contributing factor.
Despite the trials and tribulations that brought us here, the Talent Wars bode well, not just for the tech workers of today, but also for the future. Knowledge work, especially design and engineering, is not only in demand, but provides a long term opportunity for young people in high school and college now. Whether we can continue to harness our growing knowledge economy here in the US remains to be seen, but for the time being, the getting is good.