

Google Fights Back In Battle For Talent - razin
http://techcrunch.com/2010/09/15/google-fights-back-in-battle-for-talent-but-may-be-creating-a-worse-problem-for-itself/

======
baddspellar
Effectively they're rewarding employees for interviewing with other companies.
What about the equally-valuable employees who are very happy with their jobs
and don't choose to interview? Won't they become a little less happy, once
they know they're making less than the guy who was a little unhappy and chose
to interview?

I've spent quite a bit of time as a manager at some larger tech companies.
We'd monitor turnover and adjust our compensation policies, and other policies
that affected satisfaction, across the board if there was an increasing trend
in turnover. Sure, we'd make a diving catch every once in a while when we
didn't keep a close enough eye on one of our top developer's satisfaction. In
those cases we'd still look at our overall package.

When we made adjustments, the really good, happy engineers were even happier
when they got nice raises without even asking for one. Now, by across the
board, I don't mean that every engineer gets a good raise. That's because as a
company gets larger, they get more and more mediocre engineers. The article
doesn't say that Google gives big counter offers to every engineer. I assume
Google is smart enough not to do that. It's not possible that all of their
engineers are really good. Sometimes good-bye is good riddance.

~~~
shpxnvz
_What about the equally-valuable employees who are very happy with their jobs
and don't choose to interview? Won't they become a little less happy, once
they know they're making less than the guy who was a little unhappy and chose
to interview?_

It's always been the case that those who negotiate effectively tend to end up
with better compensation than those who don't. I wouldn't expect re-
negotiation to turn out any different.

I'd guess that those who are unhappy that their co-workers successfully re-
negotiate their compensation would tend to be just as unhappy when a new
employee negotiates a compensation package better than theirs. I doubt there's
much you can do to make those people happy, short of helping them to be better
negotiators themselves.

I've had experience with a company who responded to this sort of employee
dismay by putting salary caps on new hires. The end result was, predictably,
that the really talented people we found walked away when the company refused
to negotiate, and pressure to increase head count forced the company to hire a
lot of less-than-ideal candidates.

Regarding the use of offer letters to negotiate - it seems like a risky
tactic. The appeasement is certainly not sustainable, and when they start
refusing to counter-offer, those employees better be ready to make good on
their threat of leaving.

------
jessriedel
> And worse – he’s confirmed that many Google employees are interviewing with
> Facebook and Twitter, among others, simply to get a hefty raise. “Many
> people at Google use Facebook offers in order to get a big raise,” says
> Buchheit.

I don't understand why this is "worse", i.e. why interviewing purely to get a
raise should be thought of as a bad thing. To me, having many (hopefully low
cost) interviews simply allows software developers to be efficiently priced as
market conditions change.

Now, the natural response, if employee value can move _upward_ more easily, is
that employers will be less willing to offer job/salary security. But, on
average, this is good, right? Fighting this is like fighting to go back to the
old pensions system, which drastically reduced employment flexibility and was
a major source of economic friction.

~~~
F_J_H
So, would you say it is no different than when companies offshore development
to reduce costs? After all, when companies explore cheaper offshore options,
it “simply allows software developers to be efficiently priced as market
conditions change.”

I’m sure I will get my share of down votes for this, but as a cofounder that
has hired several developers, I’ve had people come to me with better offers
and give me an ultimatum. I rarely counter as there is no guarantee they won’t
come back sometime later with an even higher offer, and so on and so on. What
if your employer did the same sort of thing and came to you and said – “hey,
someone with equal credentials and experience told me they would do your job
for less, so you either need do it for the same or I will replace you.”

Yes I know there is no guarantee that the new person could perform as well,
and that there would also be inefficiencies due to having to come up the
learning curve, but there is also no guarantee that the other job will be
better for the person entertaining the “better” offer. I have had people leave
for a “better” job, ended up completely hating it, and then asking if they can
come back. Um….no. This isn’t mom’s basement where if it doesn’t work out, you
can always move back.

I’ve found to keep people, you need to pay them enough to take the “money”
question off the table, and the ensure they have something meaningful and
rewarding to do.

*edit - typo

~~~
jessriedel
> So, would you say it is no different than when companies offshore
> development to reduce costs?

Yes.

>I rarely counter as there is no guarantee they won’t come back sometime later
with an even higher offer, and so on and so on.

If I'm a builder and the price of wood goes up--but it's still the cheapest
material for my needs--I keep using it. If it keeps going up, I keep paying
more and more until there is a cheaper alternative.

Yes, it can be argued that there are key differences between people and wood,
but you haven't identified them and why they are important here.

>What if your employer did the same sort of thing and came to you and said –
“hey, someone with equal credentials and experience told me they would do your
job for less, so you either need do it for the same or I will replace you.”

I would be bummed I was no longer as valuable of a commodity, but I wouldn't
fault the employer.

~~~
F_J_H
That's good - many people seem to fault the employer in my experience.

Question though - the wood analogy was yours. You were expecting me to foresee
that and list the difference between people and wood? I am also disappointed
that your response did not address the differences between companies
and....let’s say…Antarctica penguin colonies. ;-)

~~~
jessriedel
Well, I just meant that if you treat wood or people as strict commodities,
then the fact that the price might continue to rise in the future doesn't
really seem to imply that I shouldn't pay a slightly higher price now; you
just pay the market price so long as you still make a profit and there isn't a
cheaper alternative. (This is the naive, econ-101 analysis.)

But, of course, people are more complicated than wood. So if you wanted to
argue that you should refuse to pay the higher price, you would need to
explain exactly what the difference between people and wood are, and exactly
why it should lead you to reject the naive analysis.

------
rfreytag
By making these counter-offers Google is using real money to back up their
assertion to (at least some of) their employees that their growth prospects
are better than Facebook's. Think of this as a dividend-like unforgeable
statement of corporate fiscal self-confidence.

If enough Googlers go fishing for counter-offers at Facebook, Facebook will be
wasting a lot of management energy reviewing and making offers to Googlers
that were never going jump in the first place.

------
edanm
As a programmer, I'm very happy with this story. Google has always said that
the people are their most important asset (actually, most companies say it).
But now, they're backing up their words with action, and the programmers end
up winning.

I wonder if this is just a one-off thing that only Google is doing, or whether
this kind of thinking will start to be more prevalent.

------
vidar
A lot of these counteroffers must be to stop the perception of brain drain.
Perception is often more important than reality.

I dont think there are that many "must not lose him/her, at any cost"
engineers, even at google.

~~~
qq66
There may not be any "must not lose him/her, at any cost" engineers, but there
are certainly "must not lose him/her, at a cost of $x million" engineers.

------
sp332
Relevant old Dilbert comic:
[http://books.google.com/books?id=vWBwU5gLo60C&lpg=PA117&...](http://books.google.com/books?id=vWBwU5gLo60C&lpg=PA117&ots=bw_e7v4MM2&dq=dilbert%20rewarding%20disloyalty&pg=PA117#v=onepage&q&f=false)

"The secret company policy is to reward disloyalty!"

------
bambax
This looks like a new bubble. Why would a Twitter IPO raise so much money?
What are its growth prospects? Facebook may be different, but still, it all
sounds very crazy.

~~~
pclark
Why does this look like a new bubble? Why wouldn't Twitter raise billions in a
public offering? Their growth prospects are every web or mobile phone user -
in any country - to use their service. The amount of attention Twitter has
from its users is really noteworthy.

~~~
bambax
There was a story not long ago on HN (can't seem to find it though) about a
blogger who had a special Twitter pipeline to send tweets whenever he blogged,
or something.

The thing failed silently and stayed broken for two months, and NOBODY
NOTICED: neither he nor any of his "followers" (he had more than a thousand).

So, having found out about the situation, he decided to stop using Twitter
altogether.

On LinkedIn I now have to see all the tweets of my "contacts" whenever I log
in; this is so annoying that it may push me to quit LinkedIn for this reason
alone.

People on Twitter are just copying and pasting news found elsewhere; there is
an infinitely small proportion of original content: for one "Shit My Dad
Says", there are millions of users who only mulch old content from the likes
of Digg (RIP) or Reddit or HN.

Twitter users are not paying attention to one another; they shout in the
desert and nobody cares.

This cannot go on forever.

~~~
mark_l_watson
I up voted you because I agree that "People on Twitter are just copying and
pasting news found elsewhere; there is an infinitely small proportion of
original content..."

I find Twitter to be very useful because interesting people who I follow post
links to interesting stuff. But, not too many fully formed ideas in 140
characters: just links or short funny things, etc.

------
mark_l_watson
I think it is a poor idea to put stock options in a startup at a high priority
when job hunting because startup success is a long shot. It is a different
situation for Facebook and other well established pre-IPO companies or older
companies that have an established value to their stock (I stayed at SAIC for
a long time because of stock bonuses, options, and the expectation that the
value would continue to increase).

For small startups, it seems like you have founders who have taken a real risk
vs. employees/consultants who are getting a salary and perhaps some equity. If
you are working for hire, better really enjoy the work and/or the immediate
compensation.

I have a childhood friend (actually, I also used to baby sit him when he was
really young) who started 3 companies over a 20 year period, finally getting
$300+ million when selling a large interest in his last company. My friend
(and people like him) who take risks get most of the rewards - a fair system.

------
antirez
Maybe I'm not used to the Silicon Valley processes but I think it is pretty
uncool to tell your company you received another offer... even without
explicitly mentioning you want a raise.

You should either be happy with your company, or talk with your boss in order
to get better conditions. And if there is no agreement you can look around and
go in some other place. But playing the game of the higher offer is something
that always disturbed me.

~~~
edw519
_But playing the game of the higher offer is something that always disturbed
me._

Not me. Here's my experience (many times):

    
    
      Phase I
        Me:    I deserve more $ because <27 good reasons>.
        Boss:  I can't because <14 stupid reasons>.
    
      Phase II
        Me:    I quit (not bluffing).
        Boss:  You can't.  Here's more $.

~~~
antirez
Ok, this is what I think should be the best behavior:

    
    
        Phase I
          Me: I deserve more $ because ...
          Boss: I can't because ...
          Me: Ok
    
        Phase II
          You look for a better job where you can get what you deserve, without telling your company about it.
    
        Phase III
          I found the job.
          Me: Sorry, I'm leaving, I found a job with the right $
          Boss: Ok, we can match the offer
          Me: no way, I'm leaving.

~~~
jasonkester
Minus the Phase II (never tell them you're planning to leave), I've done this
a couple times with good success.

It's healthy for both sides. You get a better job and a bit of self-satisfied
pleasure during the "no, you lost me" speech. They get to understand why they
lost a good worker, and the real costs associated with it. With luck, the team
you left behind will have a better environment, since just maybe management
will learn something.

~~~
antirez
Yep sorry I was not clear, in phase II you are not supposed to tell you are
looking for another job.

~~~
sushrutbidwai
People also tend to use interviewing to gauge what is current market price for
talent they have. Specially when economic conditions start looking to change
for better.

------
MC27
By repeatedly covering this topic, and websites like this linking to the
source, it's becoming a self-fulfilling prophecy. Essentially, TC is partly to
blame and it reminds me of when they went after last.fm.

------
VladRussian
That summarizes it : "Only a sucker would sit and hope for recognition".

Google tries to avoid the unavoidable, at least in astrophysics :

"After the type II supernova, only the collapsed core is left behind. If it's
less than 2 or 3 solar masses, it is what's known as a neutron star, named
thus because it's made almost entirely of degenerate neutrons."

~~~
VladRussian
got angry? At astrophysics? Some people still surprise me. This was the post
where i least expected to lose karma.

------
dschobel
Crazy stuff, I wonder how long google's stockholders are going to tolerate
overpaying (relative to market) for talent.

~~~
tomerico
Google has never paid any dividend and has always gave big bonuses to its
employees. So stockholders already tolerate these things.

Microsoft on the other hand has been paying generous dividends, its profits
has been rising at an impressive rate, yet its stock has remained steady for
almost a decade.

~~~
maigret
Yes, because investors hope Google to pay (high) dividends soon. Without
dividends, stocks are just a Ponzy scheme.

------
shareme
The problem with the article is that it misses the big point.. Google is
attempting to save some costs in hiring at the high levels of coding
engineers..with a comparison of that costs per employee against the cost to
offer a 20% raise is somewhat a miss-leading and pointless article..or what we
call link-bait.

And some of the Hr hiring costs per employee can be determine from the Google
SEC filings..by making some assumptions and completing some calculations..

And on top of that most high end Google engineer hires and this has been in
fact talked about only become fully productive at 12 to 18 months after
joining Google..

So lets do the calculations that MA of Tc should have been somewhat curious to
do..

$120,000 salary per year times 80% non-productive first 12 months..learning
the Google engineering system etc..

$96,000 in loss productivity costs

now ad Hr department costs of interviewing and etc..

$20,000..my guess..only guess.

so now we are up to a subtotal of $116,000.. and $120,000 times 20%
is..$24,000

Change the salary to say $400,000 still similar differences in costs of the
two decisions..with Google wining out on their own cost decision..

~~~
jasonkester
Where do you get your 80% non-productive number?

Every job I've had in the last 10 years, I've delivered production code on day
one. I expect that anybody good enough to get hired at Google would be capable
of the same. I mean sure, we've all hired our share of useless junior devs,
but then we've all done that at places that were a notch or two below Google
on the minimum-standards front.

For talented developers with experience, I could see losing a few percentage
points of your max speed during the first week while you get used to process,
but do you really think you can stumble along at 20% of your capability for an
entire year and not be noticed? At a top-tier software company???

~~~
ovi256
>Every job I've had in the last 10 years, I've delivered production code on
day one.

We all did, but it's not enough. You probably took time away from other
engineers to coach you and explain the system. If you took more time than it
would have took them to accomplish what you did, you're not productive. And
his point is that's what you did.

~~~
jasonkester
Perhaps I wasn't clear, so I'll restate what I was saying.

One day one, of the last half dozen jobs I've taken, I've been handed a
project and told to run with it. And I ran. Without any assistance from
anybody except a couple quick chats with whoever's in charge over the course
of the project, and QA when it was ready to push.

No hand holding, no coaching, no taking up anybody's time asking silly
questions. You just figure things out for yourself and get up to speed. Inside
of a few hours.

That's how you work if you're good, and I can't imagine anybody getting in the
door at a shop like Google that couldn't.

The type of drain you describe is what happens when you bring a junior dev
onto a team. It's a lot less when you bring in more senior people, and by the
time you get to the big leages it's pretty much just background noise. That's
why I questioned the great-grandparent's "20% throughput for an entire year"
number.

My guess, based on experience, would be closer to 100% throughput, given an
entire year to absorb the first few days.

