
The global talent crunch - ghosh
http://fortune.com/2014/09/04/the-global-talent-crunch/
======
hostyle
My personal anecdote: companies are idiots.

99% of these jobs are city based and require you to relocate. Why? If my work
is all done on the internet, why can't my commute be aswell? Why should I have
to constantly migrate when I have a perfectly good and happy place to live out
in the country? Why isn't remote working catching on more?

All of these claimed shortages are in "IT" which is a very lose term. In
Ireland for example something like 50% of IT jobs are phone tech support in
foreign languages. We constantly hear of the shortages in this area - yet its
low paid and generally requires foreigners to fill the roles. So why not try
to hire actual foreigners? In actual foreign countries? Across the internet?
Why try to hire expensively educated and irish people with a high cost of
living and offer them minimum wage?

The shortage is never in qualified candidates. It's in qualified candidates
willing to accept minimum wage. And if all that wasn't bad enough, foreign
corporates get to pay extra low tax rates by moving to Ireland, just so they
can try to screw the population out of a proper wage packet - all endorsed by
the government of course.

~~~
AndrewKemendo
>Why isn't remote working catching on more?

Right now 100% of my startup team is remote. There are definite advantages,
but as far as we are all concerned we think the disadvantages outweigh the
advantages. Why?

Because the communications mediums available still do not give the resolution
we need to communicate optimally. Even with Skype/join.me/freedcamp etc... the
turn around time for decision making is orders of magnitude slower with remote
teams than it is with co-located teams - especially when you are on different
time zones and in different continents.

A perfect example is when we wanted to implement a design and UX change on our
beta website. The change came at my request after visiting a customer and went
to the CTO and the design lead. The CTO started working on the back-end about
an hour after I sent the message, but it was almost a day later that the
design lead got the message because he was 8 hours behind. We needed some of
the design pieces before the front end could be finished and tied together
with the back end. About a day later the design lead finished the design and
committed the change. At which point it was midnight US time so another 8
hours till the commit could be integrated. We realized we needed a slight
change so we had to repeat this process. The whole thing ended up being a
couple days for something that would have taken maybe two hours total had we
all been in house.

These lags add up very quickly and have pushed something that would take a day
of turn around to nearly a week.

~~~
MrDom
It sounds like your issue is entirely to do with the fact that your team is
spread around too many time zones. What if everybody on your team lived
somewhere within 3 time zones from each other? That happens to cover the
entirety of the united states, canada and mexico, by the way.

I've worked on teams spread across the North American continent and we had no
issues with making fast decisions. Most of the time it felt like we were in
the same room, since we had a skype group video chat running for 7 hours a day
(at which point it would kick us off for being on too long).

IMHO, the reason remote isn't done more often is it's a hassle. You need the
right tools in place. You need people with the right mindset. There are tax
issues around employing people in multiple states and/or countries. There are
also shipping costs involved in sending equipment around the country and/or
the world. The lack of control over said equipment and the data on it... the
list goes on and on. Each one is surmountable on its own, but add them
together and it become so much easier to insist everybody be in the same room.
Especially if it's going to be a high stress environment, like a startup.

Still, it would be nice to work from a cabin in the woods.

~~~
toomuchtodo
>IMHO, the reason remote isn't done more often is it's a hassle. You need the
right tools in place. You need people with the right mindset. There are tax
issues around employing people in multiple states and/or countries. There are
also shipping costs involved in sending equipment around the country and/or
the world. The lack of control over said equipment and the data on it... the
list goes on and on. Each one is surmountable on its own, but add them
together and it become so much easier to insist everybody be in the same room.
Especially if it's going to be a high stress environment, like a startup.

Bottom line: The founders/company owners/whatever MUST be invested in the
company being a fully remote company. It doesn't work otherwise. If you're at
somewhere where working remote is handled half-assed, I suggest departing for
a place that takes it seriously. They are out there.

Disclaimer: I work for a 100% remote startup.

------
bowlofpetunias
Coincidentally, today both in the UK and the Netherlands reports were
published about the rapidly increasing shortage of "IT workers".

After digging a bit deeper into the actual numbers (when for fuck sake are
they going stop grouping everyone who touches a computer under the heading
"IT"?), it's mostly "developers, developers, developers".

Also, reactions on most forums are "fuck you, pay us". All perks, generational
differences and cultural changes aside, this is mostly a money problem. I see
so many people in jobs that where there is considerably less demand and
require a lot less effort to keep skills and knowledge current earn a lot more
money than developers.

Why are, with some localized exceptions like SV, developers still being paid
considerably less than all reports suggest their market value is?

~~~
corford
SV is an anomaly. You have a super high concentration of VCs ploughing tens of
millions in to hundreds (probably thousands) of companies. It's easy to
compete for talent when you have millions of someone else's money to spend on
payroll.

In other areas there just isn't that kind of money floating about to compete
with (nor is there as strong a need to compete in the first place as non-SV
companies aren't fighting against a hundred other tech companies for access to
the same talent). So, companies pay what they pay and a dev either sucks it up
or moves to SV if he/she wants to earn more.

~~~
pchristensen
I would assume that big companies that are post-investment (Apple, Google,
Facebook, Twitter, Yelp, Autodesk, Cisco, Intel, Yahoo, LinkedIn, Zynga, etc
etc etc) pay out several orders more dollars of salary than companies running
on VC. Startups with VC money have to compete against THOSE companies to hire.
Engineers here have a great alternatives and can optimize for money, stock,
satisfaction, education, connections, etc, so you don't have to stay in a
sucky job, low salary, or bad company. That is why salaries are so high.

CA as a whole receives about $15B/yr in VC. Assuming every penny of that went
to engineer compensation (not at all accurate - customer acquisitions is
probably a bigger line item), that would be 75,000 jobs @ $200K company cost
(probably low for the Bay Area). So VC directly pays for maybe 5-20K engineers
in the Bay Area.

Insatiable, rich tech companies are why salaries are high.

~~~
corford
Yep, really good points. Basically, the Bay Area is a land unto itself and
assuming tech salaries in other parts of the country/world should be at
comparable levels isn't really realistic.

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tthomas48
Have we considered there's actually a hiring and management problem? That we
have organizations ill equipped to find and train new employees and thus they
only go with proven candidates?

~~~
bithive123
This is the truth. From what I have seen, organizations are bad at acquiring
the technology and support they need because most managers lack the relevant
experience to have any real oversight over their employees or contractors.

------
dropit_sphere
This is getting ridiculous.

Quiz: If you only hire the top 1%, and the workforce grows by 100 people, how
many has it grown by _for you_ , under your self-imposed restrictions?

Quiz #2: If you are certain that it is very important to only hire the top 1%,
_but_ you freely admit that your hiring techniques are fuzzy and confuse the
top 1% with the bottom of the top 10%, _and_ you're not exactly sure what you
mean by "top 1%," (see
[http://michaelochurch.wordpress.com/2013/09/21/dimensionalit...](http://michaelochurch.wordpress.com/2013/09/21/dimensionality-
and-also-a-theory-about-the-rarity-of-female-programmers/)) are you insane for
suffering no cognitive dissonance with these three ideas in your head?

------
deodorel
I don't know why, but each time i read about the shortage of devs, i see
another cry from the industry: "we want more immigration so we can drive the
sallaries down!"

~~~
defen
Probably because many of the biggest names in the industry are personally
involved in pushing for more immigration by people with tech talent?

------
qwerta
> This is the land of luxurious perks (think massages, onsite haircuts, and
> free food) and high starting salaries.

Yet another bull*t article. Haircut costs perhaps $10, they give free food in
homeless shelter... Luxury perk is paid accommodation, car (with chauffeur),
huge private office or location independence.

~~~
erobbins
The "perks" exist to squeeze more out of each worker, nothing more. $10 for a
15 minute haircut onsite, vs $75 for an hour of a 150k/year person's time to
run out for a haircut.

~~~
xur17
It doesn't have to be a zero sum game. In this case, the company gets more
work out of you, and you get a free haircut.

~~~
ojbyrne
Not to mention that "more work" isn't even a zero sum game. You get more
experience, sense of accomplishment, etc.

------
christopherslee
I'm never sure what the point of these articles are. It's supply and demand.
If there's a crunch, there's more demand then supply. When that happens prices
go up.

So really the tl;dr is, companies want more talent at the same price.

~~~
potatolicious
> _" So really the tl;dr is, companies want more talent at the same price."_

This is not unreasonable. I know around these parts we like to think that
developers are the God-Kings of the universe, but there are real negative
consequences to the seemingly infinite geometric growth of developer salaries
(currently, in the NYC area anyways, clocking in at least 10% a year).

And I say that as someone who is a huge, direct beneficiary of these insane
salaries.

We keep complaining around here about the influence of VCs on the industry,
about how everything is oriented around landing the next round of funding.
That we think about runways more than we think about creating useful things.

We also complain about how founders are giving up increasingly large pieces of
equity just for the capital to get off the ground, and that the dream of tech
entrepreneurs changing the world is constantly compromised by all of the
above.

We also complain about the power large corporations have over small businesses
and can muscle them around in the market.

All of these come down to the price of developers. The more we get paid, the
more capital founders will need to start companies, and the more power
investors will have over entrepreneurs, their companies, and their employees.

Huge paychecks for developers only plays into the hands of wealthy investors
who now consume an ever-increasing influence, and who wind up owning more and
more of the fruits of innovation.

The more we get paid, the more it benefits large, established corporations,
who have the mature, optimized business models to afford huge salaries, and
the more we handicap small, starting businesses who do not yet have the
revenue/employee to sustain high burn rates.

The more we get paid the fewer true bootstrapped companies we will see, since
there is now an increasingly insurmountable cliff between "founders in a
garage" and "first hire".

The more we get paid the more types of businesses will be categorically
excluded from existing because they're not profitable enough to pay huge
salaries. Just recently I turned down an offer from a company doing tremendous
social good - the salary they offered would have been highly competitive a
mere two years ago, but the market continues to inflate. I fear businesses
that are highly positive to society, but not hugely profitable, will simply no
longer exist in the future.

Don't get me wrong, I enjoy being paid a shitload of money to do what I love,
but understand that there is a point where increased developer compensation is
a net negative for us all, and that we may already be past that point.

The world is bigger than our bank accounts (sad, I know).

~~~
dropit_sphere
>The world is bigger than our bank accounts (sad, I know).

Wait a minute, wait a minute. Why? I mean, seriously, why? Public companies
exist to fatten shareholders' bank accounts. Privately owned companies exist
to fatten their owners' bank accounts. I submit that the world is _no_ bigger
than our bank accounts.

Also regarding founders giving up large amounts of equity to VC's so they can
afford developers: there is a very simple solution. _Give employees more
equity_. Take out the middle man.

~~~
hkarthik
> Also regarding founders giving up large amounts of equity to VC's so they
> can afford developers: there is a very simple solution. Give employees more
> equity. Take out the middle man.

That's been tried a lot and is often referred to as "sweat equity". Most
people won't go for it when there's 5 jobs across the street that will offer
cold hard cash which they have obtained by getting a premium on equity with a
VC.

~~~
sheepmullet
"That's been tried a lot and is often referred to as "sweat equity". Most
people won't go for it when there's 5 jobs across the street that will offer
cold hard cash which they have obtained by getting a premium on equity with a
VC."

How many startups offer the first few employees a reasonable amount of equity
(>5%)? Most startups will offer 1% if you are lucky.

------
_random_
Reporting from London: no crunch here so far. Average IT salaries are still on
decade-old £50-60k levels (despite the inflation and rising costs of living).

~~~
quaffapint
Same story in Mid-Atlantic region of US. I get plenty of recruiter emails, but
when I ask, they're paying junior (or sub-junior) level pay for senior and
above talent.

Never recovered from 2008, and I don't see it changing anytime soon. When
companies can continue making more profit, they're going to keep doing so on
the backs of their grunts like us.

Meanwhile we continue to try and figure out how to survive on stagnated pay
with cost of living continually on the rise. I'm trying to do more side work
just to pay my basic bills.

I'd say get out of IT, all the neighbors around me who are in upper levels of
sales in medical/pharm/chem are doing quite well off. Companies still see IT
as a cost and not a benefit and pay as little as they can, which isn't much.

------
FollowSteph3
There's a crunch at today's salaries. Plain and simple. Increases salaries and
a lot more talent will appear. Most people are no longer willing to work at
the rates corporations want to pay. Simple market forces at work ;)

------
cratermoon
There is no talent crunch. It's only a shortage of companies willing to pay
people true market rates.

------
michaelochurch
There isn't one.

The exchange rate between capital and labor (i.e. the most important economic
variable in the global human society) is far out of whack. It's a 9/11-scale
moral catastrophe [0] and has been for quite a while. It's at a low point,
because the concentration of capital has made those with connections to it
into a set of corrupt gatekeepers with more power than any government, and
more than any individual and most businesses.

Anyway, possibly 90 percent of top-talent people are doing work far below
their capability. Travel overseas to some poorer ("third world") countries and
it's 95 or 99+ percent. I know math majors in the Philippines and even in Hong
Kong (which is not poor at all) working call-center jobs.

[0] Yes, depriving billions and impoverishing a significant subset of them
(obviously, the direct victims of Silicon Valley chicanery-- see the
Schmidt/Jobs collusions-- are rarely impoverished themselves; but people in
other countries suffer more severely from the devaluation of labor)
constitutes "9/11-scale moral catastrophe". I invoke 9/11 because it started a
war. Maybe this will, too.

Google's "free massages" have become a lightning rod for this sort of supposed
spoiling of top technical talent. When I was there, you got one per year (on
your birthday) plus one for starting out. It's not like you get free massages
whenever you need to relax. It's not devoid of value, but it comes out to
about $75 per year-- a tiny marketing expense for getting "free massages" out
there. In other words, while top talent's approach value (and, one can derive,
market value and leverage) isn't high, it isn't zero.

Right now, talent and capital exist, both, in abundance. We have shitloads of
both in this world. The problem is a small parasitic set of well-connected
influence peddlers and bureaucrats who've managed to become gatekeepers in
access to that capital (often, passive investment capital that isn't theirs).
The enemy isn't "the rich" (there are plenty of good rich people) or
governments (indeed, many national governments and militaries will be our
allies when we finally go to war on the global elite). It's the fact that
despite an abundance of resources, a small number of players have developed,
through upper-crust favor-trading rather than merit, an egregious and
malignant control over their distribution. There's a term for this:
_corruption_.

But with the number of smart people out there (especially in the poorer
countries) who are working in dead-end jobs, there is definitely _not_ a
"global talent crunch". It's a corruption problem.

~~~
bowlofpetunias
You're simplifying the term "talent". I know a company that does their tech in
the Philippines (not cheap off-shoring, a real, well-funded part of the
company). Yeah, plenty of CS majors but still quite hard to find actual
_talent_ (let alone talent that produces results), and the best are leaving
the country.

Education does not equal talent. It doesn't in the West (hence, local shortage
of _good_ developers), and the same applies to the rest of the world.

The fact that the problem of the corrupt concentration of capital is real
doesn't mean the lack of talent is artificial.

~~~
michaelochurch
_the best are leaving the country._

Filipino programmer salaries are pretty terrible (about 35k PHP per month,
which is around $10,000 per year) but not all of the best are leaving. The US
is pretty damn hard to get into if you're not from a family with assets. Japan
treats Filipinos like shit (it's functionally impossible, and I've heard it
may be illegal, to look for another job while employed, as a non-citizen, with
a Japanese firm). Hong Kong and Singapore pay more than $10k, but still offer
crap wages compared to the sky-high cost-of-living, thanks to third-world
despots, corrupt officials, drug kingpins, and assorted dirtbags from all over
the world buying real estate in those cities (as in London and New York) to
launder their money. Singapore and HK are also disgustingly employer-friendly
(worse than the US, not quite as bad as the Arab slave states). I know Hong
Kongers who count themselves lucky to get 2 weeks of paid vacation (taking
unpaid leave is very stigmatized in Asia).

I won't even get into the Arab slave states, where Indians and Bangladeshis
"look like construction workers" (and won't advance) and Filipinos "look like
maids" (ditto) and even Americans have mini-panic-attacks every time they
write a check (an unintentional bounced check equals jail; someone should
seriously fucking invade that country and liberate the people jailed for being
unlucky).

Australia seems to be the hot destination for Asian talent-- nearby, not that
hard to get into, and paying quite well-- but it's a small country (24
million, which makes it smaller than some Asian _cities_ ) and will not be
able to absorb all of the underemployed smart people coming up right now.

I've actually been studying this, because it involves a business opportunity
I'm looking into. About 30-50% of the people you'd consider "top talent" leave
the Philippines. That's a lot of brain drain, but it leaves a large number who
(for a variety of reasons, such as family or patriotism or preference of the
tropical climate) stay. Right now, they're getting shit wages unless they can
start their own business (but if your family has that kind of assets,
emigrating to the US becomes a real option).

 _Education does not equal talent._

Sure. That is true everywhere in the world, and I think we agree on that.

 _The fact that the problem of the corrupt concentration of capital is real
doesn 't mean the lack of talent is artificial._

Talent is abundant but it's extremely difficult to find, because you have to
sift through untalented pretenders with better social skills, and that's true
no matter where you are in the world. (You typically need to hire someone like
me who are smart and experienced enough to assess it, and we're _even harder_
to find.) It's like dating. Decent, single $GENDER_OF_INTEREST are
paradoxically both common (the bulk number of them is large) and rare (the
broken people go on more dates, so adverse selection plays a role).

Why do large companies, when staffing middle and upper management roles,
acqui-hire utter mediocrity at panic prices instead of promoting from within?
Their middle management filters are too broken to let them spot talent at the
bottom, and they become like hoarders who have copious possessions but have to
buy a new coat each winter because their houses are out of order.

Talent is like fresh water. It's abundant, globally speaking, but (a) it's
sometimes far away, (b) there's a lot of less-fresh water one shouldn't use or
drink, and (c) there's still less of it than one might conceivably want.

Of course, I've stepped around the obvious fact that most businesspeople who
complain about a "talent shortage" are just stingy bastards who can't stand
the (slowly rising) price of talent.

