
European startups battle labor laws for best talent - robk
http://slashdot.org/topic/cloud/european-startups-battle-labor-laws-for-best-talent/
======
ardit33
There are two macro trends here: 1\. More software is needed in almost every
part of life (i.e. think of cars, now over 20% of a car's R&D goes to software
for its systems, compare it to the same type of car 10 years ago), and so on.

2\. Due to the low central bank's rates there has been a divulge of money, a
lot of which has ended up on startups/seed investing. Most will go no where,
but they need engineers, yet they can't afford them as they are not
profitable, or really just speculations.

So, more engineers are needed, yet a lot of these companies can't afford to go
to bidding wars for them as they don't have solid financial footing, hence you
see so many of these "there are not enough engineers" articles, yet salaries
are only increasing few percent a year at best.

So, this extra engineering demand is created by companies (i.e. startups) that
have a great chance of failure, and will just go away as soon as money starts
becoming tight again.

Which means, one the longer term the larger companies (the ones that actually
make money) will dictate the salaries of engineers. Since they tend to move
slowly, compensation of engineers will do so, only few percentage a year,
probably a bit over the inflation, reflecting the long term Macro trends on
more software being used everywhere.

I haven't heard any of the crazy 1999-2001 stories yet, so I'd say this feels
a lot like 2006-2007 (the Web 2.0 boom), which ended up with a soft 2008-2009
period.

~~~
nolite
I think you really nailed it with this analysis

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BSousa
This last couple of weeks I've been contacting some companies (start ups and
established ones). It seems London is really up there with a talent shortage,
but except for one or two established companies, none of them pay any decent
money for senior developers to actually live in London.

I live in freaking Portugal with low wages and high taxes. Taking most of the
offers that were presented would mean losing a lot of purchasing power at the
end of the month. How can you expect to bring people to one of the most
expensive places in the world, and try to pay them just a bit above average
the UK salary?

So as in the US, there is only a shortage because employers don't want to pay
what the market is expecting. (note about the article, the fact companies are
paying individuals off the books, actually means the companies are actually
saving between 20 to 50% (depending on jurisdiction) over the gross salary,
again, more related to money than 'visa' issues)

~~~
jandrewrogers
I do not buy the argument that employers simply do not want to pay. That might
be true in Europe but not in the US. If that was true then it would not be the
case that everyone is having difficulty finding employees; many companies pay
very well and are still in that position.

Here are _average_ US regional tech wages in 2012 according to the TechAmerica
Foundation:

California: $123,900

Massachusetts: $116,000

Washington: $110,200

And I know at many companies the average is more like $150,000 and still have
a very difficult time hiring software engineers. I doubt most of the public
will be sympathetic to claims that the only reason these positions go unfilled
is that companies are unwilling to pay an appropriate wage.

~~~
Glyptodon
Your stats are a farce. I've never met a programmer/software developer in my
life who makes more than 100k if they aren't essentially management. Median US
salary for a software developer is $69,564. The 90% percentile is 100k. Please
come back to planet Earth.

Likewise, in places where wages are higher it appears to be mostly about cost
of living. The last time I calculated it out making 50k in the armpit of
nowhere USA turned out pretty close overall to making 75 or 80k in SF or NY
with taxes, commute time, and cost of living factored in.

~~~
potatolicious
You've just met one. Pleased to make your acquaintance.

 _Quite a bit_ above $100K too, and I don't even consider myself a
guru/ninja/pirate/whatever programmer either.

I'm not alone either - _literally_ every programmer I keep in regular touch
with, and _literally_ every programmer at the shop I work at is making well
into the $100s. In fact, a good friend of mine the same age as me (mid-20s)
just accepted an offer in the $180s.

The cost of living argument is also mostly bull. I've lived and worked in 7
different cities, ranging from cheap $300 rooms on the wrong side of the
tracks to $2000+ luxury high-rises. Nowadays I live in Manhattan, and I've
done the math multiple times - it costs me about $20K more per year (with
fairly generous numbers) to live here than in, say, Seattle WA where I once
worked. Of course, the pay difference between NYC and elsewhere is a _lot_
higher than $20K. Even accounting for taxes, food, and everything you're still
coming out well ahead.

~~~
Glyptodon
The COL is bull if you're making a huge salary, sure. Then it doesn't matter
where you live. But if you made $50k/year and got an offer to work somewhere
for $75k/year but the cost of living was $20k more, it wouldn't make sense.

I know some of the best developers in my college class have ended up getting
paid 45k to 65k a year in places like Phoenix because that's what was
available job wise.

~~~
potatolicious
Right, and that's my point. Moving from my baseline of Seattle to NYC is
virtually guaranteed to raise your salary by _far_ more than the $20K extra.

I've done the same math from almost everywhere I've ever lived, and both SF
and NYC still come out on top. The market salaries in those cities _do_ make
up for the cost of living, and then some. The whole "SF and NYC are bullshit
because you end up losing money after cost of living adjustment" argument is
bull, specifically because the market salaries between it and other cities in
the US doesn't bear this out.

> _"I know some of the best developers in my college class have ended up
> getting paid 45k to 65k a year in places like Phoenix because that's what
> was available job wise."_

Sadly, the availability of jobs is not _very_ highly correlated with
programming ability. And I say this in a non-snarky way. The top end of the
software industry is _very_ much an exercise in pedigreed degrees, networking
acumen, and fake-it-till-you-make-it.

We're really not that much better than the business majors we like to make fun
of.

------
rmoriz
Developer shortage is a lie (in Germany). If there would be a real shortage,
the amount companies pay to contractors and salaried employees would rise.
Instead it's decreasing!

e.g. some companies in Berlin are trying to find developers that work for
below 50€/hr (you have to pay ~600€/month for mandatory health insurance,
600€+ for a room, 100€ for public transporn, 100€ mobile phone, retirement
provision / buffer for bad times — and ~35-40% taxes before that). Usually
there is no participation in the company (stock options) because there are no
going public-exits.

It's mainly a bubble to attract cheap developers from other parts of Europe,
female developers and junior developers willing and eager to get work even if
payment is bad.

This is great but it's still a lie to tell everyone that there is a shortage.
If you pay low, it's hard to find people. Simple as that.

~~~
onemorepassword
Bull. Startups can't pay more because there's no investment capital.

Established and successful companies that pay well still can't get people. The
shortage is real.

~~~
rmoriz
Nope. Even companies with a large sum of VC, let's say >5m€ don't pay fair
salaries. Siemens, Allianz, younameit pay way more + have a lot of benfits,
less stress more (real) job security and a development perspective (career
path).

Same for freelancers.

Sometimes I see very large teams of mediocre developers. Why didn't they hire
2-3 (more expensive) experts instead of 10 juniors? Maybe because they doing
this because of an aqui-hire exits or some ridiculous "hire 10 people" todo
that their VC dictate.

~~~
ccdan
>>Why didn't they hire 2-3 (more expensive) experts instead of 10 juniors? <<
For the same reason they don't hire 2-3 architects instead of one architect
and 10 workers to build a small house. Actually hiring solely "experts" the
productivity may be lower because they're used to doing only certain kinds of
things.

~~~
rmoriz
Experts are developers, too. They code faster/have a better focus.

An architect usually can't build a house.

~~~
ccdan
Yeah, but there are large software systems with a lot of boring, repetitive
stuff that is being done.

~~~
rmoriz
In startups? Then they're doing it wrong. Even in enterprise-size businesses
they're doing it wrong. If manual repetition of a task occurs it has to be
automated or refactored if it costs significant developer time (=money):
<http://xkcd.com/1205/>

~~~
ccdan
Repetitions are often a result of changing requirements things that can't
(normally) be automated. If you think that enterprises are doing it wrong and
you know more than them, you could become rich by showing them the right way
of doing things - on one condition: you have to prove what you're claiming. :)

~~~
rmoriz
It's a myth that large companies have a lot of repitition tasks. They know how
to automate. No need to tell them what they already do.

As my postings are focussed on the German market, I rarely see real Lean
Startups that. It's still very common to build one thing big and to hope that
it succeeds. So actually you don't start from scratch more than 1 time except
some low profile developers messed it up.

------
Glyptodon
If there really were a problem wages would be increasing drastically, my Alma
Mater's CS department would be spamming its graduates with employment
opportunities, and there'd be loads of non-Java, non-.Net job ads in places
besides the SF Bay Area, New York, and other 'startup hubs,' but there aren't.

Your stats are a farce. I've never met a programmer/software developer in my
life who makes more than 100k if they aren't essentially management. Median US
salary for a software developer is $69,564. The 90% percentile is 100k. Please
come back to planet Earth.

Likewise, in places where wages are higher it appears to be mostly about cost
of living. The last time I calculated it out making 50k in the armpit of
nowhere USA turned out pretty close overall to making 75 or 80k in SF or NY
with taxes, commute time, and cost of living factored in.

update: I'd meant to reply to a specific comment. Oops. I'll also caveat that
different sources seem to use software developer to mean different things. I'd
consider a web developer a software developer, but they supposedly get paid on
average significantly less, probably because it draws in a lot of self-
described people who do websites but don't really program.

~~~
Ovid
Recently, my wife and I started a company and she's handling the international
IT recruiting side (I do consulting/training) and for years I've written a
blog about how to be an expat. I'm actually a freelance software engineer with
a background in economics. This leads to me to having an _extreme_ amount of
knowledge about this topic and while the article had a few issues, it's mostly
spot on.

There is a significant shortage of developers and ardit23 explained, with
rapid growth of young companies fighting to hire developers but not able to
pay Google-sized salaries, the vast majority of the job salaries are
constrained by limited budgets of entrepreneurs. Until this industry
stabilizes, it's going to be hard to get accurate price signals.

And despite your contention, I know of _plenty_ of devs who make >100K. I
speak at conferences all over Europe and the US and I meet these people face-
to-face all the time. Just because you don't know them doesn't mean they don't
exist. That being said, part of the reason I know roughly what they make is
because they work for big names like Google, or they are in-demand freelancers
(we can charge buckets of money in the right situation). Hell, I know one guy
who made €30K for a week of training! (search for top-notch training, note the
cost per student, multiply that by a decent class size and five days. You
don't turn that trick very often, but when you do, it's a lot of money).

And $75 to $80k in New York? No way in hell I'd take pay that low to work
there.

~~~
Glyptodon
Oh, I believe developers who get paid that exist. But they're the exceptions
who happen to all meet each other because they get sent to conferences and are
team leaders or primary devs on large open source projects and such.

If they were the rule the average salary would be 100k but it isn't, and all
the 100k + devs you supposedly know aren't enough to move it.

I wouldn't take 80k to work in New York either, hence why so many startups
whine about not being able to find 'talent.'

The 'shortage' is mostly a symptom of companies only wanting to hire these
celebrity developers who already make a lot of money (and Stanford grads).

Likewise, the hoops you have to jump through in job interviews would be
shrinking if people were really desperate to hire, but instead they're
growing. Have a giant github. Do two 4 hour technical interviews. Only apply
after solving 2 to 5 programming problems. Etc.

------
carlob
Terrible title. It seems to me it's more about immigration laws rather than
labor. The only paragraph where labor laws are mentioned is where the French
vc talks about 9 companies evading social charges because they are too
expensive.

If you don't want to hire talent you can get them to consult with you, but
that will shift the social charges on them and will make them less secure, so
they'll ask for more by the hour.

------
zwieback
This description of the European startup labor "shortage" sounds so similar to
reports from the US that it makes me wonder how diametrically opposed
political systems end up with the same set of problems. Of course, when it
comes to immigration forces on both ends of the political spectrum aren't so
different. The populism of the left and right wing differs in rhetoric but not
is substance.

~~~
onemorepassword
You would be surprised to learn that immigration for qualified tech and
science people is a lot easier in many European countries than it is in the
US.

An American with a job offer can easily get a work permit in the Netherlands,
no quota and nice tax rebate to boot.

The shortage is the same for the same simple reason: qualified people simply
aren't there. We can hire from the US, Canada and all of the EU, that still
doesn't solve our problem.

~~~
eli_gottlieb
Actually, I think qualified people _are_ there. But the job market for
programmers right now is a bit like the dating market: the _really good_
prospects, at any given time, will most likely already be involved with
someone. So the _reserve army of unemployed programmers_ is really tiny.

------
onemorepassword
Romanians are an issue, but for completely other reasons. Quite frustrating,
but nothing to do with labor laws or visa in general.

But other than that I've never had or heard of any such issues here in
Amsterdam. Locals are getting outnumbered in the tech-scene. The majority of
my team is now non-Dutch, and not because it's cheap, because we pay well.

~~~
ovidiu
Can you please elaborate on why Romanians are an issue? I'm curios because I
am one and I'd like to know more about your perception.

~~~
onemorepassword
It's not "perception". Recent studies have shown that about half the Romanians
in the Netherlands are here illegally, and most of those are criminals. And
those that are here legally don't always work under legal conditions.

This royally sucks for Romanian developers that want to work here, because
despite being EU members they still need a work permit. The government
basically assumes that the odds of Romanians coming here with good intentions
are pretty low.

------
Ovid
The article was good, but there are a few issues.

My background: I went to uni to be an economist, but I'm now a freelance
software consultant/trainer. Also, for years I've written a blog about how to
be an expat and on top of that, my wife and I run a company and she handles
international IT recruiting. In short: I know a ridiculously large amount
about this topic (except for the black-market work).

> Schools and universities are failing to equip young people with the skills
> that twenty-first century digital businesses need, these people say.

That's not true at the university level. At least here in Europe, increasing
amounts of people aren't taking degrees in STEM technologies. If people won't
seek the degrees, there's not much the universities can do. At a younger age,
public education could be doing more to help here, but aside from interesting
ideas like Estonia teaching children to program
([http://www.forbes.com/sites/parmyolson/2012/09/06/why-
estoni...](http://www.forbes.com/sites/parmyolson/2012/09/06/why-estonia-has-
started-teaching-its-first-graders-to-code/)), you're going to have to have
government support around a wide-spread approach of schools trying to interest
students in IT.

> The time and expense that Navarro says is necessary to import a European
> national to work in the U.K. is not insignificant. The paperwork alone costs
> $1,000.

That's misleading. It's sort of true if you're a medium or large employer
hiring tier 2 workers ([http://www.overseas-exile.com/2012/08/we-dont-sponsor-
work-p...](http://www.overseas-exile.com/2012/08/we-dont-sponsor-work-
permits.html)), but ... that's a one-shot cost for becoming a licensed
sponsor. After that it's making a job offer and issuing candidates a
sponsorship number (which costs £184 for a tier 2 or £14 for a tier 5). Yes,
there are still costs in bringing them over, but not

No, the real issue with the UK is that they currently limit non-EU skilled
workers to 20,700 per year (unless you earn over 150K). As a result, you want
to import your workers early in the year. Need a specialist in October? Ha!
Good 'un, guvnah!

Of course, like the US, UK university graduation rates are dropping as
tuitions rise, causing them long-term issues that they can't offset with
importing enough skilled labor because both countries are limited said import!

Also, it's disappointing to see the article failing to mention the European
Blue Card. That's one of the most exciting opportunities that Europe now has.
Designed to fight against the US Green Card, it's a way to allow European
countries (minus the UK, Ireland and Denmark) to import skilled workers with
very little paperwork or hassle. Stay in your first country for a few years
and you have the entire EEA labor market (minus caveats above) open to you! In
Germany, for example, it's almost as simple as getting a job offer and moving.
It's paying off well for Germany and it's going to be a long-term game changer
for the EU if they can overcome their Euro troubles.

------
seivan
Allow remote, problem solved. "Talent shortage..... within 60 miles"

~~~
zwieback
Just trading off one problem for another but remote work is definitely part of
the solution.

