I have never found it difficult to hire for my dev shop in San Jose and I don't pay anywhere near what I'm told the "market" rate is. I hire engineers fresh out of no-name colleges, self-taught programmers, former freelancers who decided they wanted the stability of a salary and people over the age of 35.
Basically I will hire the people who won't get the time of day from a lot of the big tech companies and rocketship startups and who wouldn't make it through the interview process there if they get through the front door. And you know what? Most of my hires turn out to be entirely adequate and the duds are not nearly as difficult to deal with as everyone says they will be.
Granted my company is not building database engines or running social networks with a billion users but we do enterprise web apps for good clients and we are profitable. This idea that you have to give every employee 10% of the company and 130k a year to get people who can get the job done is a terrible, terrible myth and posts like this perpetuate it.
Your post is a bit baffling. You state flat-out that your "dev shop" does "enterprise web apps" (almost certainly of the most pedestrian and easily automated variety) and that you target groups filled with people who are either desperate or unlikely to understand just how much you depend on them in order to take advantage of them by paying much less than you should. There's nothing mythological about that.
First off, while I appreciate your attempt at criticising the type of apps we build for clients who collectively generate billions of dollars in revenue per year I must point out that most web apps could be called pedestrian. Go through a list of the latest batch of YCombinator startups and I think you'd have a hard time finding many whose apps couldn't be called pedestrian too. An app doesn't have to be complex to be incredibly useful and/or profitable and by the way a lot of the work done at companies like Google and Facebook is pretty pedestrian too. So what's your point?
As for paying my employees less than I should, that's quite a statement given that you don't know how much I pay them. All of my engineers make $65-95k a year. At the lowest end is a recent community college grad who is really talented but didn't have the grades or money to go to a 4 year school because he was taking care of his sick father. I was literally the only company he applied to that gave him the time of day.
I constantly hear (from people like you) that my wages are too low and that I'm going to find it hard to hire good engineers but I have yet to experience this. I can't pay $110k to a new college grad or $140k to an engineer with 3 years of experience but from what I see the number of those jobs is far lower than the number of engineers in SV. Should the engineers who aren't going to even get an interview at Google remain unemployed?
I mentioned on another thread that I have one employee who I know is unhappy with his salary. He has about 4 years of experience and makes close to $90k a year but apparently he got it in his mind that the streets of Mountain View are lined with 6 figure jobs. He's a decent engineer who writes adequate code but he's not the type of guy who is going to pass a white board algorithm test. I know he has been looking and interviewing for the past 8 months and he's still here. If I'm taking advantage of him please explain why apparently no other company has offered him the 6 figure salary he (and you!) thinks engineers are entitled to.
By the way when I started in this industry in the 90s my salary as a programmer was the equivalent of about $38k today. I didn't feel taken advantage of or desperate then and thankfully to this day never got a big enough head to feel entitled to a significant income just because I can write some code.
I won't argue with your point re: web apps being pedestrian. I'd be the first to agree, if it isn't obvious. I have multiple comments here on HN where I scarcely hide my negative view of the pervasive fad-hopping "rockstar" macbook wielding silliness that seems to suffuse certain segments of the Valley.
My point wasn't that you won't be able to hire developers adequate to the tasks you require. It was that your target labor pool doesn't intersect with the labor pool target of companies building "database engines" or scaling up to "billions" of users, and so to compare your compensation packages to companies who are looking for engineers capable of building those things is a bit daft.
Wait a minute. I thought your point was that I was praying on the desperate and taking advantage of people who didn't know what they're worth? I'm glad you changed your tune.
By the way I know plenty of people at startups who tell me they can't find decent engineers when they're offering 30-50% more in salary than I do. And 99% of these startups are NOT building database engines or running massive social networks. Most of them actually have web apps that are on par with the web apps we build for our clients if they are even that sophisticated.
The problem as I see it is that a lot of the management at these startups are deluded about the skill set they need and they lack the intellectual honesty to admit that their startup is not Google (yet). They can't find candidates because they are so in love with the idea of talent, too picky and don't want to invest in employee development. I mean it's not the end of the world if a candidate doesn't have experience with Git or unit testing. This stuff isn't that hard to learn and if your employees have nothing to learn from you they will probably be bored very quickly.
On the flip side all these ads for 6 figure positions and talk about salaries and talent shortages has given a lot of below average, average and good but not great engineers (which make up 99% of the labor pool by the way) the mistaken impression that anybody with a few years experience who can build a crud rails app can make a couple of phone calls and land in a 120k a year job. It's nothing but a mirage. For every 1 engineer who can get one of the $$$ jobs there are 50 who could do a dozen interviews and get no offers.
I didn't change my tune. I still think that you're preying on and taking advantage of the desperate and naive, just like the startups you mention in this comment want to do, but paradoxically expect to also be "rockstars." It's a different kind of naivete the startups are after--they're after bright, gifted engineers whom they can convince to take feel-good euphemisms ("change the way X is done" or "disrupt Y" and HAVE FUN doing it) in trade for reasonable compensation relative to the value the engineers provide.
Those startups should be hiring your developers at the rates they offer, and you should be paying those rates. But because the startups you mention think they need the CS equivalent of Einstein and Feynman to run their CRUD stack, your developers are ones they pass on (and then whine about a talent shortage), and allow you to pay the below-market rates you get away with, because in your segment of the market there is, apparently, an excess of labor available. Your description, in other words, isn't a counter to my point.
It's lovely that apparently you believe anybody who can build a crud app deserves a 6 figure job but reality is based on the supply and demand, not your utopian dream world.
The bay area is expensive but I am proud that I can provide salaries substantially above the median household income in the US with decent benefits. How many people do you provide $65-95k a year jobs to? When was the last time you hired people who had been rejected by every other company they applied to because nobody was willing to look at their potential and take a chance? What percentage of community college graduates do you think make $65k a year to start? Heck what percentage of 21 year olds you even think make $50k a year? It's easy to criticize me and tell people who don't have 6 figure jobs that they're selling themselves short but hey talk is real cheap.
By the way a ton of the startups offering those 6 figure salaries don't earn enough profit to pay those salaries. Their investors are paying those salaries. What do you think is going to happen when the money runs out and there are no more sinking ships to jump to? Will you suggest that the unemployed engineers cling to their tulips?
enterprise consulting teams face a perverse incentive to be less efficient than product teams - a consultancy can actually kill itself by being too efficient
That's not always true. Most of our projects are fixed price so efficiency is very important. If the scope doesn't change and we're inefficient I lose money.
Your last sentence is the best advice to give to any company in this market. My dev shop is doing just fine and I'm not paying anywhere near what I'm constantly told the "market" is. I wish I could but then I wouldn't have a business.
When my best engineers want to move on to bigger and better things I support them. It would be nice to keep them of course but I'm honest enough with myself to know that I don't need the type of engineers that can get a job at Google.
My retention rate with my "adequate" engineers is very high. Most of the ones that I know have complained about money find out that it's one thing to see jobs that pay $$$$ and another thing to actually get those jobs.
I run a dev shop in San Jose. I hear all the time that the "market rate" is a good 40-50% higher than what I pay my engineers but I have all the engineers I need. Are they the best engineers in the world? If we're talking about pure talent no, but we're not doing anything exotic. We build modestly complex web applications for enterprise clients.
Have I lost engineers? Yes. In the past 3 years I lost 2 of my favorite employees. I was disappointed but it wasn't a surprise and I supported their decisions. They were superb engineers and I knew that they would one day go on to do great things. It wasn't just an issue of not being able to match the salary of a publicly traded tech company. These engineers were destined to work on the type of things we just don't do here. So why would I want to hold them back?
On the flip side I have one engineer right now who I know is looking to leave. He told one of our other employees that he's unhappy with the pay and thinks he can get a better job at a big tech company. Guess what? I heard about this 8 months ago and he's still here. I know he has interviewed elsewhere but you see, for every engineer who can get a $$$$ job at a tech giant or rocketship startup there are 50 engineers who THINK they can. And then they find out they can't.
There is no shortage of engineers. The big names often get 100s of applicants for every open position. But you need to be really, really good, not just at your job, but at the interview process. The interview process at some of these companies is so difficult that a lot of very good people get filtered out.
So I have no problem finding engineers at "below market" and still manage to deliver good work product to our customers at good margin. Apparently I'm doing the impossible!
I have never found it difficult to hire for my dev shop in San Jose and I don't pay anywhere near what I'm told the "market" rate is. I hire engineers fresh out of no-name colleges, self-taught programmers, former freelancers who decided they wanted the stability of a salary and people over the age of 35.
Basically I will hire the people who won't get the time of day from a lot of the big tech companies and rocketship startups and who wouldn't make it through the interview process there if they get through the front door. And you know what? Most of my hires turn out to be entirely adequate and the duds are not nearly as difficult to deal with as everyone says they will be.
Granted my company is not building database engines or running social networks with a billion users but we do enterprise web apps for good clients and we are profitable. This idea that you have to give every employee 10% of the company and 130k a year to get people who can get the job done is a terrible, terrible myth and posts like this perpetuate it.