Doing Business in Silicon Valley – Attracting and Retaining Talent
I recently spent time with the “Chief Talent Officer” of a major Silicon Valley company and a group of Executive MBA students from Europe. For almost 3 hours we discussed how recruiting and retaining talent has evolved in Silicon Valley.
Let’s start with the brutal facts. In key technology area, Silicon Valley has a negative unemployment rate. There are more job openings than there are people to fill the jobs. The problem is extreme in emerging, high-growth technologies such as machine learning (and other aspects of AI), big data, autonomous vehicles, and product management.
The result is that talent is expensive. Salaries in Silicon Valley are at least 20% higher than in most other locations in the United States. It’s not just the technologists. A senior marketing person can make $250K USD per year. A great sales person can easily make $400K per year. And because there is such demand, people change jobs at an incredible rate. The average time someone spends at one company is under three years.
So as a newcomer, how can you effectively compete for talent – and retain it. Here are the key takeaways from that meeting:
Include equity in your compensation model. This is not at all common in most places outside of Silicon Valley. But it is a hard and fast expectation here. Google, Apple, Facebook and Amazon all offer stock to their employees. Google alone gave out $5.3B in stock-based compensation last year. If you don’t offer stock. They won’t join. It’s just that simple.
Highlight the mission of the company. All the research shows that millennials want to be part of an organization with a mission that aligns with their core values and that will have a meaningful impact on the world. I know, not every company has a “cool mission.” But to the degree you can, share with potential employees the impact they will have.
Showcase the Challenge. Most technologists love a big, complex problem to solve. They hate being bored. Help the them understand the scope and degree of difficulty of the work. It doesn’t have to be technically hard. It could be involvement with customers. It could be research. Because the moment they are bored and feeling un-challenged, the best people will be looking for their next opportunity.
Turn your entire team into recruiters. This is not about offering employee referral bonuses. You want to help your team understand that by finding the next team member, they are in effect getting to select who they want to work with.
Be flexible on work location, dress code, etc. Most companies in Silicon Valley are exceptionally flexible when it comes to where people work, when they work, dress code and other things. Many people work several days a week from home – or even from another city. They may start their work day at 4am – because they are more productive early in the morning. And they are very casual in how they dress. Trying to enforce a dress code with mandatory 9-5 work hours will make it almost impossible to recruit top talent.
Hidden in all of this is a key takeaway for a non-US technology company wanting to move to Silicon Valley. To the greatest extent possible, leave your technology team at home. Focus on using Silicon Valley as a place to access markets and capital, but not as a place to build product.