Companies in Silicon Valley are going to nearly endless lengths to keep critical employees. The most dramatic example: Google paying upwards of $150 million in retention bonuses to a couple of “indispensible” employees. MarketWatch says salaries are rising so quickly that shareholders and investors are growing concerned. Higher salaries increase the cost of benefits and health insurance, adding pressure to businesses just as they’re trying to gain profitability or establish a positive record with shareholders.
The console game business has been called “recession-proof” and one of the most stable sectors in technology, but pressure from social media and mobile gaming is taking a toll on its workforce. More and more consumers would rather play social and mobile games than pay several hundred dollars for consoles. Sales of consoles such as Sony’s PlayStation 3 and Microsoft’s Xbox 360 have been weak, so companies like Activision, Disney Interactive and THQ have all conducted layoffs. They’re also shifting focus to social games, where sales have been growing more quickly and the profit potential is greater. Zynga, producer of the immensely popular Mafia Wars and Farmville, plans to double its 1,500-person workforce this year.
A survey published by Silicon Valley Bank indicates more startups will create jobs this year than they did in 2010. Among the 375 surveyed companies (206 in software/Internet, 63 in hardware, 83 in life sciences and 23 in clean tech), 83 percent have plans to hire during 2011, up 10 points from last year. More than 25 percent say hiring remains one of the biggest challenges they face. Among the factors: high compensation packages and the area’s high cost of living.
Most organizations – 80 percent – don’t have the talent they need to fill technical roles expected to emerge by 2015. Rather than offer training or coaching to existing employees, they plan to fill openings with new hires or outsource work to consulting firms. Some of the changes anticipated by the Corporate Executive Board:
- Sixteen roles that were a part of the IT department in 2010 will move to multifunctional shared services and/or business units.
- 88 percent of IT-related roles will be able to be filled by employees without technical backgrounds.
- A third of today’s IT roles will see declines of 80 percent or more in the number of positions required.
American manufacturers are expanding more quickly than they have in nearly seven years, but they can’t find the technology help they need. The shortage will only get worse as Baby Boomers retire. According to a survey conducted by KPMG, nearly 41 percent ofU.S. manufacturers plan to increase hiring in 2011. That could mean 230,000 new jobs before the end of the year, not counting jobs on assembly lines, order fulfillment or similar areas. Companies need mechanical and electrical engineers and professionals who can read and write machine programming code, design mechanical systems and troubleshoot problems.
Employers plan to hire more computer science graduates this year at an average starting salary of about $63,000. Small companies and startup technology firms are the most aggressive. Last year’s graduates faced stiff competition as employers averaged nearly 40 applications for every job posting. This year, the average has dropped to 21. Entry-level demand hasn’t returned to pre-recession levels, but it’s strong for engineers as well as developers for traditional applications, Web sites and mobile applications.