A Blog by Jonathan Low


Mar 24, 2016

Tech Workers Are Getting Choosier About Changing Jobs

Caution. Prudence. Incremental. Safe. Revenue-generating. And, strap yourself in, profitable.

These are among the words tech workers want to hear, as the following article reports, now that fears of a shake-out in tech are beginning to cause once risk-embracing coders and their marketing or project managing colleagues to assess the future. Sounds almost, well, corporate...JL

Rachel Feintzeig reports in the Wall Street Journal:

Prospective hires are sizing up startups and stock awards, wary of boarding a sinking ship. Recruits are requesting chats with a startup’s investors during recruiting. The word “explosive” in job postings were down 15% compared with the same period last year. On the rise are confidence-inspiring phrases “venture capital,” up 61%, and “revenue,” up by 8%. Signing bonuses have shrunk at cost-conscious companies but haven’t gone away. Candidates, meanwhile, push for cash over equity. Compensation is holding steady
Thumbtack Inc. received a flurry of job applications last fall after closing a funding round that valued the local-services website at well over $1 billion.
These days, amid sinking stock prices at some tech firms, falling startup valuations and a chill in venture funding, potential hires have a flurry of questions about the company’s spending, revenue and ability to weather a downturn.
Worries of a coming shakeout are rippling through the ranks of Silicon Valley’s tech workers. Recruiters say engineers at once-buzzy companies like Dropbox Inc. and Twitter Inc. TWTR -5.04 % —which recently granted new stock awards to halt a wave of exits—now take their calls. Yet the prospective hires are sizing up highly valued startups and the stock awards that come with them, wary of boarding a sinking ship.
Young companies count on luring workers with the promise of a huge potential upside for their equity awards, but that pitch has gotten tougher as stocks tumble and mutual funds reassess the value of their startup investments. Fidelity Investments, for example, in January marked down the value of its stakes in 13 of 26 startups valued at over $1 billion, according to the Journal’s startup stock tracker.
Shares of LinkedIn Corp. LNKD -0.85 % and VMware Inc. VMW -1.89 % have dropped 56% and 40%, respectively, in the past year. And, for venture-funded tech firms that have gone public since 2014, more than half were trading below their initial offering prices in February, a Journal analysis found.

Jeff Winter, Thumbtack’s director of technical recruiting, says he is having little trouble getting engineers on the phone, but since Christmas it has been harder to close the deal. Offer acceptance rates have fallen about 5 percentage points from last year, and more candidates tell him they are talking with behemoths like Google Inc., attracted to the security that established companies can offer. One womantold him that her parents urged her to take a “safe” job with Google.
“People are anchoring ships in safe harbors,” Mr. Winter says.
Redpoint Ventures’ head of talent Amy Knapp advises 15 to 20 startups on hiring matters, and says many recruits are now requesting chats with a startup’s investors during the recruiting process. Workers at later-stage startups or stable companies have become less willing to leap for new ventures, even if they’re unhappy in their current roles, adds Ms. Knapp, whose advisees include parking and valet-services startup Luxe.
“Eighteen months ago, it was who has the most perks,” says Sarah Wagener, Pandora Media Inc. P -2.95 % ’s vice president of talent acquisition and diversity. Potential hires now ask about the company’s sinking share price. It closed at $9.83 on Tuesday, down from over $20 in October. After Pandora’s latest quarterly earnings call, Ms. Wagener brought in the company’s head of investor relations to instruct recruiters on explaining the results.
Adam Fishman, a 33-year-old growth and marketing executive who recently completed a hunt for a tech marketing job after his old employer closed its San Francisco office, says perks strike him as a sign that a firm isn’t spending wisely.
“I’d rather have the company have a long lifespan than have a hoverboard riding around the office,” he says.
In postings for tech jobs, a more subdued tone has supplanted the hyperbolic rhetoric of last year, typified by an email that health-insurance brokerage Zenefits Inc. sent out to potential recruits describing an “EPIC” round of funding as a “LEGENDARY” development.
An analysis conducted for the Journal by labor-market data firm Burning Glass Technologies found mentions of the word “explosive” in job postings in San Mateo and Santa Clara counties—the heart of Silicon Valley—were down 15% this January and February, compared with the same period last year. On the rise are the confidence-inspiring phrases “venture capital,” up 61% over last year, and “revenue,” up by 8%.
Signing bonuses have shrunk at cost-conscious companies, recruiters report, but haven’t yet gone away. Candidates, meanwhile, push for cash compensation over equity stakes. And some managers are fighting to keep staff from fleeing. For example, Twitter is doling out cash bonuses and restricted stock to workers who have watched the company’s stock drop 65% over the past year.
Compensation overall is holding steady. The average pay for tech jobs in the San Francisco and San Jose metro areas was $197,411 in 2015, according to labor-market analysis firm Economic Modeling Specialists International. The average value of equity stakes held by engineers, product managers and data scientists was $236,066 in February, according to Paysa Inc., which tracks compensation for those professions.
“I used to look at equity and think every company was going to be the next Facebook, FB 0.26 % ” says a 29-year-old designer at a San Francisco startup. “Now when I see equity I’m like, ‘That’s nice but I want it in actual money.’ ”
The designer, who didn't want his name used since he is looking for a new job, is approaching his search cautiously—for one, he won’t interview at companies planning to raise money in the near term.
Hailing the new sobriety are bosses like Aaron Bell, the chief executive of AdRoll Inc., a San Francisco advertising technology firm. “Last year, it felt more like a thunderdome match for talent,” he says.
After growing to 500 employees in 2014, Mr. Bell kept head count relatively steady in 2015, sensing trouble brewing in the capital markets. AdRoll added relatively few full-time hires in 2015, preferring contractors instead. Late last year, the company became profitable.
As AdRoll ramps up hiring, Mr. Bell says the engineers he is wooing appear to have fewer competing offers. The share of engineering candidates accepting jobs is up 30% this year compared with 2015, Mr. Bell says. Retention rates among existing staff have improved, too.
As companies tighten their belts further, recruiters themselves may be the ones on the outs. GoPro Inc. GPRO -5.40 % and Instacart Inc. shed recruiters in recent months, and Pandora ended four recruiters’ contracts in December, according to Ms. Wagener. The company intends to fill 700 jobs this year, down from 900 in 2015.
Chris D’Elia, a recruiter at 11-person mobile-application startup Swipe Labs Inc., has been pleased that engineers at Twitter are taking his calls. Yet the same potential “venture winter” that is spooking job candidates may soon threaten his livelihood, too, he says.
“We need to be hiring for me to have a job.”


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