Seattle’s Tech Job Crunch: How Long Can the Valley Invaders Poach from Microsoft, Amazon Before the Talent Well Runs Low?
Another month gone by in Seattle, and another Silicon Valley company has moved in to establish a beachhead for recruiting tech workers. And they all seem to say the same thing: This area is rich with talent.
That’s certainly true—not to mention cheaper, compared to the Bay Area. But all of those companies often wind up chasing the same pool of experienced workers—a pool that Washington state isn’t adding to fast enough by cranking out computer science graduates of its own.
It’s a situation that can’t be sustained if the region is to maintain its prominence in the tech world. And if it isn’t fixed soon, some worry that the mega-companies currently feeding the pipeline—namely Microsoft and Amazon—could tire of poaching and immigration woes and cut off the supply, establishing more satellite offices where the workers already live rather than investing a lot to recruit them to the Northwest and then lose them.
“They have to spend a lot of money to recruit talent around the world to come here,” says Eric Schinfeld, who works on regional economic development for the Prosperity Partnership. “If I’m Microsoft, how long do I want to subsidize everybody else stealing my employees?”
Here are the big numbers: In the second quarter of this year, state labor economists expect about 88,400 people in King County will be employed in computer science-related jobs. That figure is projected to rise to almost 95,000 by 2013, and climb to about 105,000 by 2018. Between 2013 and 2018, labor economists expect the number of job openings to average nearly 3,700 per year.
Washington’s colleges aren’t churning out enough grads to get those precious jobs. According to U.S. Department of Education statistics, fewer than 1,000 computer science degrees were granted to master’s and bachelor’s students in the 2008-09 school year across all colleges in the state—a positively middling performance. Washington schools ranked 23rd among states in producing computer science bachelor’s degrees, with 736, and 24th in master’s degrees, with 213. The state is getting beaten in those rankings not just by the usual suspects—California and Massachusetts—but also by states like Colorado, Minnesota, and Missouri.
Meanwhile, the slow economic recovery is crimping our sales-tax dependent state budget, which means Washington’s almost entirely public university system is not likely to see large, sustainable additions in enrollment anytime soon. It’s ironic: The tech sector is robust, expanding, and pays well. But that economic performance doesn’t show up very well in the flow of money feeding educational growth, because Washington doesn’t have an income tax. So in some ways, the slower parts of the economy wind up holding back the pipeline of talent for the parts that are charging ahead.
Ed Lazowska, the the University of Washington’s Bill & Melinda Gates chairman in computer science, says the last sustainable increase in state spending for higher education enrollments was around 1999. When the state cuts its support, universities like UW respond by adding more out-of-state students to the mix because they pay a higher, unsubsidized tuition rate.
“It kind of sucks that the children of Washington parents can’t get into the University of Washington and pursue a STEM (science, technology, engineering, math) degree because there’s not enough slots,” says entrepreneur Jeremy Jaech, chairman of the Technology Alliance. “But it’s not likely to change anytime soon.”
Meanwhile, signs of the coming tech job stampede continue to build all around Seattle. Facebook opened its office here last fall and is growing. Since then, Zynga, Splunk, and Jawbone also have announced expansions to the area. Twitter has purchased local startup Cloudhopper, and Salesforce.com recently moved into expanded digs in South Lake Union. Google, a relative veteran on the Seattle scene, keeps on hiring.
Established companies are still doing their bit. My search of the job board on Microsoft’s corporate site turned up at least 534 tech jobs in the region—it’s probably a lot more than that, but several of the biggest categories hit the 100-job search limit. The Seattle Times recently pegged Amazon job postings for tech talent at more than 900, and Google recently told the paper that its area offices ended 2010 with about 800 people. According to data compiled for Xconomy by job-search aggregator Indeed, there are around 1,300 unique postings for software engineers in the greater Seattle area right now.
In that kind of environment, it’s no wonder smaller companies are having to work a lot harder to find workers. Among them is SEOmoz, the Seattle-based company that recently started offering a $12,000 bounty to anyone who refers a successfully hired software engineer. It’s an aggressive, but well-established tactic in California that stirred up some headlines in the Seattle area. Chief Executive Rand Fishkin says SEOmoz got about 300 candidates based on the promotion. But he had to get the company in front of about 60,000 to 100,000 eyeballs to generate those leads, and after several weeks of combing through resumes, SEOmoz had hired just two people out of the roughly 10 they were shooting for when I talked to him last week.
“Two years ago, you put a job on Craigslist, you’d have 50 to 100 applicants. Times have really changed,” Fishkin says. “An ad on Craigslist from us now gets 20 to 30 applicants. The vast majority of them are clearly not qualified.”
Fishkin is a little bemused by the situation. After all, he says, SEOmoz is a steadily growing, profitable business that offers a small-company atmosphere to techies who don’t want to get lost in the vast hallways of a major corporate campus. Since when was that such a hard sell?
“It does make you feel weird,” Fishkin says. “It makes you feel that there’s something strange going on in the market when you’re not an exciting company.”
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