While some companies find attracting solid technical talent difficult in a dot-com world, others are flush with qualified candidates. IPOs may be responsible for this unevenness. In many cases, employees want a shot at the big score in the form of pre-IPO stock options. Some companies have given up and instead rely on partnerships and acquisitions to gain access to talent.
During the Network Processor Summit at the Networld + Interop show last March, a marketing manager from a semiconductor company was airing his hiring woes.
Along came Dave Carr, senior director of architecture for Silicon Access Networks, who overheard the conversation and couldn't help but parade his good fortune. His company had been hiring like mad, and in just a few months had swelled to 90 employees between its Ottawa and Silicon Valley offices. Silicon Access couldn't hire them fast enough. "We're doing great," Carr said, rubbing it in a little.
Silicon Access, in addition to having intriguing technology in the red-hot communications sector, is a pre-IPO startup. The other executive's chip company had gone public long ago.
With engineering talent scarce, employees with sought-after skills can afford to be picky, and workers tend to pass on opportunities with companies whose IPOs have cooled.
But even companies poised at the brink of their public offering wonder whether startup fever can benefit them in the long run. Executives of photonics startups, speaking on panels at the WDMCon conference in late May, were realistic: Sure, we're hot now, they said, but engineers will turn their fickle eyes elsewhere once our IPO launches.
"It ain't gonna last forever," said Steve Pearce, chief executive officer of Sonet startup Cyras Systems Inc. (Fremont, Calif.). "When a company goes public and their valuation is high, it gets harder to hire. Engineers say, 'You've already popped. There's nothing here for me.' "
Krishna Bala, chief technical officer of Tellium Inc. (Oceanport, N.J.), agreed. "If you go public, the only way to gain talent is to acquire [other companies]," he said.
In some cases, it's better not to waste the energy trying to hire, Bala said. "We're going to have to make strategic partnerships with companies [to outsource software work] and not fight for the same six engineers in Silicon Valley that everybody's fighting for."
Cyras and Tellium are in geographic zones rich with startups, but being away from the competition can sometimes help, too. In a separate WDMCon panel, the CTO of an optical-components manufacturer said his Montreal location has been a plus.
"It's an advantage because there are fewer startups in Canada, but there are big companies like JDS and Nortel, and they have people who move," said François Gonthier, chief technical officer of ITF Optical Technologies.
Silicon Access also might be benefiting from big-company attrition, as Carr noted that many early employees came from the rich Ottawa-based ranks of Newbridge Networks and Nortel Networks. ITF's Gonthier admitted, though, that Montreal was a tough sell for many U.S. candidates, "so it's not a perfect world."
Of course, all these companies also benefit from being in optical networking, a market that venture capitalists and investment bankers are screaming to get in on. "It isn't always going to be that way," Pearce said. "Two years from now, optical might not be hot." Right now, though, "we're probably having the easiest time hiring of anybody in the Valley."
So what does a company do when its IPO is done or its sector falls out of favor with Wall Street? The best answer, WDMCon panelists said, is to secure a reputation as a great place to work, a goal that has to be set early.
One simple way is to respect engineers' individuality, said Lee Zipin, vice president of engineering for LuxN Inc. (Sunnyvale, Calif.). "We know we can't push people until they break. It doesn't work," he said.
Then there's the direct approach. Pearce advised giving incentives in the form of cash and stock and said thatthose kinds of rewards are "a key part of the engine that keeps them going."
Meanwhile, the privately held startups keep raking them in. During the week of WDMCon, Silicon Access announced it was stepping up its hiring goals for the Ottawa office, to 60 from 40. And as of last week, vice president of marketing Rex Naden reported that expansion was continuing from there: "We're opening an office in Raleigh as well," he said.