Recruiters develop new tactics as US demand for programmers hits full boil
A scarcity of technology talent is one of the biggest challenges to American economic growth right now
Ouliana Trofimenko and Annie Rihn, who work for different technology companies on the West Coast, are both on the front lines of one of the biggest challenges to US economic growth right now: a scarcity of technology talent.
Trofimenko, head of technical recruiting at Mapbox, a developer of mapping and navigation software, has 10 people on her team out a total of 339 employees.
Rihn, vice-president of recruiting at Zillow in Seattle, has a staff of 100 for about 3,200 workers at the real-estate website operator.
Those ratios, about one recruiter for about every 30 employees, compare with about one per 100 at many companies.
Both companies treat their recruiting teams as business units because they supply the one thing they can’t be without — software engineers.
"A good software engineer in January was deciding between four different offers," Trofimenko says.
Mapbox, which is helping build navigation systems for driverless cars, hired 134 employees in 2017 and plans to hire 150 this year.
When the American job market heats up, demand for technology talent boils. Nationally, the unemployment rate was 4.1% in January, and analysts project that it will have declined to 4%, the lowest since 2000, in Labor Department figures due out on Friday.
For software developers, the unemployment rate was 1.9% in 2017, down from 4% in 2011.
While companies are writing bigger cheques, they are also adopting new strategies to find engineers for an economy where software is penetrating even mundane processes. Companies are focusing more on training, sourcing new talent through apprenticeships, and looking at atypical pools of candidates who have transferable skills.
"It is probably the most competitive market in the last 20 years that I have been doing this," says Desikan Madhavanur, chief development officer at Scottsdale, Arizona-based JDA Software, whose products help companies manage supply chains. "We have to compete better to get our fair share."
What’s happening in the market for software engineers may help illustrate why one of the tightest American labour markets in decades isn’t leading to broader wage gains. While technology firms are looking at compensation, they are also finding ways to create the supply of workers themselves, which helps hold costs down.
Data tracked by consultancy Gartner shows that during the first half of 2017, 53% of earnings conference calls by the world’s 1,600 largest companies discussed talent in some way, up from 38% in the first half of 2010.
That’s a tipping point showing executives now realise that securing the right people is "the key differentiator for performance", says Brian Kropp, human resources practice leader at Gartner.
The emphasis on talent is happening at the same time the software business is changing. With technology increasingly mobile and connectivity proliferating across devices, software development has shifted more towards teams building smaller applications woven into a bigger whole.
That culture favours a nimbler, more collaborative approach than before.
"The recruiting has changed from looking for experts to looking for athletes," says Madhavanur, who is based in Dallas for JDA, meaning firms now prize people who can flexibly shift from one project to another and work well on a team.
JDA has hired 60 developers in the past two months and will hire another 60 by the end of the second quarter.
The emphasis on collaboration and teamwork, rather than just technical expertise, has also opened up software development to people who come from nontechnical backgrounds who can learn coding, recruiters say. More women are also moving into the field.
About 35% of Mapbox’s total staff is female. The company also benefits because women tend to refer friends into the company at a higher rate than men, Trofimenko says.
Some companies have resorted to growing their own talent. JDA and Social Tables, a Washington-based startup that sells event-management software to hotels, are focusing on pairing up senior engineers with apprentices and interns who can learn and grow with the company.
"We only hire senior engineers and apprentices," says Hunter Powers, the head engineer at Social Tables. Nine of the company’s 33 engineers came out of their three-month apprenticeship programme. Of the 10 engineers the company plans to hire this year, at least four will be homegrown apprentices.
At Zillow, one new initiative is to look inside for people with skills that could transfer to programming. The company started the programme with a couple of employees, and now many are interested. They have to be employed for two years and complete 16 hours of online coding courses before applying, the company says.
"This is good for business and it is good for retention," says Rihn, the recruiter.
The coding world’s new structure of small teams also allows companies to adopt so-called nongeographic models, eschewing the benefits of in-office culture results for a bigger supply of engineers.
While Indeed.com has growing offices in major cities such as Austin, San Francisco, and London, it also hires remote workers, says Raj Mukherjee, senior vice-president of product at the employment search engine. "This allows us to hire talented workers in areas like the Midwest and Canada who do not want to relocate."