Silicon Valley Rebound Pressures Tech Hiring

Companies From Texas to Missouri Rethink Tactics to Attract Talent as Competition Grows; Employing the Personal Pitch

From the Wall Street Journal online


The pickup in tech hiring is spreading beyond Silicon Valley, forcing companies outside the big tech center to rethink their recruiting tactics.

Companies in second-tier tech locations such as Austin, Texas, and Raleigh, N.C., had an easier time recruiting talented employees during the slump. But now that Silicon Valley firms have started aggressively hiring, and the general economy is improving, competition is stiffening.

"We've always had a bit of a competition for talent with Silicon Valley," says Julie Huls, president of the Austin Technology Council, a trade group of Austin-area technology executives. "As firms over there start to recover, we have to make sure we stay in the game."

Convio Inc., a 370-employee Austin-based maker of fundraising software, continued adding employees during the recession, hiring about 35 people last year. "We were able to recruit incredible people that we couldn't have gotten before the recession," says Angie McDermott, vice president of human resources.

That has gotten harder this year. Convio is planning to increase hiring and is looking for six engineers now. Employee referrals are a big source of new hires, so earlier this year, the firm started a program where employees can easily send Convio job openings to connections on their Facebook, LinkedIn and Twitter accounts. On Facebook, employees can install an application that lists a company's job openings.

Convio also hired more interns, going from two last year to six now, hoping to snag college students before its rivals. It's "a chance to sell our culture and get great engineers even before they enter the full-time job market," says Ms. McDermott.

SailPoint Technologies Inc., an Austin-based maker of security software for industries including banking and insurance, says many recruits are more discriminating now. This year, the firm is looking to hire about 20 people, about double last year.

"The days of 'I'll take what I can get' are over," says Mark McClain, the 60-employee company's chief executive. SailPoint mostly competes against other startups, some of which are in Silicon Valley. Candidates he recruits now often have at least one offer in hand, sometimes two, he says. Mr. McClain says he hasn't had to start offering perks such as increased signing bonuses, but anticipates that he will. For now, he is emphasizing Austin's short commute times, cheap real estate and quality of life to potential employees.

"As hiring improves in the Valley, I'd expect that we might have to start looking at bonuses, salaries, or options again as ways to attract people," he says. "We feel some of that tightness coming back."

In Raleigh, N.C., Red Hat Inc. has also seen greater competition in recent months. In March, the maker of open-source software started retraining hiring managers as the firm looks to add 800 employees to its 3,200-person work force this year.

Previously, Red Hat's recruiting pitch focused on pay, benefits and the product a developer would work on. But as Red Hat executives watched their Silicon Valley rivals rebound, they didn't want to have to compete against them on pay and benefits. "We realized the competition would pick up," says DeLisa Alexander, who heads human resources and brand marketing.

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Instead, Red Hat made its pitch more personal. Hiring managers now are trained to talk about their career histories, emphasizing the variety of projects they work on and ideas they have been able to execute. The idea is to portray Red Hat as a more entrepreneurial place to build a career than its rivals in California. So far, the company has retrained 50 of its 437 hiring managers, and the firm says the effort is helping to land hires.

The pitch worked for Ashesh Badani, a 37-year-old high-tech manager for new software whom Red Hat hired two months ago, relocating to a Waltham, Mass., office. He had worked in Silicon Valley for nine years, most recently at Sun Microsystems Inc.

He was reluctant to move but says he was swayed by the stories Red Hat employees—including his now boss—told him about having more autonomy.

Sprint Nextel Corp., the Kansas City, Mo., wireless carrier, is shifting tactics to make sure it keeps employees as it increases hiring. Human-resource executives are advising hiring managers to make more aggressive use of social media sites like LinkedIn and Facebook to find candidates with Midwest roots, rather than compete against California for employees who would really rather be in Silicon Valley.

"We're looking for someone who's not looking to make a lifestyle change but to come home," says Ron Gair, Sprint's human-res ources chief.

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