Hiring Techies Is as Tricky as Ever

Although job seekers are everywhere, the top talent is still hard to come by, making creative recruitment a necessity

During the 1990s dot-com boom, hiring tech talent was as painful as getting your gums scraped. Things got so out of hand that English majors acquired the hubris of investment bankers, demanding signing bonuses, six-figure salaries, and stock options.

Three years after the bubble burst, it should be a lot easier to hire techies. With the unemployment rate for computer scientists and electrical engineers at an above-average 6%, plenty of geeks are available for hire. Beyond that, the pool of talent is worldwide, what with U.S. companies tapping into workforces in India and China. Even so, tech recruiters say it still isn't easy to find good help. "It's a constant battle," says Nico Nierenberg, chairman and co-founder of Actuate, a 500-employee software company in San Francisco.

What's going on? For starters, the years of financial stress have made successful people at good companies wary of taking a leap. "Options are vesting, profits are returning, and stocks are up," says Leonard A. Vairo, a top tech recruiter with executive search firm Christian & Timbers. "So why would they leave now?"


  Moreover, even though a lot of people have been laid off, the quality of displaced workers isn't uniformly impressive. "This is going to sound harsh, but a lot of people got employed [in the late '90s] that weren't [that good]," says Nierenberg.

Meanwhile, companies moving work offshore with a vengeance say some other countries are starting to resemble Silicon Valley circa 1999. "Recruiting has become a big challenge in India," says Rosen Sharma, CEO of SolidCore, a software startup based in Palo Alto, Calif., that has a small operation in India. "You're fighting Hewlett-Packard (HPQ ) and Microsoft (MSFT ). To get a half-page ad in the [Indian] classifieds costs $4,000. The San Jose Mercury News doesn't cost me that much."

Still, business must go on. So companies are using a variety of ways -- some new, some old -- to find the best talent. One time-honored tactic is tapping the networks of existing employees. "The most credible indicator of success is someone who worked with that person before," says David Temko, chief technology officer of Laszlo Systems, a software startup based in San Francisco. Temko has hired five former colleagues from Excite@Home.

Top recruiters see the wisdom in that: "Some of the greatest sources of talent are people we've placed," says James J. Buckley, head of search firm Spencer Stuart's North American Technology Practice.


  A lesser-known method is to troll for hidden talent in mediocre companies, which many recruiters say are an underutilized source of good help. "There are some very good people who work at bad companies," says Christian & Timbers' Vairo. "My job is to find the V.P. of engineering who released a successful product."

The biggest change in the talent game, though, is that it's much more global. Of SolidCore's 40 or so employees, 16 are in the U.S., and 15 are in Delhi, India, the city where Sharma grew up. "I have my own network there," says Sharma. "You need that to hire." He also uses eight employees from two offshore providers in India.

Logically enough, a key tool in global recruiting is the Internet, which makes it lot easier to find good people. One favorite community for Silicon Valley recruiters is Craig's List, a popular e-mail list and Web site. "We've had great success hiring through Craig's List," says Lazlo Systems' Temko. "On the technical, side it's very effective."


  A more creative approach may be the one used by TopCoder, a Glastonbury (Conn.) company that creates software coding competitions as a recruiting vehicle. In February, Internet advertising firm DoubleClick (DCLK ) hired TopCoder to run such a contest between students from Columbia University and New York University.

TopCoder rounded up about 100 programmers to participate in this software smackdown, some 10 of whom made it to the final round. DoubleClick Chief Information Officer Mok Choe says the company has already hired a few of the winners. "We can filter out the cream of the crop," says Choe. He adds that the competition "also serves a bigger purpose in terms of maintaining DoubleClick's brand as a technology company."

No matter where or how a company staffs up, execs say their new hires must share attributes that were too often overlooked in the pre-Enron world: Integrity is key. And given the ultracompetitive business environment, financial acumen has never been more valuable. Today's techies "need to be really knowledgeable about processes and best practices," says Sue Unger, chief information officer of DaimlerChrysler (DCX ). "It's a much different role."

By Spencer Ante in New York

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