Are your top executives “Locked In”?

According to a new article in Bloomberg BusinessWeek, there is a huge amount of “poaching” going on in the world of start-up technology companies. With so many start-up companies creating new revenue, job opportunities, and a even a higher return on investment for its employees, competition is fierce when it comes to recruiting. In the article “In Tech, Poaching Is the Sincerest Form of Flattery” by Bloomberg Business week, it talks about companies poaching or “stealing” employees, specifically executives, from other organizations to work for them.

Zynga, a popular social gaming company, talked about how they plotted to recruit Neil Roseman, an engineer who had led Amazon.com’s launch of its digital music business and development of the Kindle e-book readers software.  Instead of outsourcing by hiring a search consultant, they used their employee who was a former Amazon manager that had worked under Roseman to make first contact. Soon after, Zynga CEO Mark Pincus invited him to his office to further discuss the Vice President position. Roseman liked the idea that he was able to realize the future of the company.

But Zynga is not the only company that is poaching. As economy rebounds, tech companies are battling over engineers, designers, computer scientists, and executives who can stay ahead of rapid change in the industry. Especially the talent among social media and other Internet companies as well as computer systems manufacturers. Facebooks expansion “has outpaced our head count growth” says Lori Goler, the companies Vice President of people. “Were hiring to keep pace.” Daniel Pink, who was the keynote speaker at SHRM, talked about how Facebook hires their engineers and have them go through a training process, and at the end of their training, they are asked to choose which department they would like to work in. That just shows how Facebook hires and engages with their new employees to contribute in outpacing their growth.

Juniper Networks has snatched three executives from Cisco Systems in the last year. In January, Google rebuffed Twitters bid to hire Sundar Pichai, a star product development vice president by making a substantial counteroffer. Jeff Sanders, vice-chairman of search firm Heidrick & Struggles says, “you are seeing them do equity grants not during standard cycles. They are really taking a look at the top 10 percent of performers and asking themselves, ‘are they locked in?’” The executives at larger tech companies who jump to startup, typically take a 20 percent to 40 percent cut in their base salary in the hope of securing a big pay day later, says Jeff Stump, a former executive recruiter who now tracks talent for venture capital firm Andreessen Horowitz.

Alice Hill, managing director of Dice.com, a technology job-posting site says “companies like Google, Yahoo!, Microsoft, and Amazon that have put a lot of money and time into recruiting and training are the most vulnerable. Their great sources of proven talent for startups to plug into.” Danielle Deibler left her job at Adobe Systems, where shed been an engineering product manager for four years. She was intrigued when a friend told her about a vice president-level position at a 14 person gaming startup, casual collective. What was important to her was that she has more to say about the organizations future.

Another tool that Zynga uses is a software to match prospective hires with current employees who have worked with candidates previously, attended the same college, or share a similar interest such as skiing. It then asks the employees to place an initial call to the target and talk about Zynga. Rapid growth of social media, mobile technology, and e-commerce has fueled a run on employees with expertise in those fields. Increased numbers of startups are in hiring-mode. Established tech companies such as Oracle, Hewlett-Packard, and Cisco are diversifying into one another’s businesses-and stealing talent to speed the transition. It seems to me that while well known companies are spending thousands of dollars to attract the right talent, these start up companies save time and money by sending their own people to poach all of the effort it took for the companies to hire their top candidates. I mean, who wouldn’t want to take part of a start up company that shows great potential in the near future…technology evolves rapidly.

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