The Talent War Among Startups

Startups are finding it increasingly difficult to hire qualified technical people. This can be attributed to the following:

  1. High demand for talent 

There are more startups sprouting up all across the country, even as the US trudges the long, slow road to recovery from the most recent recession. This means that there is a high demand for the same kind of talent needed by these startups.

In How to Find a Developer in Chicago, Allison Sheedy, Dan Ptak, Jon Nacewicz and Seth Kravitz state:

“So you’re looking for talented developers, huh? Well you better grab a number and get in line because you’re one of literally hundreds of people hunting for them as well right now.”

As Alex Wilhelm, in Chicago’s Great Web Developer Drought, reveals:

“Another source for this story said that they did not know of any developer in the city with even an inch of skill that was unemployed.”

  1. Lack of qualified talent 

Aggravating the situation is the lack of qualified talent brought about by the lack of investment in science, technology, engineering and mathematics (STEM) courses. This means that the number of STEM graduates remain low and could not meet the high demand for these types of workers. We discussed the reasons behind this phenomenon in a recent article entitled The Worsening Structural Unemployment: When Will It End?

  1. Competition from cash-rich companies such as Google, Facebook, and Groupon, etc. 

Today’s Internet superstars are attracting top talent, including recent graduates, with higher pay, and edging out startups in the process.

The previously quoted Sheedy et. al. advises startups that:

“there is certainly no shortage of opportunity for great developers, so unless you have Groupon-sized pile of cash, you’re going to have to be smart and creative about your search.”

Adds Om Malik, in Silicon Valley and the Talent Crunch:

“You can thank four companies for that: Facebook, Twitter, Zynga and Google. These four companies are sucking up all kinds of talent: designers, engineers, marketing people and infrastructure folks. They’re able to do so by offering them above-market salaries, insane perks, food and a cachet that’s nice to have during dinner conversations.”

  1. Our startup culture 

Ironically, our so-called ‘startup culture’ also plays a significant role in the lack of talent for hire. As Alex Wilhelm says in his previously-cited article:

“Think back to when I told you that Chicago is currently enjoying an elevated amount of startup activity. This adds to the problem, as developers themselves are starting companies, thus removing themselves from the pool of available people.”

Adds Wilhelm:

“Startup success leads to more people jumping on the founding bus, siphoning coding talent even further from the market.”.

  1. Restrictive immigration process 

One way to alleviate the two above-mentioned problems is to allow immigrants with the right kind of skills into the United States. However, this is not possible with our current restrictive immigration policies. Aggravating the problem is the fact that foreign students who train in the US who experienced the restrictive climate imposed by our uninformed or misinformed immigration policies is going back to their countries to work, instead of putting their talents in use among US startups.

In Why America Needs Immigrants, Jonah Lehrer convincingly argues:

“Why is immigration so essential for innovation? Immigrants bring a much-needed set of skills and interests. Last year, foreign students studying on temporary visas received more than 60% of all U.S. engineering doctorates (American students, by contrast, dominate doctorate programs in the humanities and social sciences).”

A New York Times editorial piece entitled Do We Need Foreign Technology Workers argues:

“The debates about H-1B visas and legislation restricting firms getting federal bailouts from hiring foreign students are badly out of touch with the new global reality. The U.S. is no longer the only land of opportunity. Highly skilled foreign-born workers are leaving the country in droves.”

The editorial goes on to say:

“…because of shortsighted immigration policies, we increased the numbers of temporary H-1B visas over the years, but not permanent resident visas. So we have about 500,000 engineers, scientists, doctors and other professionals working for American companies who are stuck in “immigration limbo.”

Echoing the previous article, Vivek Wadhwa, in We Need to Stop America’s Brain Drain, says:

“We should provide permanent resident visas to skilled immigrants who graduate from the nation’s top research universities and top universities’ science, technology, engineering and mathematics (STEM) programs.”

He then goes on to say that:

“we should also make green-card acquisition dependent on skilled immigrants’ founding companies that create jobs for Americans.”

So, what should we do to solve the problems above? The articles below offer great insights on how to compete for talent and keep them:

1. How To Find A Developer In Chicago

2. Trouble Hiring? Create a Cult

3.  East Coast Companies Need To Win At Home In Talent War

4. How To Find, Hire And Keep Technical Top Talent

5. Effectively Managing Multigenerational Workforce

6. A Winning strategy In The War For Talent

Take time to read the above articles to find out how we can help solve the talent war and jumpstart innovation among our startups.


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