Monday, February 4, 2008

Big Mergers and Escalating Salaries

The scramble for controlling Yahoo is on. Google is entering the fray and trying to change the frame of the discussion while alternately offering a different path for Yahoo. Microsoft has made a bold play and the company shows it still knows how to shake things up.

But the side story that I am interested in is how this reflects on the current market for software developers and computer scientists.

The New York Times sees it as a difficulty for the Microsoft/Yahoo combined force, suggesting that it is not an exciting proposition for developers seeking opportunities to innovate and advance. The speak of long lines at a Silicon Valley employee recruitment fair in front of Google and Facebook, while students looked but didn’t linger and the Microsoft and Yahoo booths. They suggest that does not bode well for the easy hiring of Microsoftiehoos, as the hiring pool is once again shallow.

The competition for engineering talent in Silicon Valley and other redoubts of technology is as fierce as its been since the late 1990s, if not fiercer, some in the Valley say.

The battle for tech supremacy, then, is largely a battle for talent. And so one crucial question about Microsoft’s $44.6 billion bid for Yahoo is whether a combined company could more easily attract software engineers — an increasingly precious commodity. Both companies are already fighting the perception that their most innovative days are behind them.

I'm not sure MSFT's employees would agree with that.

A few days prior to that article, TechCrunch spoke of the battle between Google and Facebook for new graduate hires. They talk of escalating salaries matched only by the run up in the 90’s.

Last year, salaries of up to $70,000 were common for the best students. This year, Facebook is said to be offering $92,000, and Google has increased some offers to $95,000 to get their share of graduates. Students with a Masters degree in Computer Science are being offered as much as $130,000 for associate product manager jobs at Google.

Having to deal with hiring employees during that period I have doubts to the exactness of that comparison as well as hopes that my doubts are correct. It was crazy and dangerous to have salaries soar the way they did.

It isn’t just the cost of the new hire that has an effect on the company. It is the bringing into alignment the other salaries of those already employed that starts to hurt. Not to mention that employees in positions outside of software development and information technology start to wonder how these younger and less business experienced people are making two and three times what they are.

Don’t get me wrong. I believe that newly hired CS and CE students and employees should be making good money, and they are. I am just hopeful that we don’t escalate too quickly and out of control.

The good news is for the students at the Institute of Technology here at the University of Washington, Tacoma enrolled in those aforementioned programs. There are currently 252 enrolled in the undergraduate and graduate programs on this campus and there appears to be no shortage of internships and job opportunities for them at graduation. That goes beyond Google, Facebook, Microsoft and Yahoo. We’ve got the Silicon Forest up north, and there are plenty of companies and opportunities in the South Puget Sound as well.

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