Software Engineer Shortage
9:00 am
Fri September 27, 2013

Competition For Tech Talent Heats Up In Seattle Area

Technology companies have been among the bright spots for job growth in the region. They are hiring a lot of one particular kind of employee—software engineers. Those are the people who design, develop and test systems and software.

From 2010 to 2013, the number of people working as software engineers in the Seattle metro area rose 14 percent according to the research firm EMSI. As of last year, a total of 48,725 software engineers were employed in the region.

And there are still thousands more engineering jobs that have yet to be filled. Microsoft and Amazon alone are advertising close to 2,500 open engineering positions.

In addition, a whole host of new companies have recently moved into the Seattle market and are competing for local engineering talent.

“The hiring landscape now reminds me of what it was like in the late 1990s and early 2000s, when technology companies were hiring and Amazon was staffing a juggernaut,” said Robin Andrulevich, who heads up recruiting for Madrona Venture Group, a venture capital company that invests in about 50 local start ups.

According to Andrulevich, it’s common for engineers to get three to five phone calls or emails from headhunters per week. “(It’s) just highly competitive, everybody looking for the top 5 percent of top talent of engineers,” she said.

Credit KUOW/Kara McDermott

How Companies Recruit: Redfin

When you start a job at the Seattle-based company Redfin, you have to go to what they call boot camp.

That’s when all the new employees come together in a big room at the company’s headquarters. They learn everything they need to know about working at the real estate and technology start-up.

Sid Banerjee and Michael Holkesvik listening to Redfin CEO Glenn Kelman. Both just graduated from Yale University, and were recruited by Redfin to work as software engineers.
Credit KUOW Photo/Deborah Wang

Sid Banerjee, an eager-looking, bespectacled young man, sits in the front row. He is 21 years old, and he just graduated from Yale University with a degree in electrical engineering and computer science. This is his first real job, and he admits to “extreme nervousness.”

“I’m that sort of person, it takes me time to settle down,” he said.

Redfin recruited Banerjee while he was still a senior in college.  He came highly recommended by several Redfin engineers whom he had known at Yale.

“And they said, he’s really amazing, you really need to go and meet him,” recounted Bridget Frey, vice president of engineering at Redfin. “And so we flew him out and showed him everything that is great about our company,” Frey said.

Redfin hires a little more than half of its new engineers right out of school. Recruiters start attending college job fairs in the fall.  Redfin CEO Glenn Kelman also gets involved, visiting select campuses to give talks about entrepreneurship.

As the competition for talent increases, companies are finding there's an 'early mover advantage.'

Sometime in November, the company makes its first job offers. According to Frey, that date is getting earlier every year. As the competition for talent increases, companies are finding there’s an “early mover advantage,” she said.

By the time Redfin offered Banerjee a job, two other tech companies were already courting him: Microsoft and Palantir, a Silicon Valley startup.

Banerjee said he was really surprised to get three job offers. He liked the people and the vibe at Redfin, he said, but he had some reservations about taking the job.

So Frey went to work. She had looked at hundreds of resumes, interviewed 10 different candidates, and decided that Banerjee was the one she wanted. “You definitely get a lot of adrenaline from the process,” she said. “You have a lot invested.”

Over the next several weeks, she had multiple conversations with Banerjee, trying to respond to his questions and concerns, his parents’ questions and concerns, and his friends’ questions and concerns; all the while trying to convince Banerjee that Redfin would be a great fit. Eventually, Banerjee accepted the job.

And what was Frey’s reaction? “Woo hoo!” she remembered saying. “It is a matchmaking process, so it’s kind of magical when it all comes together,” she said.

It is a matchmaking process, so it's kind of magical when it all comes together.

Competition Heats Up

Banerjee’s story is not at all unusual. Right now software engineers, even newly minted ones straight out of college, are in high demand. According to the job search website Indeed.com, there are currently more than 4,000 job openings for software engineers in Seattle, Bellevue, and Redmond.

And it’s not just the big local companies, like Amazon, Microsoft and Expedia that are hiring. In the past few years, a whole host of new companies — including Facebook, Google, LinkedIn, Twitter and eBay — have moved into the Seattle area to compete for talent.

Groupon, the daily deals website based in Chicago, opened its office in Seattle’s Pioneer Square last spring. According to Vinayak Hegde, vice president of engineering, the plan was to hire 20 or 30 people by the end of the year. But the company quickly blew past that target. “It’s pretty full, 140 people as of now,” he said.

Outside companies are now discovering what locals have long known: the Seattle area is a great place to find talent.

Hegde was the first person to be hired in the Seattle office. He came over from Amazon, and was given the task of building an engineering team to focus on computational marketing. So he did what people in the tech business do — he reached out to people he had worked with before. For example, the company’s new engineering director, Selvam Velmurugan, is someone Hegde had known at Amazon. Hegde hired Velmurugan after bumping into him on a plane.

Rich Williams, senior vice president of marketing for Groupon, is another Amazon defector. He says outside companies are now discovering what locals have long known: the Seattle area is a great place to find talent.

“You have deep technology roots here. You have an increasingly vibrant start-up and entrepreneurial community, you have a great university system, and a lot of great companies operating here,” Williams said.

Credit KUOW/Kara McDermott

How Do Smaller Companies Compete?

To lure prospective employees, some of the new entrants to the Seattle market are offering an impressive array of perks. Facebook will pay employees $4000 in cash if they have a baby (the company calls it ‘baby cash’). Google boasts a James Beard award-winning chef on staff. Most other companies offer an endless supply of snacks and beverages.

That’s somewhat disconcerting to the smaller companies that are competing with the bigger firms for talent.  

“They have much better pay packages; they also have better kitchens, and they will do your dry cleaning, and they will walk your dog for you, and we don’t have resources to do all those things right now,” said Steve Shivers, CEO of doxo, a tech startup that employs 30 people in Seattle’s Pioneer Square.

In some cases, big companies can offer pay packages that are 30-40 percent more than what startups can offer, according to Shivers.

But in the long term, he said, small companies like doxo actually benefit from having more competition in the tech marketplace.

“What’s great about having the big tech companies here is they attract a lot of talent to the area. And then there’s a lot of folks that are just like, boy, I am bored out of my mind,” Shivers said.

About two-thirds of doxo’s engineers came to the company from big tech companies, lured by the prospect of working on what Shivers calls the “big juicy projects” that have an immediate impact on the business. 

Redfin makes the same pitch, and also talks about its friendly and collaborative environment, its small teams working on a very big website and its great training opportunities.

“We have to make sure we tell our story,” said Redfin’s Frey.

And if that’s not enough, Frey said, Redfin has one other thing going for it. Most engineering jobs come with stock options, and the buzz in the industry is that Redfin might be preparing for an initial public stock offering.

“That’s very exciting to candidates, that we’re a late stage startup, that we are growing so fast and that there’s really a huge opportunity,” Frey said. “It’s definitely something we talk about when we talk to candidates.”

This story is part of The Big Reset, KUOW’s series that explores how the Puget Sound Region has emerged from the Great Recession.