Silicon Valley Rebound Pressures Tech Hiring

From the Wall Street Journal | May 24, 2010 by JOE
LIGHT And NIRAJ
SHETH

The pickup in tech hiring is spreading
beyond Silicon Valley, forcing companies outside the big tech center to
rethink their recruiting tactics.

SailPoint

SailPoint
Technologies says it is looking to add 20 employees.

Companies
in second-tier tech locations such as Austin, Texas, and Raleigh, N.C.,
had an easier time recruiting talented employees during the slump. But
now that Silicon Valley firms have started aggressively hiring, and the
general economy is improving, competition is stiffening.

"We've
always had a bit of a competition for talent with Silicon Valley," says
Julie Huls, president of the Austin Technology Council, a trade group of
Austin-area technology executives. "As firms over there start to
recover, we have to make sure we stay in the game."

Convio Inc., a 370-employee
Austin-based maker of fundraising software, continued adding employees
during the recession, hiring about 35 people last year. "We were able to
recruit incredible people that we couldn't have gotten before the
recession," says Angie McDermott, vice president of human resources.

That
has gotten harder this year. Convio is planning to increase hiring and
is looking for six engineers now. Employee referrals are a big source of
new hires, so earlier this year, the firm started a program where
employees can easily send Convio job openings to connections on their
Facebook, LinkedIn and Twitter accounts. On Facebook, employees can
install an application that lists a company's job openings.

Convio
also hired more interns, going from two last year to six now, hoping to
snag college students before its rivals. It's "a chance to sell our
culture and get great engineers even before they enter the full-time job
market," says Ms. McDermott.

SailPoint Technologies Inc., an
Austin-based maker of security software for industries including banking
and insurance, says many recruits are more discriminating now. This
year, the firm is looking to hire about 20 people, about double last
year.

"The days of 'I'll take what I can get' are over," says Mark
McClain, the 60-employee company's chief executive. SailPoint mostly
competes against other startups, some of which are in Silicon Valley.
Candidates he recruits now often have at least one offer in hand,
sometimes two, he says. Mr. McClain says he hasn't had to start offering
perks such as increased signing bonuses, but anticipates that he will.
For now, he is emphasizing Austin's short commute times, cheap real
estate and quality of life to potential employees.

"As hiring
improves in the Valley, I'd expect that we might have to start looking
at bonuses, salaries, or options again as ways to attract people," he
says. "We feel some of that tightness coming back."

In Raleigh,
N.C., Red Hat Inc. has also seen
greater competition in recent months. In March, the maker of open-source
software started retraining hiring managers as the firm looks to add
800 employees to its 3,200-person work force this year.

Previously,
Red Hat's recruiting pitch focused on pay, benefits and the product a
developer would work on. But as Red Hat executives watched their Silicon
Valley rivals rebound, they didn't want to have to compete against them
on pay and benefits. "We realized the competition would pick up," says
DeLisa Alexander, who heads human resources and brand marketing.

Instead,
Red Hat made its pitch more personal. Hiring managers now are trained
to talk about their career histories, emphasizing the variety of
projects they work on and ideas they have been able to execute. The idea
is to portray Red Hat as a more entrepreneurial place to build a career
than its rivals in California. So far, the company has retrained 50 of
its 437 hiring managers, and the firm says the effort is helping to land
hires.

The pitch worked for Ashesh Badani, a 37-year-old
high-tech manager for new software whom Red Hat hired two months ago,
relocating to a Waltham, Mass., office. He had worked in Silicon Valley
for nine years, most recently at Sun Microsystems Inc.

He was
reluctant to move but says he was swayed by the stories Red Hat
employees-including his now boss-told him about having more autonomy.

Sprint Nextel Corp., the
Kansas City, Mo., wireless carrier, is shifting tactics to make sure it
keeps employees as it increases hiring. Human-resource executives are
advising hiring managers to make more aggressive use of social media
sites like LinkedIn and Facebook to find candidates with Midwest roots,
rather than compete against California for employees who would really
rather be in Silicon Valley.

"We're looking for someone who's not
looking to make a lifestyle change but to come home," says Ron Gair,
Sprint's human-res ources chief.

Write to
Joe Light at joe.light@wsj.com
and Niraj Shethat niraj.sheth@wsj.com