A scramble for talent among the latest wave of internet start-ups is boosting the pay of junior staff and forcing employers to entice star workers with perks reminiscent of the last dotcom boom.
The cash flooding into new ventures is shifting the focus of Silicon Valley’s long-running talent war from the top-level executives fought over by Google and Apple to low-ranking engineers just out of college. More than four-fifths of start-ups plan to hire this year, according to a report by Silicon Valley Bank.
“We’re seeing base salary inflation at a pretty significant rate,” said Jim Counihan, an investor with Prism VentureWorks, a company that works with Silicon Valley start-ups. “Two years ago, you could get an engineer from a good school with two to four years of experience with an $80,000 base and a $15,000 bonus. That’s gone up 25 to 30 per cent, at least, in some cases 50 per cent.”
The battle for workers has also led employers to think up new strategies to poach staff from more established companies.
A particular cycle is developing around star engineers’ four-year anniversaries at companies, a time when most Silicon Valley equity plans vest.
The soaring demand has companies looking at younger and younger candidates, and recent college graduates are commanding handsome compensation packages.