Silicon Valley Trends: Is HR Staring Down a Dot-com Boom 2.0?
For experienced HR leaders, the dot-com boom of the late 90s can seem like a distant blur. And by many accounts, it was. Silicon Valley trends and demand for skilled tech workers resulted in an HR "heyday," fueled by the sudden and fierce competition for talent. Harvard Business Review writes that HR experienced a veritable "resurgence," as skilled corporate recruiters were some of the most sought-after talent for major firms.
Is This Dot-Com Boom 2.0?
There are some core similarities between Silicon Valley trends today and those from the 90s. Market Watch cites parallels between the market's recent health, "exploding" start-ups and the large swath of talent heading to California in search of opportunities. Today's growth, however, is fueled by the cloud, mobile and sensor technologies, instead of the software- and internet-centric Silicon Valley of old. An Inc. article draws an even clearer differentiation, pointing out that realistic valuations, reasonable VC funding, longer time to IPO and stability in the tech sector are signs that this tech bubble is different and may not actually burst.
The current state of HR when compared to those days of yore produce some clear parallels and common challenges, but also some elements that are unique to each era.
Hiring Was and Is Brutal
In Silicon Valley and nationwide, HR leaders can agree on one thing: Hiring tech talent is brutal. According to the Boston Globe, it's actually worse than it was during the dot-com boom. In fact, its "ridiculously hard when compared with other parts of the world," according to Tech Target.
But the rise of mobile technology has now enabled Silicon Valley HR pros to source their talent from a global pool. Experts at IDC predict that, by 2020, the mobile worker population will account for over 72 percent of the U.S. workforce. So unlike the first dot-com era, which would have required a cavalcade of visas and difficult hoops to jump through to reach international talent, HR leaders can now have those talented workers contribute to your organization from wherever they are.
While it's no silver bullet for a region where full employment is a stone's throw away, it has certainly opened up a lot more opportunities that just weren't possible 20 years ago.
Wage Growth Is Slower
Wage growth has slowly increased nationwide in recent months. High-tech professionals in Silicon Valley are among the highest-paid in the nation, according to the Fiscal Times. However, the wage competition Silicon Valley and tech organizations face today isn't nearly as bad as it was in the 1990s. Pew Research has found that since 2000, individuals earning in the top 10 percent of salaries nationwide have experienced just a 9.6 percent increase in real wages.
Some experts say slow wage growth in tech can be attributed to rising health care costs for employers, while other analysts blame it on an influx of job holders with H1-B visas, according to the HuffPost Business. While it's clear the cost of competition in Silicon Valley today isn't nearly as high as it was 20 years ago, the Economist explains that the factors behind slow wage growth go far beyond Silicon Valley or the tech industry.
Employer Branding Has Become Everything
Silicon Valley has a longstanding relationship with the concept of employee perks, or non-financial benefits to lure and retain talent. However, HRE Online reports that Pinterest's Michael DeAngelo is a believer that Silicon Valley firms have gotten smarter about how they direct their employer branding budgets today, compared to the dot-com boom. He explains that in the 1990s, brands frequently invested in high-cost advertising campaigns, free snacks, laser tag and other strategies designed to recruit.
But today, Silicon Valley budgets are more focused on efforts to retain workers with near-endless opportunities. Organizations still offer unusual perks, from haircuts to concierge service, but those benefits are influenced more and more by savvy employees who want benefits that add real value to their lives, such as flexible working arrangements, casual dress codes or on-site child care.
Talented HR leadership was the real star of Silicon Valley firms in the 1990s, and that trend hasn't changed today. Much like in the dot-com boom, the competition to attract, retain and compensate talent remains extremely high. But unlike 20 years ago, HR leaders are armed with the technology to accommodate a global talent pool and the data to support HCM initiatives that enrich their employees' lives both at the office and at home. Helping to ensure their organization's success bubble keeps growing, instead of waiting for it to suddenly burst.