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It’s been my experience that the quantity of tech jobs tends to cycle between feast and famine. We seem to be entering a feast period where the number of jobs exceeds the number of candidates. Couple that with the fact that our economic system seems to balance wages to match the job demand and you have the makings of a perfect storm.

I’ve been eating out more lately for lunch and that’s not because I enjoy eating out, it’s because there have been so many farewell lunches. Tech workers in the trenches are the first to move because they are just starting their careers and they are the most attractive to employers. Let’s call this stage 1. Their skills are fresh and they have enough experience to contribute from day one. They tend to be the people that get forgotten when times are lean so employer’s don’t have to offer large increases to get them to jump.

When that well runs dry or when you need experience to guide the team, employers move up the food chain to attract people with more experience. Let’s call this stage 2. If employers don’t have their people locked in through stock options or competitive salaries and bonuses, the shell game continues.

I was speaking to a tech company CEO last weekend and he said that with the exception of the new grads that should be available in a few weeks, Stage 2 is already happening.

So what can you do to protect yourself from high employee turnover? Well some of the things that we talked about already, stock options, competitive salaries, bonuses, better work environments, more vacation, flexible work hours and locations, etc.

Tech workers are not your typical employees. They tend to be less motivated by cold hard cash and more motivated by work environment, interesting things to work on, career development, travel and the list goes on. Compensation does play a role, but t0 increase the output of your team, you have to do more.

There will be cases where it’s time to move on in order to advance a career and there is not much that an employer can do about that other than to say thank you for your service and all the best in your future endeavours.

I did come across a good book a couple of months back that I blogged about already though. Check out “The Alliance” by one of the founders of LinkedIn, Reid Hoffman. Reid suggests that what worked at LinkedIn was to treat every employee as a contract worker in that they have something to offer the company and the company has something to offer them. He calls these fixed periods “tours of duty”. It allows the employee and employer to have a clear understanding of what is expected and the fixed term bounds everything.

Many employees sign up for back-to-back tours of duty, but others do their tour and move on. If an employer wants to retain a key employee, they are motived to offer that person something that will help them achieve their life goals. I was fascinated as I read because I would love to work in a place like that.

In any case, the tech industry is entering a shake down period, so if you don’t want to suffer from  (brain drain and retrain), it’s time to make a change.

One could say that I’ve been around the block when it comes to tech companies and start-ups, so a question that I get quite often from investors is “Is this a good investment?”

It’s not a really easy question to answer, but there are some indicators that you can use to weigh your decision. This is by no means a complete list, but it might be a good check list to determine whether further investigation is justified.

1. Is the technology solid? By this I mean can the engineering team build what they are being asked to build.
2. Are the people good? This is a more complex question because there are a number of teams inside any start-up. The engineering team needs to be evaluated separately from the leadership team. It’s really important that the leadership team understands the technology as well as the opportunity and this is not always the case. It’s been my experience that if egos are going to be a problem, you will find them in the management team.
3. Is the timing right? Is the market ready for the new innovation that is being designed? Technology people see the application for innovation years before the buying public and many really good companies fail because they’re ready too soon.
4. Do you have a channel to market? There are so many options today that didn’t exist in say the 80’s and 90’s. It’s really important that the marketing team has a grasp on how  things like eBay, shopify, google add-words and other innovations have re-shaped the industry. If the marketing team talks about things like trade shows and industry analysis, run away!
5. Is the work environment innovative? Start-ups require long hours so there has to be a good work environment. Do the employees mix socially and do they include family and friends. Start-ups require buy in from both the employees and their support networks.
6. Are the employee’s share holders? Being a share holder means that employees are owners. People always work harder on their own projects or when the outcome will effect their own pocket book.
7. How old is the startup? If the start-up does not realize some success in the first few years of operation, the employees will burn out. The advantages like shares lose their sparkle and there may not be enough momentum left for a pivot.

I could go on for pages but rather than do that, I suggest that you read “The start-up owners manual” for more insight into what makes a successful start-up.

For me, it comes down to technology and people. If those two things work, the rest will happen on it’s own. The people part is the hardest to get right.

There’s a song by Three Doors Down that refers to the singers life as containing things that are real and make believe. The Singer is struggling to tell the difference between the two. I suspect that everyone has moments like that in their life, but that’s a little too personal for a BLOG like this. In this case I would like to reflect on how this concept has played out over the years in the tech community.

Tech companies have always had to play a game where they need to keep investors engaged long enough to buy the time they need to build the product. Investors have become increasingly impatient and I blame the culture that has evolved from the Internet for that. In the 80’s I often found myself being asked to demo a product at a point where it was barely booting, while I listened to the sales person talk about how it was ready to ship.

At the time I didn’t understand the pressures that promote this kind of behaviour. Those pressures have not gone away, in fact they have gotten much worse. I have had people ask me what happened to the tech community in Ottawa. They reminisce about the tech boom of the 80s and 90s and question why that sort of thing is not still happening. They blame off shore investment and have a laundry list of others to blame.

If there is to be any blame, it should be focused on the investment community. If you want to build a product that is going to be innovative and produce a long term ROI, it is going to take Research as well as Development. The investment community seems to want to put money into development and avoid research. You can’t have it both ways. Some products need more than two years to develop and I would suggest to you that those products will produce the best returns.

So what do tech companies do when they can’t get funded to build those products? They sell their ideas to off shore companies that have investors that are willing to wait or they build a product that is Make Believe while they work furiously on the product that is real.

Is that not misleading the investors? Yup, but there are many new laws to guard against this kind of misdirection. Companies have to walk a much finer line.

So what is the answer then?

I believe that setting expectations up front with investors would be a good start but the real change has to happen in the investment community itself.

Why were companies like Nortel able to innovate for so many years?

Because they were considered a Blue Chip stock and people made long term investments. Nortel had an awesome track record, was honest with their investors and hired only the top graduates. But they failed in a messy cloud of controversy you say. To that I would reply, read the book 100 days.

It would be nice to not have to “Make Believe” and just stick with what’s “Real”. In order for that to happen though, investors are going to have to put in the time to find out what their investments are doing and accept some risk.

What is a reasonable amount of risk and how can I tell real from make believe? Excellent question and the topic of a future post.

So what does it mean to retire?

People have been asking me about retirement for years and my response has always been that I retired in 1981 when I graduated. I actually had a manager at Mitel in the 80’s tell me that I wasn’t serious about my job because I was having too much fun. Is that not the ultimate goal for every employee?

I really wouldn’t know how to or want to count the number of extra hours that I have logged working on both home and work projects. Why do I do that? because I love what I do and there are so many more fun things to do every day.

Has my attitude about retirement changed?

Well I’m closing in on the big six-oh and I can see the attraction of being able to choose what I work on each day. I have several friends that have retired and a couple are working harder in retirement than they every worked when they were employed.  I guess I could see me doing that and taking a little more time to vacation with my wife. I actually bought an extra week this year to travel.

Why has my attitude about retirement changed?

I would suggest to you that working conditions in the tech industry have deteriorated over the last 20 years. I still have fun on my personal projects and I apply all of that learning in my day job, but the environment at work doesn’t have the shiny new sparkle that it did in the 80’s.

Is it time for a shift in employer’s attitudes?

If the predicted tech worker shortage is realized, I would suggest to employers that there are people with a lot of experience that would be attracted to a flexible work environment. What would that environment ideally look like? That would be a topic for another day [grin]

Stay tuned….