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Boomtown Redux: Job Market Heats Up in Silicon Valley

By Pui-Wing Tam
 

Four months ago, Jamie Odell packed two suitcases and left behind his wife and three kids in Potomac Falls, Va. Narayan Raja loaded up a truck with his belongings last year and left Warwick, R.I. Marty Boos sold his 3,700-square-foot home in Eden Prairie, Minn., to make a new start.

All three had the same destination: Silicon Valley. After suffering an exodus during the dot-com bust, the region is once again a land of opportunity.

Mr. Odell was lured by stock options and a bigger title at a start-up company called Sling Media Inc. "I know it's a risk," says the 40-year-old marketer, "but this area is the hot space to be in now." His new employer sells a box that relays programming from a living-room television set to any computer with high-speed Internet service.

The nation's technology capital lost 185,000 jobs, or one in five, between 2001 and 2005. This year, state economists expect a net inflow of people into the area for the first time in six years.
 
Just as noteworthy as the comeback is the source of all the new jobs. For the most part, it isn't giants such as Cisco Systems Inc., Sun Microsystems Inc. and Intel Corp. They're adjusting to slower growth rates and in some cases continuing to shed workers. The biggest demand comes from thousands of small and midsize companies and start-ups such as Sling Media, suggesting that Silicon Valley's entrepreneurial ferment survived the bust just fine. Companies are typically looking for experienced workers who are well-versed in hot technologies.

"We're trying to hire a lot, all at once," says Rick Osterloh, vice president of marketing at Good Technology Inc. "But there's an inventory issue. There's just not a lot of people available here." The Santa Clara company, which specializes in wireless-email software, hired Mr. Boos, the former Minnesotan, as its chief information officer. Head count has more than doubled to 450 people in the past two years.

Dice.com, a technology-jobs Web site, listed 89,476 open tech jobs nationwide as of late June, up from 24,671 in 2003. Companies usually aren't looking for basic programmers or assembly-line workers. Most moved that work out of the region years ago, often to places like India. More often, they seek skilled workers who can create and market innovative products.

"People keep saying Silicon Valley is dead, and it's never true," says Sean Randolph, president of the Bay Area Economic Forum, a San Francisco-based group that studies the region's economy. "There's an immense infrastructure for research and development here," he says, that helps push Silicon Valley continually up the skills curve.

One of its big draws is money. Average annual pay for the region's tech workers rose to $70,000 last year from around $64,000 in 2003, according to Joint Venture Silicon Valley, a nonprofit business group. Executive positions typically command six-figure packages. While stock options have come under fire amid cases of improper dating of grants, many tech companies, especially start-ups, are still doling them out heavily. That offers employees the chance to cash in big if their company goes public and its stock price rises.

Mr. Boos, 43 years old, seemed like an unlikely candidate to leave Minnesota. He was making six figures as chief information officer of a Minneapolis company, Digital River Inc., and owned a four-bedroom home on a golf course. In 1999, he told USA Today he never wanted to move. "I've had numerous offers outside the Minneapolis area, but the cost of housing in [Silicon] Valley is outrageous," the newspaper quoted him as saying.

But in February 2005, fed up with Minnesota winters, Mr. Boos called two recruiters. He told them he wanted a job at a California start-up that was heading toward an initial public offering, which would offer him a chance to get rich. Mr. Boos quickly landed an interview with Good Technology, a fast-growing company that competes with BlackBerry maker Research in Motion Ltd.

By April 2005, Mr. Boos was close to an offer from Good Technology. At the same time, he was in discussions for the job of chief information officer at Los Angeles-based MySpace, a social-networking Web site aimed at teenagers that has since been acquired by News Corp. With the competing offer looming, Mr. Boos, asked for -- and got -- a sizable chunk of stock options in Good Technology. He also received a salary matching that of his previous job. (He declined to reveal numbers.)

Mr. Boos paid nearly $1.4 million for a Silicon Valley home, according to public records, three times what he got for his Minnesota home last year. His wife, Rhonda, who had worked for Sun Microsystems in Minnesota for 17 years, transferred to Sun's Silicon Valley headquarters from Minneapolis and received a 15% increase in total compensation.

"I came here for the future equity," says Mr. Boos. "The ante to get into this game is very high, but so is the potential return."

Many of the new migrants have highly specialized skills. Mr. Raja moved from Rhode Island to chip maker Linear Technology Corp. in Milpitas, Calif., as a design engineer. The native of India holds an electrical-engineering degree from Lehigh University in Bethlehem, Pa., and worked for nine years at a chip company in East Greenwich, R.I., specializing in analog chips that regulate power consumption.

As a design engineer of such chips, which are used in devices like digital music players and digital cameras, Mr. Raja is responsible for creating the tiny integrated circuits from concept through finished product. Because of the complexity of these chips, which can also be used to manage voltage and sense temperature, their design is sometimes described as a "black art."

In March 2005, Mr. Raja decided to take his skills to California and got in touch with a recruiter. "There seemed to be more opportunities in Silicon Valley," the 33-year-old says. His fiancée, now his wife, also liked the idea of moving to California.

Mr. Raja quickly landed a job interview with Linear, one of the bigger and more profitable analog-chip companies. Tick Houk, a Linear engineer who spotted Mr. Raja's résumé, says that while there were no open positions, it was clear Mr. Raja was a strong candidate. "Executives always ask us if we can find people locally, but we have to look all over all the time," says Mr. Houk. "Senior managers are hard to come by."

Linear has been on a hiring binge of late. The company plans to increase its head count by roughly 15% this fiscal year from around 3,700 employees currently. The fastest growth in hiring has been in engineering and design, rather than in chip manufacturing.

Within 24 hours of the interview, Mr. Raja got an oral offer from Linear, which created a position for him. He moved to San Jose a month later. His total compensation at Linear, with a five-figure annual salary plus profit sharing, is 25% more than he earned in Rhode Island, he says. He has created one chip for Linear and is working on a second.

The cost of living in Silicon Valley remains sky-high. In June, the median cost of a home in San Mateo County hit $940,000, four times the national median of $231,500, according to the California Association of Realtors.

That caused some hesitation for Mr. Odell, who was a director of product marketing in Virginia for the instant-messaging business of Time Warner Inc.'s America Online unit. A friend mentioned the job at Sling Media, and Mr. Odell was intrigued by the San Mateo, Calif., start-up company's product connecting TV sets and computers. Its business was promising enough to attract $46.4 million in funding in January from media giants Liberty Media Corp. and EchoStar Communications Corp.

Soon after the friend's introduction, Mr. Odell, who also knew one of Sling's founders, got an offer from the company. It included a six-figure salary, a signing bonus to cover relocation costs, and stock options, which could translate into a big payout if Sling is sold or goes public. That sounded attractive to Mr. Odell, who had worked at AOL for six years but had worthless stock options because Time Warner's share price dropped 80% during his time there.

His wife, Kathleen, was concerned about the move. The couple had left Silicon Valley in the 1990s to be close to their families in the Washington, D.C., area. Their three kids -- a 7-year-old son and 5-year-old twins -- were settled there, and they owned a 3,300-square-foot, five-bedroom home on a cul-de-sac, purchased for around $400,000 six years ago.

Mrs. Odell, a stay-at-home mom, says she worried about moving the family and paying for housing. "It's a big risk," she says. "I was in denial. For a few weeks, I didn't think Jamie would really do this." In February, she and Mr. Odell flew to Silicon Valley and realized they would have to pay more than $1 million for what they considered a passable house. "It's scary that you can pay so much and get so little," says Mrs. Odell, who is also 40.

Still, they took the plunge. Mr. Odell decided to live out of a suitcase until his family could sell the Virginia house. They planned to move everyone out by early July and to get the kids into a good public school in the Bay Area.

Little has gone according to plan. Amid a slowdown in the Washington-area housing market, the Odells had their home on the market for three months and had to settle in mid-July for $150,000 less than their original asking price, which they decline to give. They're still looking for a Bay Area home and plan to rent for the time being. The move was pushed back to later this month and the Odells, with their living situation unsettled, plan to send the kids to private school at least for the first year.

Mr. Odell calls the move stressful. "Being without family has been tough, and working at a start-up, the hours are crazy," he says. Sling co-founder Jason Krikorian says he has taken Mr. Odell out to sing karaoke and given him a Starbucks card. "When I have an individual who's uprooting to join us, I think a lot about" what the person has to go through, Mr. Krikorian says.

At work, Mr. Odell has no complaints. He likes the increased responsibility and pace. He has even gotten his own taste of Silicon Valley's hiring difficulties: He has some five open slots to fill in his group.

"We really want experienced people, but we're finding it tough to find those," says Mr. Odell. While he hasn't looked outside the area for candidates, he says he ultimately might relocate the "right person for the job."

From The Wall Street Journal Online