As National Employment Stalls, Job Market Booms In Silicon Valley

As the bleak June jobs report released Friday continues to settle, a ray of sunlight is peeking out from sunny California. Thanks to a flood of venture capital and angel investor dollars, employment rates in certain sectors of Silicon Valley have seen a dramatic increase in recent months, creating a booming job market for tech wizards.

"It's surreal in the Valley, compared to the rest of the country," said Harj Taggar, a partner at startup incubator Y Combinator. "It's so hard to hire people here -- and salaries for engineers are going through the roof."

The market for software engineering talent in particular is very strong, according to Anand Sanwal, CEO and co-founder of CB Insights, a venture capital database.

"That's where you see that demand -- it's for very specific programming expertise. That could be folks who can do hard-core algorithms or front-end development or web design. Those will be the primary areas where demand outstrips the supply."

By way of an explanation, Sanwal pointed to a recent report that detailed a considerable increase in both deals and dollars in the first quarter of this year: Venture capital companies made 738 deals and spent $7.5 billion from January to March of 2011, a $1.6 billion increase from the same quarter last year.

Of those deals, the report showed that 46 percent were for seed and series A rounds of funding, stages during which companies are likely to build out their teams and hire developers.

Russell Hancock, the CEO of Joint Venture: Silicon Valley Network, an industry coalition, spoke to the broad decrease in unemployment in the Valley.

"The area's overall unemployment rate is now at roughly 8.5 percent -- a drop from 11 percent 18 months ago," Hancock said, citing his own research. The valley is "up to roughly 48,000 jobs in internet companies -- and that number now exceeds what it was during the dot com boom," Hancock added.

The hottest jobs, he said, are those in "cloud computing servers, mobile devices, standard IT and new social media -- companies that are providing websites as a tool for commerce. "

Hancock noted that jobs in the "professional and business services" category -- a tech-heavy sector -- grew considerably in the first three months of the year, adding 1,100 jobs in a single quarter.

As a barometer of just how much the sector has grown, according to data from StartupHire, an online job board for startup companies across the U.S. that has over 13,000 listings, the number of current open positions in Silicon Valley is 79 percent higher than it was this time last year. Silicon Valley currently has 48 percent of all the board's open jobs listings in California.

Steve Roberson, a StartupHire co-founder, said finding "an engineer that has some experience in web or mobile is more challenging than ever."

"From our perspective, companies can't enough of them."

Comments

[Dominic Son]

10:53 PM on 07/15/2011

Stop lookin' at others willing to do what you don't want to do, and telling them to move back. Watch this 10 times over, practice it, write some example code, and get a job in a snap: http://www.youtube.com/watch?v=hQVTIJBZook

[demilieu]

02:42 PM on 07/12/2011

It's inevitable software will play a big role in the economy. For those who are good at writing code and for people who come up with innovative programs, I have to applaud you.

[Gate73]

10:43 AM on 07/12/2011

The folks on here who say "H1Bs must go" are ignorant of the fact that American universities are not graduating home-grown talent in the physics, math, and engineering, and computer science.

The fact is that there are no American citizens who can do these jobs. If you don't believe me, go to the website of any top university in the US and look at the lists of graduate students in these fields.

[demilieu]

02:46 PM on 07/12/2011

Really?

[World Citizen]

04:32 AM on 07/12/2011

I once received an email ad posting a job offer in India. What struck me is that it said "You must have graduated from one of the top schools in India".

I wrote back to the recruiter and told him off. I said, "How dare you put this requirement when so many indians have taken our jobs in the U.S. and we have not required them to have graduated any of our tops schools in the U.S.!"

And here is another factoid which I am sure many americans do not know. Do you know India has very strict VISA policies? In order to even go to India for business, it was required that a local business there invited me.

Why won't our government stop this nonsense? Get rid of the H1B program. Get rid of the H1B workers and you'll see our wages pop !

[sueinmn]

06:33 PM on 07/11/2011

How many HB Visas or green cards are the only ones getting jobs? Can we say AMERICA or shall we say India?

[ChewieSpot]

05:18 PM on 07/11/2011

My family, about a year ago, moved to Silicon Valley for a job. We are U.S. citizens, white, and are around 40. We almost didn't take the position because the pay originally offered was EXACTLY the same as what we were making at our current job! To add insult to injury, we knew we would have to move into a much smaller residence (about half of what we currently owned (3000sqft), had to get rid of the yard and the basement (storage), and then charge us double for it). We decided that we could live in a smaller place, garden off the balcony, and stand to get rid of some "stuff" and a car for a few years. However, the company would still have to up the offer so that we could continue to invest in our future (IRA's, HSA's, ect.). Fortunately they upped the offer enough to offset the pain of a diminished standard of living.

We decided to do it for the experience and the contacts. But we aren't going to be living here till we retire, we can live much more comfortably elsewhere. I don't care how nice the weather is most of the year, it is too crowded for our tastes, and too expensive (besides, most people are too busy, being busy to enjoy it!)....though I will miss all the glorious diversity; Where else can you stand on a street corner for 15 minutes and hear at least 5 different languages!

[fortressfountain]

03:15 PM on 07/11/2011

The people with the visas who make low wages have children and get to collect free healthcare and wages on our dime.
I think if I were a software engineer of the usa and applied for the job I may be forced to file a discrimination suit for age or nationality.
Whoops, I cannot sue a corporation-it is the other way around.
Signed walmart and the supreme court.

[Sunny California]

06:24 AM on 07/11/2011

Ha! Try this: Next time, go sit outside one of these large tech companies during lunch or after working hours and watch the people come out of the building. I bet it would like you were sitting in the middle of India. No offense, but these H1B's gotta go.

And please don't tell me that we don't have enough qualified Americans to do the job. Out of all the millions of people unemployed, you can't tell me that companies can't find a few hundred programmers, software engineers, etc.

[Blissable]

01:16 PM on 07/11/2011

Really? We advertised a s/w engineering job at our company recently. The experience needed was fairly specific, but not ridiculous in today's market. We required US citizenship on the ad. We are a small SoCal company, but the pay is very good and we offer full health benefits plus we did not want to go through the hassle and expense of sponsoring an immigrant. It's neither easy nor cheap to hire H1B workers. In 3 months we got exactly 2 applicants, both from out of state and neither of whom had the experience or skills we asked for. So much of all those qualified Americans. The fact is, many college grads these days can barely write a resume without typos. Education is failing and hard skills are dropping across the board. Getting rid of H1B workers will not change that fact. It'll just make it harder for companies who need their skills to compete because there are not enough American workers who can do these jobs. Maybe you should take off your shades.

[laura r]

02:14 PM on 07/11/2011

Maybe you should get real. I know a lot of software engineers, that are U.S. Citizen.
So, maybe you should rework your ad to appeal to workers that expect to get paid well.
No one wants to work for a cheap employer.

[World Citizen]

04:22 AM on 07/12/2011

Maybe you should take your shades off and offer non-H1B pay.

[Vahidreza Ramezani]

06:19 AM on 07/11/2011

Alex, companies no longer train people from a related field which is why there is an apparent shortage. Both R&D and training have been moved to universities; both areas need better coordination with industry and direct modern work place training courses.

[Chuck Dick]

11:47 PM on 07/10/2011

Too bad only people with H1B visas can get those jobs. There aren't enough smart Americans to get them.

[laura r]

02:18 PM on 07/11/2011

Their are a lot of smart Americans in Silicon Valley, companies want the H1B visas because they do not have to pay them well. Because many of them are willing to live 4 families in one house.
The scam has been going on for twenty years now.

[Brian A Benkle]

04:27 AM on 07/12/2011

It's not that they pay lower, the government subsidizes companies to hire those with the H1B visas. They also utilize slave labor, I mean they create dozens of internships, which means they get free labor.

[Querent]

10:28 PM on 07/10/2011

Good article, Alex. Saw you on "Hardball" last week. You are one of the three or four most intelligent guests to appear on that show. That's saying something, because that show abounds with smart people. Except for the host, of course. But you knew that.

[BigDaddyWow]

08:35 PM on 07/10/2011

This is a good sign that SV is hiring because it's generally an indication capital flow for new businesses. And, as mentioned in other posts since the cost of living and salaries are starting to get back in their historic patterns of absurdity which means that investor funding will begin to finally move to other parts of the country where businesses can be started and funded for much lower cost.

[Joyce Guess]

06:12 PM on 07/10/2011

It's wonderful there are jobs in "Silicon Valley", but the question is where would one live?

[Lew-Lew 46]

04:38 PM on 07/11/2011

No kidding...You'd have to start a co-op and five to six families living together to make it! I grew up in that area of CA. and ended up leaving my home town and my home state so I could raise my kids with a roof over their heads and food in their bellies. I really resented that. I still can't move back because of the cost of living.

[logicanada]

01:33 PM on 07/10/2011

All the good jobs are in Alberta.

[swoosie1]

11:39 AM on 07/10/2011

What a stupid article. There is a looming layoff at Cisco and another 5k people will lose their jobs. There are thousands of locals who've already lost jobs. HB-1 visa folks are the gold standard for keeping jobs and if you are over 40 in the valley, forget about finding work. People are running scared and are over-levergaged with underwater homes and credit-card debt to make up for the lack of raises and the end of good times. I would say that 8.5% unemployment in the land of milk and honey is way to high to consider it good times. Please understand that salaries are high in the Silicon Valley, but not when you know about 2 bedroom apt. costing on average, 2700 a month, or homes that average 600k. I suggest that this reporter bone up on reality.

[airmikee99]

12:13 PM on 07/10/2011

Becuase those 5000 potentially lost jobs at Cisco outweigh the 48,000 jobs the area has added in the last 18 months? People over 40 are replaced by younger folks? No way! They should make a law that bars such practice, they could call it, oh, I dunno.. "The Age Discrimination in Employment Act of 1967."

It's pretty obvious to see why you can't find a job in Silicon Valley, I wouldn't trust you to make me a sandwhich, let alone something technical and complex.

[drumz]

12:52 PM on 07/10/2011

You are clueless. "The Age Discrimina­tion in Employment Act of 1967."
And tell us genius, who enforces that and how can you prove it? Are you over 40? I am 59 and I am discriminated against because even though I am very talented I cannot find work. They ask me what I make and I say I used to make $60/hour but dropped it to $35 and am now asking $25 and I am struggling. Is that too much to pay someone with over 20 years experience?

[swoosie1]

10:52 PM on 07/10/2011

When you take the binkie out of your mouth and learn to spell, you can comment on this. But it is clear that you have no idea what is going on out in the real world of the Silicon Valley. Those of us who have worked our way through the maze of high-tech jobs for the last 25 years, as I have know directly what is happening in the real world and this article does not represent the realty of what is happening on the ground in the Silicon Valley. So, please, when your mommy and daddy pay off your student loans and you can actually work for a living, and you do that, oh say for like 15 or 20 years, then come back and comment on what is happening and I will respect your views. For now, you are about as stupid as the article.