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."