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Google Faces Employee Retention Challenge
prakslash writes "60% of Google's 1900 employees now hold stock options worth at least one million dollars. According to experts in this Reuters article, it is now imperative for Google to maintain its sense of mission. If it fails to do so, a whole slew of employees facing post-IPO burnout and boredom will leave the company to go back to school, start a new company, or join the ranks of high-tech early retirees. Such a mass cashing-out could lead to a decline in Google stock price and intellectual brain-drain. Oh how I wish I worked for Google."
Google seems to already be a step ahead of this problem, creating a billboard puzzle in the Boston area and publishing a test for potential applicats to fill out.
Not only do they have the problem of suddenly having a few hundred jobs to fill, but they also have the problem that nearly everybody in the world would like to work for them. By setting up such qualifying quizes before even asking for a resume, Google's trying to filter out the best applicants early in the process so that they don't waste their time on pursuing people they'll not end up hiring.
So, yes, Google's going to lose some key talent because they've just created a bunch of modern-era dot-com millionaires. However, they'll just hire somebody else to replace anybody they lose and will move on.
As long as they have interesting things for people to work on, I don't think they should have too much trouble keeping people. Who really cares about money? It is hard to find interesting problems to work on Google lets their employees do that AND pays them for it. What more in life could a person ask for?
So maybe some people who don't need jobs anymore can retire and some people who do need jobs will get them. Sounds like a free market to me....
At what point does Google go from hip, cool company to overbearing, monopolistic, Microsoft company? It seems public opinion is a bit fickle.
Even if it is only subject to capital gains taxes, that takes a bite too. The article only says at least one million... doesn't say what the average is or anything. Also, it doesn't mention any selling restrictions.
The way the market goes with these things, I don't expect the valuation to stay at 180 P/E for all that long... I could be wrong, but I suspect this will be a self correcting "problem".
I sure wish I had the problem. [4 time stock option looser]
This issue is a bit more complicated than you think.
That billboard thing was a piece of piss. I wouldn't consider myself qualified to work for Google and yet their little puzzle was so trivial that I couldn't actually be bothered to solve it. Added to which, of course, is the fact that you could Google the answer within a day or two of the buzz commencing.
If they really wanted to use that sort of approach to resumé filtering they'd have used a hard puzzle and put a time limit on it. In reality, it was a marketing tool - albeit quite a good one, in my opinion.
Yahoo's search results aren't that much different than Google's in the top ten.
No company can create something and just sit on it and remain in a market position. If MS couldn't parlay its success with MS-DOS into its success with Windows 95 into its success with IE and 98 and XP...
Yeah. Nobody would still be using MS-DOS today. They'd all be using Linux or BSD or something.
So Google does need talent to stay competitive.
I think there was a time limit. The moment the Slashdot effect hit that e-mail address, they most likely stopped using it and only responded to those who answered the puzzles quickly before the solutions were widely published.
I like their Google Labs idea. It's a great way to show the employees that they're supporting them, and at the same time allows them to stimulate the engineers creativity, probably helping to reduce burn-out rates as well.
Americans use the term CVs as well. Americans with advanced degrees. If you want a seriously nerdy position at google (instead of clerical), you'd do better with a CV instead of a resume.
Feel free to use a dictionary and note the difference between the two terms. I have both a CV and a resume and I'm still an American.
So, you're one of those people who reads Dilbert and sympathizes with the boss?
If my answers frighten you, stop asking scary questions.
They interviewed some ex Microsoft employees. All of them are millionaires due to stock options. Now they are mostly in their late twens wondering what to do with their existence for the rest of their time (one of them - living in his huge mansion alone said that he pretends to be into IT consulting on dinner parties, because saying that you basically do nothing is kind of embarrassing).
It makes me wonder if stock options are really a sustainable way for both sides to grow. Wouldn't it be better to have more employees at a lower wage like 500 grands a year? Every ex MS worker being part of the documentary suffered some kind of burn out syndrome, so it might make sense to reduce their workload at the same time.
I don't read replies by ACs.
No, you hire people who will enjoy the work, the kind who appreciate the money, but don't care too much about it.
If all you hire is people wanting to move up to $70K a year, instead of people looking for new cool things to do, then, yes, you create the lack of motivation that money seekers get.
This whole article is based on interviewing people at other companies and asking what happens after an IPO. There's nothing specific about Google at all. Is there any actual evidence of people at Google selling out? Is there one actual instance of somebody leaving Google because they got rich on the IPO?
Recently I was interviewing with Google in Mountain View (and I'm posting AC for that reason) and I didn't meet a single person there who seemed like the IPO had affected them at all. Some engineer made the comment to me "Yeah, I ended up with a lot of money after the IPO, and the thought crossed my mind to leave, but what would I do? I can't think of any place I'd rather work."
Everyone loves to hate on Google now that they're no longer the scrappy underdogs. But after walking around the "Googleplex" I can't say I've ever seen a company where the engineers were happier.
Options usually vest over a number of years, so while they may be worth a paper-$1m, they're only going to see real-$1m if (a) they keep working hard/smart enough to keep the paper-value high, (b) they keep working long enough to cash in the paper-value to get real-value.
This is exactly what options are designed to do!
With regard to "brain drain", for a company like Google, it would have people champing at the bit to work there: so any lost talent is easily replacable with new hires, if they keep standards up in the hiring process. And, it's good to have fresh talent come in over time to keep revitalising the place.
Finally, as others have mentioned, many of these types of people actually like what they are doing. I can tell you that if I were a millionaire, I'd live a nice lifestyle, but I'd still be pottering around on code or doing something creatively interesting -- (a) because that's what I like to do, (b) I'm just not the type of person to laze around doing nothing.
There are _many_ examples of serial millionaries and creative types who do what they do because they love the creative elements.
What if they all decide to stay and continue building this company and its stock value?
What better place to increase your own wealth but where you have had and can continue to have influence on its growth.... as opposed to some disconnected, abstracted stock market game of chance...
Imagine what those who got out early with MS would regret now!
On teh more intelligent side of this, don't ya think the google guys would have considered this... especially given all the apparent presidence...???
This is why Google should have never IPO'ed. Google is safe for the next few years as there is no real competition and the brandname is legendary now, but when ax falls, Google may find themselves in the closet with other great search engines like HotBot. Why would I want to work at google for $50,000 a year, when I could make the same at another search engine company and get stock options and try to make the company another google and then make my own million.
"Jeremy, you need to get to an internet cafe and cut and paste some appropriate sentiments about me from the world wide
Well, when you claim to be good yet position your IPO to rape buyers of as much cash as possible
They weren't trying to rape their IPO buyers. They were trying to prevent Google from being raped buy the investment banks who traditionally lowball the IPO price knowing there will be a huge first day appreciation as the market prices the stock closer to what it's worth (to the market, that is), and the ibanks and their large institutional investors (mutual funds, pension funds, etc.) can pocket the float. But that float doesn't belong to the iBanks, it is value created by Google and no one else, and it should rightfully be pocketed by Google. The ibanks get it only because they control the financial system - they're the gatekeepers, and the toll has been massive, until Google executed the first Dutch Auction with a high float price. So I have no problem with what Google has done, which is basically to ensure they get roughly what they have earned.
IMHO it will be a great day when open electronic IPO networks make the market more freely accessible to new companies looking to go public, and they'll no longer have to go through the ibanks in the manner they do now. A similar paradigm shift happened when stock trading went online in the 90s, and then went to no/low-fee trades. Banks hated it, but consumers loved it, and some banks adapted and learned to profit from it. I think other areas of finance, IPO's for one, are ripe for such a change. I don't expect to see it soon, and don't pretend it will be technologically or politically easy, but hopefully it will happen one day, and I think Google may have taken the first small step in that direction.
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