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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."
Well send in your CV! It sounds like they might have a few job openings shortly...
I guess Google is finally realizing that there's no such thing as a free lunch (even if they provide their employees with one).
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.
Google technology is so far advanced beyond what we mortals need in a search engine that most of those engineers working in the labs are not necessary. For all intents and purposes, they are done.
Now they probably need to keep the servers up and running, and that can probably be done with a few colos located in various countries with cheap labor and moved around as necessary.
So cut the workforce, move all essential server capacity to India, China, and Eastern Europe, and let those millionaires go off and start other companies. God knows they've probably got some good ideas for other products, better to see them deliver those ideas from their own small company than to see it bastardized by a large Google (product placement and marketing and all that).
Braindrain at Google could be just what our ailing tech sector needs.
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....
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.
Look, I know you dont want to hear this... but...
;) Yes Google will retain maybe 5% of the millionares, yes they move on to other things, and yes they knew this would happen.
When you're hiring someone, it's absolutely CRITICAL not to pay someone enough to be "comfortable". It removes all motivation, and makes for unmotivated and uninterested employees.
Management 101, and a quick lession any hiring manager would learn if they didn't already know.
Giving people piles of cash in options, is one of the mistakes startups make over and over and over. And this is normal to the process.
But, that's the fun isnt it
- Adam L. Beberg - The Cosm Project - http://www.mithral.com/
Google has the challenge of building a whole new mission. With billions in the bank and way more employees than are needed to operate a search engine, there is no way they can keep going if they just maintain their current mission. They need to get a whole new mission.
Another challenge they need to get a grip on is a release culture. Up to now, most of their products and services have been in perpetual beta. If they want to expand, they need to get a mentality that sets targets, and makes releases. Right now they look like Netscape did. Their most visible product, the Google search engine, has way more features, many of which are useful, than any competitor. In terms of search quality, though, I think they already fall behind the new MSN search. If all they do is tack more features on and add new beta products they will fall behind. Granted, they have a long time to make it work, with that mountain of cash, but that won't sustain them forever.
Google needs to decide on a new vision that is grand, but reachable with the money they have now. Then they need to execute their new plan successfully. Neither staying where they are, or growing at their current rate, is a viable option. They need big changes. They may well be up to it, but we won't know for certain for a few more years.
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.
To quit your job at google go to: {last 10-digit prime found in consecutive digits of e}.com
If folks leave, one wonders how hard a time they will have recruiting new Googlers...
Salaries were not competitive with the market as recently as 4 months ago. Of course, back then they were still "Pre-IPO." IMHO, You'd have to be foolish or a huge gambler to take a meager salary in lieu of options at the current strike price.
So once the brain-drain starts... there may be no way for Google to staunch it... unless they start hiring very competitively (and presumably, retro-compensating current employees).
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.
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.
Fourteen years ago? WTF? There wasn't even a World Wide Web in 1990.
"Never attribute to malice that which can be adequately explained by stupidity." -- Hanlon's Razor
1900 employees, as in the number of employees Google has, not 1990 employees, as in employed on the date of, which was your interpretation... and would make no sense.
2004-1990 does equal 14, so you can subtract, but it's obvious you can't read.
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Mod me down, you fucking twits. Go ahead. I dare you.
(I read with sigs off.)
CFO: It looks like we have quite a problem, Eric. We are losing employees because their stock options are worth so much, they don't wan't to work anymore.
CEO: The deuce you say, George. There's only one thing to do.
CFO: What's that?
CEO: George, we have to tank the company. When the stock bottoms out, we'll buy back those options and correct the retention problem. We must destroy Google to save it.
CFO: OMFG, you're brillant. But how will we devalue the company? Google is doing great.
CEO: We're going to need help. We need someone with experience in this sort of thing. Get Carly at HP on the phone, quick!
I work at a certain EVIL company, and there have been some rumors that Google has been sniffing around, looking for good employees (yes, yes, obligatory MS joke here...) to bring over.
It looks like they are agressively trying to make sure that they keep on top of the talent curve. MS has always made an effort to grab up all the most talented engineers coming out of school. Google might try to give them a run for the money.
HA! I just wasted some of your bandwidth with a frivolous sig!
Intelligent people with enough money to convert their ideas into a business isn't something to be sad about. The slight hardship Google might suffer is more than offset by the chance for a lot of smart people to pursue their own interests.
The thing to understand is that like other cutting edge Internet companies, Google is no longer what it was. It is now a publicly held company with ONE SPACIFIC THING in mind for its mission: Produce cashflow for its stockholders. This is now Google's "mission". One day, it will be the mission of many of today's successful Open Source brainiacs. This is the way things tend to flow in a free society, people for the most part are driven by the need to survive and live in comfort.
"Who are in control, they are not in control of anything - they don't even control themselves!" - Glen Beck
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.
I, for one, welcome our millionaire overlords. I wish more tech companies had folks who had enough money to retire, so that those who don't have enough money yet would be able to make a bit more and advance their careers a bit faster. Where I work, it's like a freakin' concrete wall up there. Folks who have been with the company are well put in their trenches and it's nearly impossible to get anywhere, because the "old boys club" is everywhere. I wish the stock price doubled and they took off. I'd be a happy camper then.
Ha, they would be wise to cash out now. Google is just another company, and they can't ride a much higher wave. I worked at (unnamed major software company) pre and post IPO. The smart ones exercised their options as soon as legally possible. Guess what, the stock never went up to those IPO year numbers again. I saw lots of programmers that came in during year one for low salaries and big options get that cream. Even the shipping clerks had 20k or so of options. Besides, there are geniuses graduating from universities every year. It is foolish to think that google can't attract or afford new top level talent.
Thank you Google for showing us that one in a million company where stock options actually pay off ! Google and it's employees have achieved the American dream and should be proud. America is still the greatest country in the world. You can roll the dice, start a company, and sometimes even be successful. On the flip side, if you fail, America is still the land of opportunity. You can always start over.
America is still the land of hope and promise, even though our leaders are trying to crush the hopes and dreams of the American spirit with FEAR, UNCERTAINTY, and DOUBT! Thanks again GOOGLE, you are a bright ray of light peeking through the gloom.
Not anymore. They used to, but Yahoo has sinced bought a Search Engine company and have used that as the basis of their searches.
which already include an in-house masseuse and free lunches prepared by the former chef to the Grateful Dead.
... by the former chef to the Grateful Dead".
For a moment I thought that read "an in-house massage
"And zeez is how weee tenderize zee meat before we apply zee hot sauce... bork! bork! bork!"
Vintage computer adverts: http://www.vintageadbrowser.com/computers-and-software-ads
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...???
Disclaimer: I work for a company, but I don't speak for them.
No doubt all those Google options have a beginning date and an end date and a strike price that's far out of reach today and will remain so as Google stock slowly slides backt to rational levels.
On paper is one thing, real value is quite another. Millions of dotbombers know the reality of stock option accounting and if they were worth 'millions' from the get go they'd be warrants or gifts not options.
On the contrary... Oh, how I wish I used to work for Google!
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
Another problem are the 40% of people who AREN'T going to be millionares. When your co-workers who don't get to quit start driving into work in expensive cars, etc, its going to be hell on morale.
On a slightly less flaimbaitish note ...
Yesterday, I worked 19 hours.
The days before, I worked something on the order of 13-14 hours.
I'm working on a project that's pretty damn important to my company, and I've got to put lots of late hours in. My boss makes me do this.
She does this by working harder, and often longer, than I do. This morning, when I left at 4am, it was only about 45 minutes after she left.
She does this by telling me how much she appreciates what I do, and the impact I make.
She does this by providing me with all the snacks and soft-drinks I can drink, and by making sure that when I work late I'm well starbucked and fed.
She does this by paying me a pretty darn decent wage, and letting me know that when this company can afford to pay me more, they will.
She does this by looking at the fact I worked while on vacation and letting me determine how many days of vacation I really officially took, if any.
And so in return, I spend 70-80 hours at work during crunch times and make sure that what needs to get done gets done.
Everyone I know at Google is like this in this regard. I suspect their managers are like my manager in these regards. I suspect "FOAD" is not normally something a Googler ever considers wanting to tell their boss.
A "Search Engine company"?
Yahoo itself was a search engine company/portal and with its acqusition of Overture, it now also incorporates technology and algorithms from Altavista and Inktomi as well.
I am not surprised at all that Yahoo's search results are just as good as Google's, if not better.
Just think... what if say tomorrow, google.com timed out on _every_ request. what would you do? You'd just go use Yahoo, or MSN, or some other search engine. The PageRank algorithm is very well known and documented---heck, even I implemented it for a limited dataset. You can be sure that if it works well for google, then Yahoo, and MSN search engines are doing it. (there are many more ideas other than pagerank that are better---pagerank is just simplest to implement) ...on a less optimistic note, google just needs to mess up their public image a few times (every public company does evil things from time to time)---and Microsoft or Yahoo jump on that chance and hype their search engine... and before you know it, google's stock is in single digits, and everyone's using some other search engine.
Now, GM isn't just about cars. They're about a LOT more. I can't think of any single thing they can totally screw up to drive their stock price all the way down.
"If anything can go wrong, it will." - Murphy
While Google's employees may be a clever lot, most of them are just not financially astute enough or are too intrigued by their jobs to realize that they have decaying gold in their hands. Yes, they know they have gold, but no, they cannot imagine that it's a special kind of gold that decays.
As such they will clamp on to their options and shares, linger on and eventually see their value erode, like so many engineers have seen past the bubble. To add insult to injury they will have paid taxes on the options.
So here's a sound advice to anyone in a similar position: grab while the grabbing's good. If you linger, the grabbing times might pass you by.
Flourescent (adj): smelling like ground wheat.
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.
I tried that on a test once. They didn't buy it then, either.