Google struggling to retain employees

Google Inc. is fighting off Facebook Inc. and other fast-growing Internet firms that are poaching its staff, a reversal for a company that has long been one of Silicon Valley’s hottest job destinations.

Among the defectors are engineers such as Cedric Beust. The 41-year-old spent six years at Google working on projects like the mobile operating system Android. But by this year, “I was ready for something different and more challenging,” he said.

Mr. Beust’s job target list included Facebook, micro-blogging service Twitter Inc. and professional social-networking company LinkedIn Corp. After interviews at several of the firms, Mr. Beust in May joined LinkedIn as a principal software engineer.

Competition for experienced engineers like Mr. Beust is especially strong as Web start-ups ramp up their hiring and poach from established companies like Google.

Facebook and other start-ups have a recruiting tool that Google can no longer claim: They are private companies that haven’t yet gone public, and can lure workers with pre-IPO stock. Recruiters say Facebook and others also pay competitively, with average annual salaries for engineers typically starting at $120,000.

“There’s a huge shortage of engineers,” said Valerie Frederickson, a recruiter in Silicon Valley. She said a recent client of hers who received a master’s in engineering this spring from Stanford University got caught in a bidding war between Google, Facebook and others. He got hired with a $125,000 salary, and is now being offered $175,000 by the companies that lost out initially.

Facebook today has about 1,700 employees, up from 1,000 a year ago. Twitter now has 300 employees, up from 99 a year ago. LinkedIn said it started the year with 450 employees and expects to end the year with 900.

“It definitely is a little easier for us right now, compared to a lot of companies” to recruit, said Colleen McCreary, the chief people officer of online gaming company Zynga Game Network Inc. The San Francisco company said it began the year with 500 employees and now has 1,250, including hires from large firms like Google and Microsoft Corp.

Much of the most recent hiring battles have centered on Facebook and Google. According to data from LinkedIn, 137 Facebook employees previously worked at Google. Among Google’s recent departures to Facebook: Lars Rasmussen, co-founder of Google Maps. Google Chrome architect Matthew Papakipos, Android senior product manager Erick Tseng, and top Google ad executive David Fischer also decamped to Facebook earlier this year.

To help attract new recruits and preempt defections, Google Tuesday said it was giving a 10% raise to its more than 23,000 employees. Google Chief Executive Eric Schmidt wrote in an all-hands email, “We want to continue to attract the best people to Google.” Google declined to comment Wednesday.

To be sure, Google is also on a hiring spree and increased its work force by 19%, or 3,600 people, over the past year. To acquire some high-profile talent, Google has ramped up acquisitions of start-ups such as social app maker Slide Inc. And while Facebook is a huge draw now, it too has become too large for some employees, who have left to start other projects.

Hiring wars aren’t uncommon in Silicon Valley, with mature tech companies long battling with up-and-coming start-ups for workers. A few years ago, Google was snaring workers from Yahoo Inc., Microsoft and others. Now, as Google’s growth has slowed, it is finding the tables have turned.

“Google isn’t the hot place to work” and has “become the safe place to work,” said Robert Greene, who recruits engineers for start-ups such as Facebook.

Facebook’s social-networking technology and smaller size is also appealing, say some job seekers. Software engineer Murali Vajapeyam, 29, who left Oracle Corp. this year, said he interviewed at Google and Facebook.

“Facebook is more interesting,” said Mr. Vajapeyam, who didn’t land an offer with Facebook and ultimately elected to join a San Francisco software start-up in September.

Google and Facebook’s recruiting battles come as the two companies increasingly appear to be moving onto each other’s turf. Among other things, Mr. Schmidt has spoken about adding social-networking elements to Google’s services.

In recent days, the companies have engaged in a public war of words over data-sharing practices. Google has complained that Facebook is engaging in “data protectionism” by not allow its users to export their friends’ email addresses to other websites, including Google’s.

Sounds to us like Google is having the same issues that they created for Microsoft, Yahoo and other established companies. Is something wrong or just a natural cycle?

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