While on this trip to San Francisco I ran into a “talent management” consultant.
I asked What is that? “We help companies figure out how to recruit and retain employees.”
How much do companies pay for his services? “Certainly hundreds of thousands of dollars would be the minimum engagement.”
Why would they pay that much when there are 15 million unemployed Americans presumably eager for jobs? “If there is a talented person among those 15 million then my clients haven’t found him or her.”
[Separately, the Wikipedia article notes that this field was created by McKinsey in 1997, i.e., right about the time that Enron was organizing all of its incentive structures according to McKinsey advice (Guardian).]
What kinds of companies are most interested in talent management? “We get a lot of technology companies. They have tremendous trouble with retention. There is no loyalty in Silicon Valley. Companies are paying signing bonuses of $100,000 and more. Before making real money people used to have to work for years, wait for stock options to vest, and hope for a startup to succeed. Today there are engineers at big companies earning $1 million and more as straight salary and bonus.”
A Mountain View resident confirmed that non-managerial engineers could easily earn $400,000 per year at Google or Apple [a huge step up from the 1980s, when a top engineer might have earned the equivalent of about $140,000 in today's dollars] but thought that $1 million was rare. Why weren’t more people studying engineering trying to get in on this? “You have to remember that the cost of living here is crazy high. A decent house is $2 million. You pay the highest tax rates in the U.S., outside of New York City. There are very few women who want to hang around in the Valley longer than necessary to get pregnant and collect child support. You’ll be working and/or commuting through horrible traffic 60-80 hours a week, mailing child support checks to an address in Santa Cruz or Napa, then going home to your lonely single guy apartment.”
[Fact check from the Web:
- Zillow says the median home value in Palo Alto is $1.8 million ($1118/square foot; the median includes condos). A single-family home in Mountain View, on the other hand, has a median price of $1.35 million.
- See the San Jose Mercury News for some traffic data.
- According to https://www.cse.ca.gov/ChildSupport/cse/guidelineCalculator , a one-night encounter with a Silicon Valley engineer earning $400,000 per year and paying a mortgage on that "decent house" would yield tax-free child support of about $43,000 per year ($777,600 over 18 years). This is roughly the after-tax median household income for Californians ($61,400 pre-tax according to the Census Bureau, fed into the ADP calculator) and could be doubled or tripled by having additional children with additional engineers.
- This article talks about working hours at Apple.