NYC tech start-ups face talent shortage

BY Sushma Udipi

A job fair for startups, held on September 25 in the lobby of IAC’s office building in Chelsea, represented a clear challenge within New York City’s startup ecosystem: tech firms struggle to fill job vacancies with qualified employees.

At the 7th annual NYC Startup Job Fair, founded by entrepreneur Patrick Duggan, over 1,900 job-seekers and about 65 startups came together in an attempt to fill open positions. While startups face an abundance of funding, ideas, and opportunities, talented workers, especially technical developers, are hard to find.

“We still don’t have a CTO (chief technology officer). We are having such a hard time finding people,” said Corey Brill, cofounder for Suggestaurant, a startup that helps customers discover and share information about neighborhood restaurants. In a booth nearby, Virginia Lee, cofounder of Sail, an app that helps users shop for products they see on Instagram, agreed. “We literally couldn’t find people,” she said.

Finding talent plagued startups for a while, but the market has gotten tighter since a large number of startups  moved to the city, particularly the Flatiron District. According to a report by Compass, a company that provides automated management reports and benchmarks for online businesses, New York City has close to 9,600 active tech startups, and has jumped from No. 5 in the list of top startup ecosystems in the world to No. 2, after California’s Silicon Valley.

“About 50 percent of the vacancies were for developers but only 30 percent of the jobseekers were qualified developers,” said Duggan, who holds job fairs in Boston, Chicago, NYC, Toronto and San Francisco, and will soon expand to Los Angeles and London.

There are several reasons for the shortage. “There aren’t enough computer science majors graduating now because most students in the city were not clearly aware of the opportunities in this field and tend to follow their parents into conventional professions like practicing law or medicine,” said Brill. “That there is such high demand for developers hasn’t yet trickled down and people are of the belief that it is a difficult career to pursue.”

Startups also compete with Fortune 500 companies who recruit from the same applicant pool. Computer science graduates can work in consulting, finance or technology, and they are often drawn to large companies that offer attractive pay packages and benefits.

Career advisors and online job sites like simplyhired.com and payscale.com say that the average salary for computer science graduates is about $80,000 a year, although large firms can go up to $130,000, while startups pay about $60,000, although they often offer equity as well.

“The opportunity for graduates to apply to startups is good,” said Bob Caparaz, director of the Wasserman Center for Career Development at the NYU Tandon School of Engineering. “Students always want the variety and options to choose from. They get to work for a startup and try out another and then move on to a bigger companies.”

Rafal, one of the job-seekers at the event who preferred only to share his first name since he was actively seeking jobs in the market, said “I am looking to join one of these startups since I will be able to learn several roles. It is a good way to learn different things and shift jobs easily since you will have a variety of skills and also learn leadership skills.”

But some recent graduates don’t want to take the risk. “For joining startups, firms that have financial backing and companies that have been around for a couple of years are preferred,” says Sumarth, a computer science graduate who didn’t want to be identified since he is actively job-hunting. “Startups like Uber, for instance, pay well. Visas are also an issue. Most startups don’t sponsor visas so even if students are interested they don’t join.”

FogCreek, a software startup specializing in project management tools, offers internships to attract employees, a rare occurrence since startups typically don’t have time to mentor and train, and would rather take experienced professionals. Jordan Harris, a senior executive at the company, says interns are treated “the way law firms treat their employees,” with Broadway shows, tickets to social events, food, housing, and limousine pick-ups from the airport.

Several NYC startups have opened centers in other cities and countries to enable developers to work remotely. “We have 40 percent of our small products team in 4 other locations: Paris, Moscow, Dublin and North Carolina,” says Yarden Tadmor, founder & CEO of Switchapp, a startup that connects employers and jobseekers. Other brands like Trello follow a similar strategy.

Hiring or outsourcing HR executives to help build a team is another option. Startups are incentivizing existing HR employees with $1,000 or $2,000 bonuses for bringing in talent. “It is so hard,” says Lee. “When we ask people to refer someone they know, they go ‘Ha.’ They are a hot commodity now… good luck!”

 

 

 

 

 

This entry was posted on Thursday, October 8th, 2015 at 8:08 pm. It is filed under Business and tagged with Job Fair, Silicon Alley, startups, Talent Shortage. You can follow any responses to this entry through the RSS 2.0 feed.