The fees companies are paying to Silicon Valley recruitment agencies for top software programmer talent have doubled in the last two years, hitting between $30,000 to $40,000 per employee, the Wall Street Journal reports.
That report quotes Paul Harty, president of recruiting outsourcing company Seven Step RPO, who was part of a larger look at how Tesla is ramping up its hiring amid mounting competitive pressures from the likes of Apple.
The way it works for most companies looking to hire more developers is simple: You contract a recruitment agency, they go out and find talent (often via annoying. thirsty cold emails to working engineers), and you pay based on each successful hire.
Tesla CEO Elon Musk shortcircuited a lot of this process: In late November, Musk tweeted out a call for “hard-core” software engineers to work on Tesla’s “Autopilot” function, with a promise that he’d be interviewing candidates personally. His inbox was flooded with resumes.
But with so many startups in Silicon Valley, all of whom need programmers, and most of whom know full well the value of their work, it’s a crazy competitive market — meaning that top recruiters stand to make a fortune. Multiply that $40,000 fee times the fifty seats a fast-growing startup might need to fill, and you’re talking serious money.
Indeed, this is why having a famous, charismatic CEO like Musk is such a desirable asset for Silicon Valley companies: It makes engineers come to you, rather than the other way around. It saves both time and money with recruitment.
But not every startup is so lucky. And so, recruitment agencies in the San Francisco Bay Area will continue to make bank.
In the meanwhile, Musk isn’t shy about Tesla’s prowess at recruiting and retaining talent. He recently said that Apple only hires Tesla’s worst engineers.