Market Is Hot For High-Skilled In Silicon Valley

Five years after the dot-com bubble burst, job growth has returned to Silicon Valley. But it’s a different kind of growth than in past recoveries, favoring higher-skilled workers.

Netflix
Inc.’s hiring shifts are typical. During the tech boom, the online movie-rental service created 100 customer-service jobs near its Los Gatos, Calif., headquarters in the heart of Silicon Valley. After the tech bust in 2000, Netflix eliminated half of those positions. But the total headcount at Netflix’s Silicon Valley offices has grown 20%, to nearly 200 staffers in the last few years.

That’s because Netflix, while shedding some lower-end jobs, has aggressively created new, higher-level jobs. It’s adding jobs in departments such as Web engineering and product development: That groups’ hiring of engineers jumped 20% to more than 50 people in 2005 alone. “Our new engineers have an average of seven to 15 years experience,” says Patty McCord, Netflix’s chief talent officer. “Five years ago, we hired people with three to five years of experience.”

Past tech recoveries tended to bring new lower-skilled jobs as well as high-skill jobs. This time, tech firms — from big companies like Hewlett-Packard Co. to mid- and small-size firms such as Netflix, Adobe Systems Inc., and SanDisk Corp. — have moved lower-skill jobs out of the Silicon Valley area to cheaper locations, or outsourced them to foreign countries. The new
jobs they are creating locally often require specialized skills in engineering and design. Young companies like Google Inc. are simply starting out hiring at the high end, further shifting the overall balance.

A study last month by Joint Venture Silicon Valley, a nonprofit group representing businesses and government agencies in the area, found the nation’s tech capital had a net increase in jobs in 2005 for the first time in four years. Most of the growth came in the category of creative and innovation services, including firms in research and development, scientific and technical consulting and industrial design. In total, the number of Silicon Valley jobs in these areas grew 4% from 2002 to 2005, reaching 72,734. At the same time, the number of jobs in electronic-component manufacturing — which tend to involve assembly and other repetitive tasks — dropped 28% to 23,772, while jobs in semiconductor-equipment manufacturing fell 23% to 58,133. Overall, 14% of all the jobs in Silicon Valley today

belong to a sector called core design, engineering and science. That exceeds the comparable 9.3% slice of the work force in Austin, Texas; 8.7% in Seattle; and 8.3% in San Diego, according to the study.

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