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Comment by benihana | Hacker News Reader

Wait a second. These emails[1] (not the commentary around them) seem to say that the big tech companies in the valley agree not to recruit employees of other companies. There's a big difference between recruit and hire. It seems to me like they've all agreed it's pointless to just poach each other's employees.

Eric Schmidt says the practices are zero sum. In my opinion this is exactly correct. If all the big companies just move each other's employees around, nobody benefits. If instead they all agree to look outside of the talent that's already been recruited, everyone (including developers) benefits. New talent keeps coming in, and developers not in big tech companies have a shot at working at places their parents will recognize.

1. http://pando.com/2014/03/22/revealed-apple-and-googles-wage-...

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"If all the big companies just move each other's employees around, nobody benefits."

The companies may not benefit, but the developers certainly will! Not just the ones being moved around, either --- it'll raise market prices, and so _every_ developer will benefit, even those who don't move.

Honestly, an engineer who is unhappy with their salary can pretty much walk down the street to the next company in the Valley. They don't need recruiters calling them to remind them of that.

I think drawing a line from a handful of non-recruitment agreements to price depression in the specific world of the software engineering industry requires more than hand-wavy assertions based on generalized economic theory.

Nope, recruiting doesn't just move employees around, it drives up developer salaries.

Exactly. People wonder why salaries are so high in finance. Part of that is intense recruiting competition.

Finance pays out a fantastic amount of profits to the people generating them, i.e. the employees, rather than just the shareholders.

Except salaries aren't high in finance. Bonuses are high, and are usually based on performance.

Um less so now as the campaign against bonuses in the city has led to increases in contractual pay :-)

When you say "nobody benefits", you are leaving out the employees, who will see higher wages as a result of competition for their services.

In fact, if you only consider the companies (and not the employees), this kind of competition is negative sum, not zero sum, which is kind of the point.

I'm sure when Eric Schmidt was being recruited for Google from Novell[1] he didn't get a pay rise or better share options at all...

[1] http://en.m.wikipedia.org/wiki/Eric_Schmidt

Read it again - granted 14.33 million common shares at 30 cents each in 2001. The IPO 3 years later was at $80, opening in the markets at $100 - he made $1.43 billion that morning, in common stock alone.

Yes, I know, I was being ironical Gerry.

Irony doesn't read well in a text medium among people who may or may not have English as a first language.

Irony doesn't read well, but you see there is a comment by me pointing it out. It's also in the context of the previous answer obvious to most people.

Are you suggesting we on hacker news attempt to write comments for the lowest common denominator? I think a lot of people who have English as a second language (American's for example) would still enjoy a bit of irony.

:-)

> If all the big companies just move each other's employees around, nobody benefits.

1) Big companies 'move employees around' 2) Industry salaries increase as a result 3) Supply of engineers increases as result of increased demand signaled by the higher salaries 4) Everybody benefits from influx of new talent

The 'new talent' is going to come regardless. It's the salaries in the industry that determine the quantity and quality of those new entrants over the long term.

Not entirely true. The email at the bottom of the businessinsider article indicates that employees from MS, Novell, Oracle, and Sun cannot be considered for manegerial PSGA roles even if they applied on their own.

> If all the big companies just move each other's employees around, nobody benefits.

There's one group of people who do benefit from this - employees themselves. The positive feedback loop that comes of such zero-sum scenario raises the salaries of developers and also gives them an advantage when negotiating compensation.

I do side with the companies on this one - such practices waste lots of resources and reduce the quality of company's output, so the society at large loses.

What else is he going to say? That it's not zero sum and he and the other executives pursued this course of action to suppress wages for their producing employess while increasing their own compensation? THAT would be shocking.

> These emails[1] (not the commentary around them) seem to say that the big tech companies in the valley agree not to recruit employees of other companies

My first reaction when reading this was "well, duh". However, I just noticed that the title of the piece is incorrect. That's BI's bad, they should know better.

Zero sum for the companies themselves, possibly, but certainly not for the developers. If companies have to compete over developers, then developer salaries naturally become more competitive and will increase.

It's an anti-competitive business practice, plain and simple.

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