Thoughts on Vivek Wadhwa's recent post on "The Tech Industry's Darkest Secret - It's all about age"

Vivek Wadhwa published this article a couple of days ago and expected the article would provoke anger, outrage and denial. Judging by the comments posted on the article he wasn't far off. (https://www.linkedin.com/today/post/article/20130422020049-8451-the-tech-industry-s-darkest-secret-it-s-all-about-age?trk=prof-post)

I haven't seen the Brown and Linden's analysis to see if there is correlation between the unemployment and age or if the comment regarding unemployment was an inference from the rate of salary increases for a given age group. I presume it was inference since no data on unemployment is quoted in the article.

I am not sure if the tech industry would be so different from the non tech where skillset of the labor force is a factor. The salary premium commanded has to be based on the value and availability of the skillset - a simple factor of demand and supply. We do need to allow for significant inefficiencies as this is not a commodity market place - after all you cannot simply download an employee with a specific skillset from the internet.

I would expect salaries of tech workers to increase dramatically early in the career, or in their 30's as Vivek mentions, since out of school grad's start at a comparatively modest level as their skillsets are not readily deploy-able and it takes time and effort to bring them up to speed with domain knowledge, processes etc. The demand for employees that have been trained and become productive increases exponentially in the first few years and companies have to offer dramatic increases to retain them. You still lose a good percentage of employees in the early years and employers that routinely hire fresh graduates plan for this attrition. It is natural that employees with Ph.D's (and other higher degrees) would demand a higher salary at the beginning of their career as opposed to those with 4 year undergrad degree. One would expect that salaries over a period of time for all employees performing similar roles would gravitate towards the mean. So if you started of with a higher base, you should expect to see your salary increases to slow down and as is the industry norm today, keep pace with inflation. That may explain why Ph.D's see lower increases compared to those with bachelors after age 50.

Youth does have an advantage in start-ups but it is not all about hot skills, stock options and pulling all-nighter's but about availability. That demographic is more likely to have a very short horizon and not attach same amount of importance to health benefits and retirement plans. A typical "non-youth" employee with a family to support is likely to care more about job stability and benefits and less about the stock option lottery.

I would even stick my neck out and talk about a different problem being faced by the tech industry today. The tech industry is not just about Google and Apple but thousands of companies that have been around for tens of years. These industries have existing infrastructure worth billions and most of it is in "not so cool" technologies. These system are not going away anytime soon and are supported by loyal, dedicated and hard working employees who have been around for a while and have no intention of quitting their current job and starting life all over. These employees have the experience and the knowledge in their heads to keep these systems up and running. Replacing these employees with youth and transitioning the knowledge is not going to be easy - I don't think you will have much luck trying to hire "young" COBOL/DB2/CICS programmer - not even if you offered to train them. These outdated skills are as much in demand as the newer technologies and the only probable reason you don't see a lot of action is because these jobs are all taken today and people are dropping off in ones and twos - at least for now.

Having said that, there is no alternative to staying current on newer technologies and trying to move up the ladder. Once you reach the salary mean the only alternative to increasing your compensation is by either changing jobs or getting promoted. We live in a disruptive world. No university can prepare you for the unknown but they can prepare you to expect change - the only constant after all is change!

My thoughts after reading a blog on Employee Recognition Programs

Nice to see CEO's acknowledging that the leading challenge is how to best to develop, engage, motivate, manage, and retain Human Capital. (See blog - CEOs and Employee Recognition Programs, finally hand in hand?). Also agree employees need an environment to thrive and a recognition program to feel appreciated and secure.

I doubt there is any organization out there that would either acknowledge not having an Employee Recognition Program or, possibly even worse,  admitting having one that is not working. If these programs were working, employers would not have to resort to offering a retention bonus to at-risk employees. If you leave aside growth companies like Google and Apple aside, companies are focused on meeting quarterly numbers than real and meaningful long term investment in Human Capital - we are after all in a 7.5+% unemployment economy.

If these programs were really working, there would be no need to put in place retention bonuses for at-risk employees - specially when you realize a valued hard to replace employee is about to quit. I have been in such situations and have often wondered if a retention bonus really made a difference. An employee has nothing to loose by agreeing to a retention agreement and quitting anyway when a nice opportunity comes along. I once tried to convince the organization to turn the retention bonus agreement on its head and to make the payout now rather than the end of the retention period. Lets acknowledge the retention bonus as last ditch effort and increase the incentive to stick around. An employee that breaks such an agreement would have to pay the retention bonus back and even though there may be a small risk that the organization may not recover the money, I believe it is worth taking and using the time to work on how to increase employee retention.