By Sharon Fisher | March 1, 2022
Between the Great Resignation, the work-from-anywhere world brought to us by COVID-19, the housing bubble, and the booming economy, Idaho companies are facing sticker shock when it comes to hiring new employees.
COVID put a damper on hiring, but that’s over, said Allison Bruce, partner and vice president of marketing for TalentSpark, a Boise-based recruiting agency, with businesses continuing to grow and employees leaving or retiring. So now there’s a hiring backlog. “We have had more job requests from companies in December and January for software engineers than we had in the 18 months prior,” she said. “70% of the people who reach out to us are looking for some sort of tech help, particularly in the software engineering space.”
That’s put pressure on salaries. Idaho operated under a geographic advantage for a long time because it was so isolated and had historically low pay rates because it didn’t have to compete with any other market, Bruce said. “Over the past five years, they’ve had to compete more regionally and nationally, and that’s accelerated with COVID,” she said. “Now that everyone has the option to work for companies based anywhere in the United States, companies have had to do a lot of catchup, particularly around pay practices.”
“I don’t know that our local company wages have caught up here,” agreed Alison Johnson, a partner with Palo Alto, California-based Wilson Sonsini Goodrich & Rosati, who works in Boise. Workers have opportunities they didn’t have just a few years ago because the workforce has changed and is more distributed, she said. “People can continue to work for the Microsofts of the world, or the Googles of the world, and other companies based in larger cities, and markets that have a larger salary scale. Idaho employers need to find a way to distinguish why and how they can attract talent in a market that’s becoming increasingly competitive.”
How much is competitive? “There’s a lot of competition for talent around the $90,000 mark,” Bruce said. “If they can get themselves to $95,000, $100,000, over $100,000, they start to have a pay differential from the bulk of the positions. It’s challenging to hire for that skillset between $75,000 and $85,000. People are already making that and are not willing to make changes.”
At the same time, Idaho tech companies have to remember their existing employees as well. “You can’t just bring in new hires at 30% to 40% higher than the current workforce,” Bruce warned.
“Over the past five years, they’ve had to compete more regionally and nationally, and that’s accelerated with COVID. Now that everyone has the option to work for companies based anywhere in the United States, companies have had to do a lot of catchup, particularly around pay practices.”
— ALLISON BRUCE, TALENTSPARK
How can Idaho companies compete?
One way that companies are responding is developing a pipeline, Bruce said. “Instead of trying to hire all senior technologists, they’re starting to hire entry-level college students and develop them forward,” she said. “It’s a longer-term investment.”
COVID-19 also gave existing Idaho tech workers more flexibility. At Clearwater Analytics, after COVID-19, 40% of the company’s employees left for fully remote positions, sometimes with salary increases of 30% or more, James Price, chief quality officer, told attendees of the Idaho Technology Council’s develop.idaho conference.
Idaho’s tech companies need to accept that this is the new reality, Price said. “Buildings are a sunk cost,” he said, warning companies not to make employees come into an office just to spend the day in Zoom meetings. Instead, equip a reasonable office for them at home, and let your best people do what they do best: write code, he said.
“We’ve struggled to recruit for anyone who requires five days in the office,” Bruce agreed. “They’re not really interested regardless of how it pays.” Employees are looking for autonomy and the ability to manage their own schedule, she said.
How else to attract and retain employees? Some are particularly interested in opportunities for advancement, such as employers paying for an education reimbursement so an employee can get a degree, Bruce said. “For some younger staffers, daycare is a real issue,” and companies can either provide on-site daycare or help employees find or pay for daycare, she said.
But Idaho employees who do take remote jobs with companies out of state need to be prepared for the inevitable downturn, Price said. He ticked off a list of Idaho-based companies acquired by out-of-state firms, such as Extended Systems, Balihoo, and Microsoft, that eventually told employees they had to move to the mother ship or find another job.
That happens when attrition at the satellite office creeps up, its connection to headquarters is weakened, and the parent company is looking to cut costs, Price said. “A handful of linchpin employees leave, and the magic is lost,” he said.
“Remote employees are second-class citizens,” Price warned. Remote staffers miss out on the camaraderie of working in a physical location, as well as opportunities for mentoring, coaching and promotion. “You’re the first one let go when there’s a hiccup,” he said, and with rising interest rates, such a hiccup might be approaching.
“Be the remote employee who’s prepared,” Price said. “Sign up for hard projects. Turn your camera on, comb your hair, and get out of your pajamas.”
How Idaho tech companies are responding
Idaho’s tech companies are dealing with this new normal. Cradlepoint, which was bought by Ericsson in 2020 for $1.1 billion, has opened up its talent pool to remote workers, even positions that had traditionally been based in Boise, said Jennifer Erfurth, chief people officer. She is herself based in San Jose, Calif., though the company’s headquarters continues to be in Boise.
Cradlepoint now has to compete for workers nationally, Erfurth said. “With the new world, anyone in Boise can work anywhere in the United States,” she said. “So when we look at our competition, we look at the national average, not just Boise.” Consequently, the company has upped its pay ranges, though she admits the company isn’t there yet. “We’re a little behind, but it’s the #1 focus of the CEO and the leadership team,” she said. Moreover, employees hired in regions with salary ranges higher than the average get a boost, she said. “Anyone hired in California may see an adjustment, just to hit the market,” she said.
When Ericsson purchased the company, it had around 650 employees, 465 of whom were in Boise, Erfurth said. Now, the company has 1,200 employees, 529 of whom are in Boise, she said, adding that it has about 90 job openings.
Jennifer Erfurth, Chief people officer at Cradlepoint. Photo courtesy Jennifer Erfurth.
The company, which used to have just two recruiters, now has a talent acquisition team with a leader and recruiters in the Americas; Europe, Middle East, and Africa; and Asia-Pacific regions, Erfurth said. In addition, the company has a staffer specifically assigned to emerging talent who works with the Boise schools and universities, and a leader specifically focused on diversity, equity, inclusion, and belonging. “That’s the key – you want to feel like you belong in our culture, be your authentic self, and do your best work,” she said.
Cradlepoint recently started an internship program, hiring 40 interns in India to go with the tech center it established there last June, and offering an internship program this summer in the United States, Erfurth said. “We’re really going to kick off emerging talent program in the fall,” she said.
One advantage Cradlepoint has is its company culture, Erfurth said. “We get a lot of referrals, people who say, ‘hey, come work here, it’s a great place to work,’” she said. And for some roles, such as tech support specialists and enterprise support engineers, the company will consider hiring people who are self-taught or have been through a boot camp rather than having a traditional computer science degree. “It depends on the role,” she said.
Part of the new normal is recognizing the flexibility employees now want, Erfurth said. “It’s never going to be ‘return to work,’” she said. “If they want to come in the office, it’s open and available.” The company is considering how to allocate office space; employees who come to work three days or more a week may get their own space while employees who come in fewer days may get shared space instead, she said.
In addition, Cradlepoint is adding to its office space in the office building across the street from its Boise headquarters and is constructing the space with today’s work standards in mind. “As we design our offices, we’re putting in hoteling space and collaboration space,” she said. “They’re not coming in to sit at a cubicle – they’re coming in to interact with other employees.”
Increasing Idaho’s computer science graduate pipeline
One solution is to increase the number of computer science graduates that Idaho produces. But that’s easier said than done, said Amit Jain, chair of the computer science department at Boise State University (BSU).
With the help of funding from the state, BSU made a big investment about a decade ago to beef up its computer science department, Jain said. “We went from eight faculty in 2013 to 26 and went from graduating 25 students a year to about 120 a year,” he said, about 100 of whom received bachelor’s degrees and the remainder master’s and doctoral degrees. “We also created a PhD program, because you can’t create top faculty if they can’t do research.” Created in 2016, it’s now the biggest PhD program on campus, he said. “On an academic scale, that’s a very short period.”
“If we don’t do this, we’re going to be left behind.”
— AMIT JAIN, CHAIR OF BOISE STATE UNIVERSITY COMPUTER SCIENCE DEPT.
But industry’s goal is that BSU should graduate 200 students a year, Jain said. And while the University of Idaho and Idaho State University also have computer science programs, theirs are smaller, he said. Even if all three universities each produced 100 graduates a year, that wouldn’t be enough, he said, noting that Utah produces more than 1,000 computer science graduates a year.
While the long-term plan is for BSU to produce 200 computer science graduates a year, it’s going to take another big investment, Jain said. “It’ll take another 30 faculty to get there,” he said, explaining that computer science requires a 1:5 faculty-student ratio. “Computer science faculty are going to be the most expensive to hire,” though they’re willing to come for as little as half what they could be making in industry because they like the academic life, he said. But he has to keep the salaries close enough to those in industry to retain those hires, he said. A single lifelong endowed position would take about $1.5 million, he said.
And that’s not all. “We’ve also maxed out our space,” Jain said. The department would need additional offices, classrooms, and research labs. “To grow would require some concerted effort from the state and university and industry,” he said.
Moreover, computer science doesn’t operate in a vacuum. BSU also has to grow engineering programs such as computer hardware, robotics, electrical engineering, and even medicine, Jain said. “Engineering has to grow across the state,” he said, noting that Utah spent $100 million to expand its engineering program. “I’m pretty sure Utah isn’t 100 times richer than us.”
If this is something industry wants, it needs to speak up, Jain said. “They’re the ones creating the jobs,” he said. “They have to make the case to the state.” And it’s not a hard case to make, he said, noting that for every computer science graduate who is hired, there’s three to five supporting jobs to go along with it.
To be fair, it’s not like the legislature has turned BSU down for the funding, Jain said. But the state needs to develop a plan to cover the next 10 to 20 years. “If we don’t do this, we’re going to be left behind,” he said.