Netflix’s staff: Higher, bigger.
Netflix touts its hiring practices in a Wall Street Journal Online article today:
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.”
Netflix and other tech-bust survivors helped make 2005 the first time in fours years that overall employment in Silicon Valley grew.
The article continues:
The shift highlights how Silicon Valley is working to establish a competitive advantage, as lower-cost geographic rivals chip away at its strongholds. The Silicon Valley region has taken the tack of moving up the skills curve before: As competition in chip making became more heated in the 1970s, Silicon Valley chip makers relocated their assembly and manufacturing overseas but retained their core design facilities in the region. Today these chip makers, such as Intel Corp., remain dominant.
Silicon Valley’s changing employment makeup does have its downside. Wages are once again creeping up, making it more expensive to do business in the already pricey area. Average annual pay in Silicon Valley hit $69,455 in 2005, up 2.7% from 2004, though it remains below the heights of the average $80,000-plus that the region’s workers earned in 2000, according to Joint Venture Silicon Valley.
What’s more, as operations and lower-skill tech jobs leave the region, Silicon Valley has a narrower base of industries. That makes the area more vulnerable should another downturn occur, says Steve Levy, an economist at the Center for the Continuing Study of the California Economy in Palo Alto, Calif. “Los Angeles has a far more diverse economic base, with Hollywood, biotechnology, plastics and toys,” says Mr. Levy. “But high-skill tech is all we’re left with.”