TALENT MANAGEMENT: Can Yahoo still attract tech workers?

In many fields, workers practically beg employers to hire them, but in information technology, demand for talent often exceeds supply. Employers struggle to attract and keep software experts, always concerned about the risk of their best employees leaving for a better offer elsewhere. For a high-tech worker, what often equates to a better offer is the opportunity to be part of something new and exciting, whatever that may be.

That presents a challenge for Yahoo. A couple of decades ago, the web search company (now an advertising, news and email company) was one of the hottest businesses in the Internet age. Today, Yahoo's sites attract 700 million visitors a month and the company's 14,000 employees are well paid, but the excitement is gone. For the industry, Yahoo is part of the old Internet. The best and brightest want to be part of the new Internet, especially social media, cloud computing, and mobile apps.

In that environment, Yahoo is looking for paths to growth even as some of its best talent is slipping away. Greg Cohn, who rose from business strategist to senior director responsible for new initiatives, admires Yahoo's management, but left to start his own business. He also left Yahoo's vice president of operations in Latin America, as did the company's chief trust officer, who moved on to a position at Google. In another sign of employee dissatisfaction, one recruiter told a reporter, “If you call nine people at Yahoo, they'll call you nine back.” In other words, leaving sounds like an option for almost everyone. Executives are preparing for a faster exodus as job growth picks up elsewhere in Silicon Valley. Because of these trends, Yahoo predicts it will need to do some intensive recruiting. But how do you get people to think about working for a company that many believe is past its prime? Yahoo definitely has work to do. Software engineers looking for employee reviews on Glassdoor.com would notice that employees rate Yahoo only a 3.2 on a scale of 1 to 5, behind Facebook (4.2), Google (3.9), and Apple (3.6). Seeing that, an engineer probably wouldn't bother looking for a Yahoo careers page.

One person contributing to a solution is Susan Burnett, senior vice president of talent and organizational development at Yahoo. Burnett aims to create an environment where employees gain the skills they need to take on greater responsibilities. Burnett first established a development program for 2,000 high-potential employees. The program, called Leading Yahoos, teaches leadership, goal setting and measuring results. By helping these new leaders align their work with the company's overall strategy, she supports Yahoo's effort to make goals more visible to employees at all levels.

More directly, Yahoo seeks to find highly qualified software experts by hiring outside of Silicon Valley, where competition for talent is intense. For example, it worked with the Champaign County Economic Development Corporation to announce that it wanted to hire software developers to work at the University of Illinois Research Park. Yahoo said it had six to nine open positions, but would consider hiring more if it received enough good applications. The company's advertising noted that it paid above-average salaries for the research park and that the Champaign facility was innovative and had filed patents for 25 ideas.

Observers point out that Yahoo still makes most of its money by employing reporters to write stories and salespeople to sell ads, a type of old-media operation that is difficult to run profitably. Yahoo outsourced web search to Microsoft's Bing, and despite its leading role in advertising, it still has a lot to offer in the hot, young market for mobile ads. Moving from unprofitable, low-growth activities to activities with more potential could lead to significant staff cuts in some areas, even as hiring momentum continues in others. Still, one former employee sees hope. Geoff Ralston, who worked at Yahoo Mail, points out that EBay and Apple survived periods when they seemed to be disappearing. Ralston believes the solution is to buy or create "consumer experiences that are incredibly cool." That's a mission a tech worker would choose to accept.

Questions

1. What conclusions can you draw about labor supply and demand at Yahoo?

2. What actions could Yahoo take to strengthen its internal recruiting? How could these efforts support Yahoo's corporate strategy?

3. If you were responsible for college recruiting at Yahoo, where would you recruit and what would you say? Because?