Imagine seeing this press release . . .
Press Release: Thousands are flocking to play Hiring Wars, the hottest new web-based social game. You choose between the Eager Employer, ready to shell out big bucks to new programmers with less than two years’ experience, and the Frustrated Employee with experience and title credits who’s being asked to work perpetual crunch time for a salary well below the “new market” average. Along the way you’ll deal with challenges like Fickle Investors, Giant Competitors, Insatiable Consumers, the twin demons Gamification and Monetization. You’ll seek rare items like the key to the Secret Metrics Scrolls!
You may think that all sounds a little silly but it’s where we are right now in the industry–finding and hiring the best talent as fast as we can to create games as fast as we can in this extremely competitive web-based game market. Isn’t that where we always are, some might ask. The answer is yes . . . and no. Companies should always be looking for the best and the brightest. What’s different now is the speed at which everything is happening.
We’ve gone from “how do we appeal to the mass market?” to “how fast can we get that up on Facebook?”
Casual, Social, Cloud, Web, Downloadable, and Free-to-Play games are what’s hot right now. You don’t need to know the storyline (such as it is) or spend hours leveling up. You don’t need a fancy controller, and you don’t even need to spend any money (although that’s not what the game makers want you to think!) It’s all about web-based-product with a social media component and microtransactions . . . and did I mention speed?
The rapid move toward casual games took many in our industry by surprise and has sent traditional segments like console and MMO-producing companies scrambling to adjust, often by rapid “restructuring” (read: layoffs). Traditional PC and console games take years and millions to build while the initial release of most casual games can be created within 90 days for an average of $30,000.
Hundreds of new media game companies are popping up everywhere, and even the console and MMO companies are trying to re-focus current product, at least to some degree, on Free to Play and more “casual” MMO’s rather than putting all their eggs in the traditional multi-year development cycle basket.
My Kingdom for a Coder
This relatively sudden change has also caused a shift in desired technical skills and forced our industry to compete for talent with the already highly competitive IT, networking & security, Information Services and industries. Sure, you still need artists (and marketing) but now you’re hunting for programmers instead of writers, and hey, if they can knock out some text too, that’s great. In this new world of “rapid deployment and “empowerment,” if the programmers can police their own workflow and bug tickets, so much the better.
According to the Electronic Software Association (ESA), the game industry generates over $25 billion in annual revenue, and employs more than 120,000 people. Current research indicates that by 2015, 60% of the new jobs created in America will require special skills held by only 20% of the population. On top of that, the number of college students enrolled in computer science and information technology majors has declined even though the demand for the talent has increased. The result is that in 2011, Computer Science graduates are receiving an average starting salary of around $98,000. (Yes, there are higher base salaries but they tend to be at the mega-companies like Google and Facebook.) New programmers without degrees or much, if any, real experience are commanding salaries previously reserved for more senior people.
Sadly, this hasn’t necessarily resulted in a company-wide shift upwards in salaries at all levels. Companies think they can maximize profits by laying off current “specialized” employees to get “multi-taskers.” Even at the higher salary, the company figures it’s saving money because it’s paying less than before the layoff. Given the competitive situation and finite supply of qualified talent, it’s the perfect storm to fuel a hiring crisis.
In previous hiring wars we were able to supplement a lack of U.S.-based talent by bringing well-qualified talent from other countries like the U.K., back when the U.S. dollar was strong and UK salaries were lower. It also helped that getting approval for H1B work visas was easier.
In today’s world economic and political climate, not only does the weak US dollar work against us, the process of obtaining a U.S. H1B work visa has gone from simple to torture, and many game companies won’t even consider it. So unless you come from a country operating under the North American Free Trade Agreement (NAFTA), obtaining a U.S. work visa is nearly impossible.
Some, U.S. game companies think they’ll save money by using a small company outside the country. This works more or less until the parent company decides to “restructure” (again) and cuts the smaller foreign company adrift without so much as a Bon Voyage pizza party. Doesn’t do a whole lot for U.S. relations in an already difficult market, and certainly doesn’t do much to bolster investor confidence in the parent company
Pay to Play . . . in the Job Market, That is
With the new business model for generating web-based games, the industry has returned to something of a “garage” mentality. Lured by the desire to create the next Farmville, companies are using variations of Lean Management, AGILE development, and “throw it on the wall ‘n keep what sticks.” Those who can afford it will grudgingly pay the higher salary while those who can’t might offer a range of inducements like stock options and profit-sharing. In some ways, it’s like reminiscent of that crazed time Before the Dot Com Bubble Burst when the perceived potential to generate an endless revenue stream fueled reckless business practices.
Case Study: A client wanted to hire a programmer at a maximum base salary of $120K. After approaching well over 300 candidates via recruiting it became clear that this company wasn’t going to get anyone until it raised the base salary to somewhere around $165K, the current average cost for that particular talent in today’s market. The company wouldn’t upgrade the base salary so the position is still open, months later.
They pushed existing staff to make up for the slack, which created a stressful work environment. Ship dates slipped which wreaked havoc on the revenue stream and meant even MORE crunch time. The already-underpaid employees began job hunting for better pay and freedom from eternal crunch time. The executive staff offered large pre-IPO stock grants but sadly for them, employees and candidates today are much savvier about the business environment and would rather have real cash. They know that they can’t pay their bills with stock options.
In the long run, the company could have done some negotiating on the base salary and saved themselves a lot of money that was wasted on overtime. There was a time when the caché of working for certain “big name” companies outweighed the known downsides but political in-fighting and employee abuse isn’t worth even the big money. Penny wise and pound foolish in this situation, they have earned themselves a reputation that has already come back to haunt them.
As this case proves, not only is it a war to locate and hire talent, it’s a challenge to keep the talent companies have already. The climate is so aggressive that candidates are joining companies only to be lured away a few weeks later by a competitor. Loyalty is nice but in this economy money is what motivates employees.
Lean Mean Overworked Machine
Companies are enamored of the “lean ‘n mean” approach, especially when it comes to engineering departments. Candidates are being asked to do virtual online white-boarding sessions even before the formal interview. At the interview, they are asked to walk through code samples and are subjected to intense questioning to test horsepower, agility, and problem-solving skills. They quickly figure out that the high salary probably comes with a high price tag in be this tough new environment. Shouldn’t a company perform due diligence on new employees? Definitely, but in this case they might as well say, “Hey, we expect you to do everything, do it lightning fast, and oh yeah, sleep under your desk.”
“Empowerment” is a great word, but what does it really mean? It means that you get a chance—sometimes only one chance—to throw your pasta on the wall. If it sticks and people love it, great! You survive to cook up something tomorrow. If it fails (or worse causes other things to fail), you’re outta here!
“We’re paying better than anyone else out there, so what’s their problem?” management asks. It’s hard, if not impossible, to explain that burning through waves of employees (who either quit or work sick until they’re too sick to come to work) can very well mean you’ll end up with a lot less money, no real product, and an incredibly bad reputation touted far and wide on the very social networks you had hoped to conquer.
Less is More, Right?
Since its inception, the game industry has been known to pay lower base salaries with the justification that unlike traditional business, working in the game industry is just too cool, and everyone will make lots of money from all those AAA games. In the early 90s it was common for companies to assign significant royalties which made up, at least in part, for the low salaries and long hours.
Then game companies moved from the garage to multi-story office buildings and spacious campuses, and royalty programs morphed into “bonus programs” with all sorts of caveats and qualifications that didn’t pay out as well. In the end, although the sodas and snacks might be free, base salaries remained lower than in other industries seeking the same skills.
In the last three years, over 10,000 employees have lost their job in our industry. Although the economic crisis is usually the excuse for this, several other factors at work as well:
1) The rapid and steady advancement of technology. One day your skills are in high demand and literally within months you can be perceived as obsolete or unqualified (especially if you make the mistake of getting older.) Nowadays, the older you are and the more experience you have, the harder it is for you to find a good job. Companies don’t seem realize they’re sending a mixed message here: “Sure, New Kid, we’ll pay you $98,000 to start” vs. “Hm, (Older) Person with tons of experience, you’re probably going to be too expensive, and besides you’re not cool.”
2) The rise of new game industry market segments. These new entities (Casual / Social Gaming, Cloud-based Gaming, Browser / Web based gaming, even the industry’s move towards digital distribution and downloadable games) seem to spring up overnight on little or no money. Established companies see this and figure that they don’t have to spend any money to jump into the mix.
3) The normal changes. Hardware platforms, software sales, hot new things, whatever Marketing thinks a game Has to Have, budgets, investors, and of course the constant specter of the Economy.
1) The game industry is now squarely in the midst of a hiring war. We’re competing for the same talent many other software segments seek.
2) Game companies can no longer attract quality talent with lower salaries and the vaporware offer of a stock option to cover the difference. Candidates are savvy and don’t care about your stock unless you’ve got a proven track record (i.e., Google, Facebook, Apple.) It’s “show me the money now!”
3) The “glamour” of working for a game company is beginning to wane now that just about anyone can put a company together and say they’re in the industry. While it’s exciting to be part of a start-up, the lure of independence and “unlimited profit” is often replaced very quickly by long hours, exhaustion, and the need to provide your own soda.
4) Candidates would rather leave the game industry than compromise on life / work balance issues. People want to be paid fairly and work a 40-hour week instead of being underpaid (often dramatically so) and working on average 60 hours.
5) With the average salary for a programmer fresh out of college at around $98K, companies need to look at their entire salary structure and adjust accordingly. Otherwise, they’ll have a tough time attracting new talent or even retaining existing staff, especially if they’ve shifted into Eternal Crunch Time.
6) Hiring limited-experience talent just because they’ve worked on one Facebook game isn’t necessarily good planning (or even planning at all!) Seasoned professionals who have tackled game creation on several platforms with multiple genres and demonstrated the ability to learn new stuff are usually a better investment in the long run. It’s hard not to be attracted by the promise of big profits but you still need to have a solid foundation with experienced talent to survive. This doesn’t mean you shouldn’t consider hiring a young inexperienced person who obviously has a flair for game design but don’t underestimate the ability of your experienced employees to create fresh, engaging content.