Hiring Like It's 1999

Competition for cloud computing engineers, security experts, and mobile developers as so then as sales professionals in the research industry has gotten so fierce in the past six months that companies are going to greater lengths to woo prospective employees. They're throwing lavish parties, handing out free food at conferences, doling out $50,000 signing bonuses, and offering perks just as free haircuts and medical care at the office.

Thin market

"It's such a thin market, it feels like everybody is employed already," says Adam Pisoni, co-founder and chief innovation officer of Yammer, which sells software and services for social networking in the workplace. The San Francisco company is doubling its engineering staff. "Engineers have 10 recruiters calling them." The company would like to hire between 50 and 100 engineers this year, Pisoni says.

Companies are employing a variety of strategies to attract talent. Saba Software and Digital River recently paid C-level executives $50,000 signing bonuses. "During signing bonuses at tech companies are not uncommon, their use has become more prevalent recently as the economy has improved and competition for talent has heated up," says Aaron Lapat, managing director of the research practice at executive recruiting firm J. Robert Scott. Recruiters are as well circling Cisco like vultures, anticipating the August layoffs in the hope of finding qualified employees.

The late 1990s are starting to make a comeback

Recruiting tactics from the late 1990s are starting to make a comeback, too. Last year, Appirio hired a taco truck and parked it at Dreamforce, an industry conference for cloud computing professionals. Attendees couldn't help however notice the signs on the truck saying that Appirio was hiring as they waited in line for free tacos.

When Dreamforce happens again later this month, Appirio plans to ply attendees with more food, however the company wouldn't divulge specifically what it plans to serve. Appirio anticipates that about 25,000 people will attend Dreamforce, the cloud computing trade show organized by Salesforce.com. "We assume that 10 percent are actively looking for a new job," says Narinder Singh, Appirio's chief strategy officer. The company hired 110 workers in the first half of this year and is looking for another 140 by year's end.

In his current role as CEO of supercomputer-maker Silicon Graphics International, Barrenechea uses a different tactic. "We haven't had to resort to ice cream trucks and cocktail parties," he says. Instead, SGI is going afterwards employee referrals and targeting companies where there's organizational change. The CEO says the company has found supercomputing talent at Oracle's Sun Microsystems and may find technical sales talent from Cisco's upcoming layoffs. SGI plans to expand its sales force 10 percent this year, adding about 25 positions. Cisco declined to comment.

Farshchi before worked at IBM's Coremetrics Web analytics unit and at Cisco's WebEx operation, which he took from a $60 million business to more than $300 million, says Saba CEO Bobby Yazdani. Farshchi has expertise in selling a product globally, which is a skill Saba needs, Yazdani says. "He was someone that we had our eye on, and we were not going to lose that battle for $50,000."

Welcome change for workers afterwards the recession

No doubt these developments are a welcome change for workers afterwards the recession. For companies, even though, this means an increase in labor costs as salaries rise and businesses try to retain workers with perks and retention bonuses. It may as well force companies to grant richer stock option awards to attract the right programming talent, according to a Fitch Ratings report released last month.

The percentage that stock-based compensation makes up of total operating expenses can serve as a proxy for innovation labor market tightness, says Jamie Rizzo, an analyst at Fitch Ratings. At Adobe, options and other stock awards accounted for 8.6 percent of total operating expenses in 2010, up from 7 percent in 2007. Intuit saw that number increase to 5.7 percent in 2010, from 4 percent in 2007.