Article
December 2012
Consider this: Amazon, Apple, Facebook, Google, and Microsoft—all tech companies—represent over $7 trillion in market capitalization. That’s more than the GDP of every country except United States and China.
The fact that tech companies are the giants of our global economy and that software is what makes most businesses work has shifted the scenery in the world of human capital.
Where do people fit in this new landscape?
Revenue per employee is higher than ever. At Facebook, that number is $1.6 million; at Apple, revenue per employee is $1.9M, and at Netflix, that number is a whopping $2.3M. That means every single employee at Netflix is feeling the pressure to perform up to their market valuation. As the fully burdened cost of each employee goes up, productivity expectations are higher than ever, given the ever-evolving technology. This scenario requires the hiring of top talent to manage deliverables for professional and highly technical work.
Yet despite high levels of unemployment, some of the top positions at such companies are hard to fill. The expectations of employers are understandably high, and the qualifications necessary to do these jobs are still, after 30+ years of the burgeoning of a software-driven economy, not widely discoverable among the people seeking jobs.
In his iconic and seemingly timeless essay from 2011 called “Why Software Is Eating the World,” Marc Andreessen wrote something important that holds true today: “Many people in the U.S. and around the world lack the education and skills required to participate in the great new companies coming out of the software revolution.” He goes on to mention that in 2011 these companies are “starved for talent.” I suggest that this is still the case.
The only way to the other side of this problem is through education. Despite the fact that we’ve been living in a world of technology for decades, our educational system does not seem to be preparing candidates to meet the high-level demands at tech companies, a burgeoning sector of employers. The Beveridge curve is what economists have traditionally used to measure the relationship between demand (job openings rate) and supply (unemployment rate). In our current situation, the number of people available for low-level jobs is high, whereas the pool of qualified labor for higher-level job openings is much smaller. In our software-driven world, the algorithm no longer provides a simple equivalency between unemployment rates and job opportunities.
This trend reflects a problem with relevancy. Too many people have missed the memo and are easily trapped by the belief that “what worked in the past will work in the future.” It’s a concept that parents have erroneously burdened their children with—that “I could do it when I was your age” idea that is just not true. Just as college kids can’t pay off their student debts in 5 years anymore or bartend part-time to pay tuition bills, those same kids, when they enter the job market pipeline, will, we hope, realize that their parents’ analog approach to life won’t cut it in our super-tech-driven world.
On the flip side of that awareness is the fact that many people working in current industries may find themselves stranded on the wrong side of history, never able to work in their fields again.
Those high-level managers who supervise teams, however small or large, are responsible for ensuring that the talent they hire and mentor stays on top of technology and software trends. That means the managers have to be on top of it, too, in a big way, by constantly evaluating tech evolution and implementing creative solutions as needed to stay relevant in the marketplace.
Some things never change. To quote Marc Andreessen again: “New companies need to prove their worth. They need to build strong cultures, delight their customers, establish their own competitive advantages.” That is as true now as it was in 2011 when he wrote those words, and as it was in 1953 when the first McDonalds opened, and in 1904 when the first Model A kicked off an automotive empire.
But nowadays, all of that needs to be done in high-growth, software-driven businesses by talent that is up to the task. Managers need to stay diligent by always looking for new ways to conduct business and deliver value to customers. They need to look for whatever process improvements will give them the edge, reduce friction, and provide the time to complete tasks well—like the assembly line of the early 20th century, only today it is the next ground-breaking technological triumph of the 2020s.
The good news is that tech is creating more opportunities all the time. As companies grow, they must invest in talent that can operate at a high level in their software-driven environment. Even though the pressure to perform is intense, so are the rewards for those who perform well, for they will be essential to a business with limitless potential.