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Businesses Software United States

The New Corporate Recruitment Pool: Workers In Dead-End Jobs (msn.com) 207

Posted by BeauHD from the business-tactics dept.
New submitter cdreimer writes: According a report from The Wall Street Journal (Warning: source may be paywalled, alternative source), corporations looking to hire new employees are opening offices in cities with high concentration of workers in dead-end jobs who are reluctant to locate but are cheaper to hire than competing locally in tight labor markets. From the report: "Pressed for workers, a New Jersey-based software company went hunting for a U.S. city with a surplus of talented employees stuck in dead-end jobs. Brian Brown, chief operating officer at AvePoint, Inc., struck gold in Richmond. Despite the city's low unemployment rate, the company had no trouble filling 70 jobs there, some at 20% below what it paid in New Jersey. New hires, meanwhile, got more interesting work and healthy raises. Irvine, Calif.-based mortgage lender Network Capital Funding Corp. opened an office in Miami to scoop up an attractive subset of college graduates -- those who settled for tolerable jobs in exchange for living in a city they loved. 'They were not in real careers,' said Tri Nguyen, Network Capital chief executive. He now plans a similar expansion in Philadelphia. Americans have traditionally moved to find jobs. But with a growing reluctance by workers to relocate, some companies have decided to move closer to potential hires. Firms are expanding to cities with a bounty of underemployed, retrieving men and women from freelance gigs, manual labor and part-time jobs with duties that, one worker said, required only a heartbeat to perform. With the national jobless rate near a 16-year low, these pockets of underemployment are a wellspring for companies that recognize most new hires already have jobs but can be poached with better pay and room for advancement. That's preferable to competing for higher-priced workers at home in a tight labor market."
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The New Corporate Recruitment Pool: Workers In Dead-End Jobs More

The New Corporate Recruitment Pool: Workers In Dead-End Jobs

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  • Whodathunkit? (Score:5, Interesting)

    by RightwingNutjob ( 1302813 ) on Monday September 11, 2017 @07:54PM (#55178099)
    Capitalism and the free market actually work.

    • Re:Whodathunkit? (Score:5, Interesting)

      by SQLGuru ( 980662 ) on Monday September 11, 2017 @08:08PM (#55178165) Homepage Journal

      I'm much more in favor of them opening satellite offices in locales where there are skilled workers in dead-end jobs than claiming a shortage of skilled workers and shipping them overseas. We (those in the industry) have been saying for a while that there isn't a skill shortage but corporations have used it as a way to cut costs.....in reality, moving to cheaper regions of the country instead of Silicon Valley or New York City mean you can pay less and still be a top paying employer.....plus, the rent/property costs are much lower, too. You can probably even get some nice incentives from the local government because they see it as an opportunity for growth.

      • Re:Whodathunkit? (Score:4, Interesting)

        by alvinrod ( 889928 ) on Monday September 11, 2017 @08:38PM (#55178331)
        Well there is a skill shortage for the rates that companies would like to pay. However, from a market perspective the best way to get more skilled employees is to increase wages as it will increase the number of talented people who could work as programmers but make other career choices because they do not find the salary good enough to dissuade them from making other career choices. Trying to drive down wages is just going to result in more people who could be talent programmers choosing other career paths for much the same reasons.

        • Re:Whodathunkit? (Score:4, Interesting)

          by ShanghaiBill ( 739463 ) on Monday September 11, 2017 @09:26PM (#55178547)

          Well there is a skill shortage for the rates that companies would like to pay.

          My company has a hard time finding people before we even discuss salary. Once we find someone qualified, the salary offered is almost never a problem. I have seen zero evidence that there is a vast pool of qualified techs sitting on the sidelines, waiting for salaries to go up.

          the number of talented people who could work as programmers but make other career choices because they do not find the salary good enough

          We pay fresh grads with a BS in CS an average of $90k to start. What other career choice offers a starting salary anywhere near that for a 4 year degree?

          • Re:Whodathunkit? (Score:5, Insightful)

            by alvinrod ( 889928 ) on Monday September 11, 2017 @10:31PM (#55178747)

            I have seen zero evidence that there is a vast pool of qualified techs sitting on the sidelines, waiting for salaries to go up.

            It's not that people are sitting on the sidelines who are already in tech, it's that there are people who are capable of doing programming jobs but are choosing to go into a different career path, perhaps electrical engineering, physics, math, or plenty of other disciplines. You can't argue that if the salary for tech jobs rose $20k across the board that none of those young people would reconsider and choose to study computer science instead.

            We pay fresh grads with a BS in CS an average of $90k to start.

            That sounds really, really good if your company is in the midwest, but absolute shit if you're in silicon valley. It's not always just a question of money either. People place a certain amount of value on where a job enables them to live, what kind of hours they are expected to work, or even the nature of the work. For example, I could make a lot more money if I were working in the medical field, but I wouldn't do that work for the prevailing wage because I really don't want to deal with sick people all day long. There are other people who find a lot of fulfillment in jobs that work with people despite low pay. I can't imagine there are many social workers who are doing it to get rich.

            I suspect that there are a sizable number of programmers that are in the profession not because they have a strong passion for it, but precisely because the field generally does pay better. There's probably a pretty wide pool of people that can do code-monkey work, but there are a lot of programming jobs that require strong problem solving abilities and that kind of work may be outside of the capabilities of a large part of the labor pool and there are probably many who are capable, but have no interest in that kind of work. The problem is that employers want more programmers still and that means even higher wages are necessary to sway groups of people who were not previously swayed by the allure of better pay. I don't see the H1B program expanding much under Trump, so there isn't much ability to continue to hold down wages through cheaper foreign labor. I think enough companies have been burned by outsourcing that they're more willing to increase local wages than offshore anything that isn't viewed as low level work.

            • I have seen zero evidence that there is a vast pool of qualified techs sitting on the sidelines, waiting for salaries to go up.

              It's not that people are sitting on the sidelines who are already in tech, it's that there are people who are capable of doing programming jobs but are choosing to go into a different career path, perhaps electrical engineering, physics, math, or plenty of other disciplines. You can't argue that if the salary for tech jobs rose $20k across the board that none of those young people would reconsider and choose to study computer science instead.

              ...and end up with having to outsource the other jobs you had mentioned.

              TFS says "With the national jobless rate near a 16-year low" - which means there's a shortage of people overall. If the IT tech suffers from that, raise salaries, you say. OK, then the shortage moves around from one job area to another, but the fact remains: someone, somewhere, would end up having to outsource.

              • TFS says "With the national jobless rate near a 16-year low" - which means there's a shortage of people overall. If the IT tech suffers from that, raise salaries, you say. OK, then the shortage moves around from one job area to another, but the fact remains: someone, somewhere, would end up having to outsource.

                Well, TFS is wrong about the jobless rate being near a 16-year low b/c it's incorrectly calculated. We're still not generating enough jobs month-to-month (even with the improvement since the elections last November) to bring down the unemployment rate; so the calculated rate is crap b/c it's ignoring all the people that left the job market b/c the job market sucked and still generally does. Once you account for the labor participation rate being near a 50 year low, the unemployment rate ends up being near a

            • Instead of outsourcing 12 hours away in India, try doing it 0-3 hours away to a place with the same language and similar culture. Makes sense to me.

          • Re: (Score:1)

            by Anonymous Coward

            Websites that track these things claim that the average starting salary for programmers in Austin is about $60k. If you're paying a 50% premium over a reasonable market for programmers, and you're having trouble, you're doing this wrong. Either you're looking in the wrong locations, have crap company culture, have incompetent recruiters, or have a very peculiar definition of "qualified."

            • > or have a very peculiar definition of "qualified."

              I'd argue that half the problem is that some employers get the idea that they need to interview developers like Google or Amazon for roles that may not need that level of detail. In other words, if you're just updating business rules in a CRUD based web app using any of the standard libraries, I don't know if asking candidates to code a binary tree on a whiteboard is the best test of whether or not someone would be able to do the job effectively. Ev

          • Which company is this? ;)

          • Re: (Score:2)

            by bazorg ( 911295 )

            We pay fresh grads with a BS in CS an average of $90k to start. What other career choice offers a starting salary anywhere near that for a 4 year degree?

            I don't know... tell us more!
            How do you feel about making that sort of offer to people who live in the UK (or in a similar timezone)?

          • Making $90,000 sounds like a lot of money until you try to live in one of those high cost cities. So tossing the salary part without the geography isn't very informative. That salary in one of the poor countries in the world would allow you to live like a king. In San Francisco, not so much.

          • Re: (Score:2)

            by Qzukk ( 229616 )

            has a hard time finding people before we even discuss salary. Once we find someone qualified

            Obviously your company's HR department messed up and hired underqualified telepaths. How do you expect people to psychically know that you have openings available and are willing to pay competitive rates if you aren't discussing that?

            I have seen zero evidence that there is a vast pool of qualified techs sitting on the sidelines

            With "the national jobless rate near a 16-year low" nobody's "sitting on the sidelines" ex

            • I agree with this, I'd like to see the job posting, salary/benefits, location and the hiring process/interview questions. My hunch is that there is a mismatch between job expectations/salary and what actually exists in reality.

        • Re: (Score:2)

          by Bengie ( 1121981 )
          Talent doesn't follow money, it follows opportunity, which is correlated with money. If you think increasing the wages increases talent, you're waaaayyy off. I've seen companies paying talent nearly $1mil/year to work remotely, and lost them when they took the fun out of work. Later that person turns up working for $100k in some start-up.

      • Re:Whodathunkit? (Score:4, Interesting)

        by knightghost ( 861069 ) on Monday September 11, 2017 @08:57PM (#55178431)

        Satellite offices aren't new, they are something that have been being shut down for the last 10-15 years as employers pull everyone into their hives. I'm watching one do it now in my city while another bought out a local company and is using it to triple employees and expand.

        I've been to a couple dozen cities with better average talent than SV and willing to work for half the salary. Perfect english, same or similar time zones, and a short flight away if you need them in person.

        • Re: (Score:1)

          by Anonymous Coward

          Bingo

          The only satellite offices I see these days are to support sales staff. It used to be that there were satellite offices for production. I wrote software in a satellite office that was actually larger than the home office; because, software development is cheaper in Houston than Silicon Valley

          In the last decade, it was "decided" that the Houston sales team could be let go to consolidate operations with another sales team. It was no surprise to Houston when the new sales team didn't meet the previous

    • Re: (Score:1)

      by Anonymous Coward

      slavery is also capitalism....

    • each and every one of these businesses will get sweetheart deals with massive subsidies that pay for the wages and land paid for by bonds taken out against the taxpayer's future earnings. What was that old quote? "Capitalism for the poor and socialism for the rich"...
    • AvePoint.. why have I never heard of AvePoint? Perhaps for the same reason I won't remember who they were two minutes from now. That's great that they found budget workers in a city that has almost nothing going for it outside of soccer moms yelling "hi ya'll" out their SUV windows. Seriously. They went to Richmond to hire dead end workers just so that they could move them from one dead end job to another. People that have drive go places where other people have drive.

    • A stopped clock is right twice a day.

    • Capitalism and the free market actually work.

      Well, strictly speaking it is "Parts of capitalism and the free market actually work - sometimes". Just like "Parts of socialism and market regulation actually work, sometimes". It is delusional to think that there is one and only one optimal way running the world, which will work universally across time and space. Socialism sums up quite neatly what society is all about: the sharing of things that are beneficial to everybody, the equality of rights etc. Capitalism represents what motivates the individual.

  • I had to get halfway through TFA before I realized that they weren't talking about Richmond, British Columbia. Or Richmond California, Indiana, Kentucky, Ohio or Oregon. Who knew there was a town called Richmond in Virginia?

    • Who knew there was a town called Richmond in Virginia?

      It is the state capitol, the former capitol of the CSA, and the focal point for much of the eastern theater of the civil war. Hardly an obscure city.

      • As a Canadian... Richmond, VA is the only Richmond in the USA that impinges on my awareness at all. I would definitely need to be told if it were a different city from that one.

        If I was reading this story on a site that wasn't heavily American by demographics I'd assume Richmond, BC until I read something indicating otherwise... like the summary that says, "a New Jersey-based software company went hunting for a U.S. city". I mean... that's at least two dead giveaways, right?

        • Re: (Score:1)

          by Anonymous Coward

          I'd assume the suburb of London myself, which all the others were named after.

    • Richmond is in the same state as Springfield.

    • Re: (Score:2)

      by skam240 ( 789197 )

      Sorry but as an American who lives in California within an hours drive of our own state's Richmond the first thing I think of when I hear "Richmond" is "Virginia". As for Richmond BC, if you're Canadian I certainly get it, if you're American, WTF? Whether you're an American or not you truly have a bizarre sense of geography if you really did know of all of those other Richmonds and not the one in Virginia.

  • I am surprised it's young people (Score:5, Insightful)

    by Baron_Yam ( 643147 ) on Monday September 11, 2017 @08:06PM (#55178147)

    > Network Capital Funding Corp. opened an office in Miami to scoop up an attractive subset of college graduates -- those who settled for tolerable jobs in exchange for living in a city they loved

    Honestly, my reluctance to relocate (which I've overcome a couple of times) is more related to how far I'd have to move from my ageing parents or how far I'd be pulling my kids from their social network.

    When I was younger (and my parents were too!) and unmarried, I frequently considered moving elsewhere in the Empire for a good job. Now though? These roots aren't pulling up again until my parents have died and my kids have moved out, at a minimum.

    There's no real shortage of nice places to live, but there's a massive shortage of places to live near my folks and my kids' friends.

    • Re:I am surprised it's young people (Score:4, Interesting)

      by Proudrooster ( 580120 ) on Monday September 11, 2017 @09:01PM (#55178457) Homepage

      Yes, relocation from aging parents just adds stress. Furthermore, unless the new company is paying relocation costs and selling your house for you, renegotiating your low mortgage rate then relocation can be expensive, painful, and exhausting.

      I did a relocation and between 6% sales commission on the old house, closing costs, moving costs, and costs to fix up the new house it all adds up really quickly to the tune of more than you are going to be getting in terms of a raise over the course of the year.

      I like this novel approach. If you can't move the people to the jobs, move the jobs to the people. If only there were some sort of technologies to make satellite offices a possibility in this modern age. I am looking at you Silicon Valley and your $5,000/month single-bedroom, rat infested, apartment over a Chinese restaurant.

      • >I did a relocation and between 6% sales commission on the old house, closing costs, moving costs, and costs to fix up the new house it all adds up really quickly to the tune of more than you are going to be getting in terms of a raise over the course of the year.

        Where I live we have a tax break for moving to be closer to work, so long as it's more than a certain distance. I paid no tax the last year I moved. IIRC, it's a percentage, so it's not everything, but it really cut the cost of the move.

      • Re: (Score:2)

        by AmiMoJo ( 196126 )

        If companies want people to relocate they should offer assistance (cash) and expect more than the usual 10% salary bump.

    • you're doing better than most. 40 years of the non-stop shitshow that is the US Economy for the working class has done a good job shattering those for a lot. There's plenty who would move. What we don't have is people willing to move and _able_. I moved from one city to another 5 years ago for a job and it cost me $3 grand (gas, uhaul, apartment deposits, etc, etc).

    • I think you're right - people also have their own network locally and with all the layoffs and what no that happen frequently, why move unless it is the last resort.

      I also think the last recession made it harder for people to move because they may have been under water on their mortgages. Property values in general feel, so unless you were in dire straights why wouldn't you just try to ride things out rather than sell at a loss?

  • editor is a dead-end job, too.

  • wow. This is starting to sound almost like a free market again.

    • Don't worry, the dem economy will crash into a typical repub recession soon.
  • If these jobs are so simple, they will be automated soon anyway.

    • Simple does not mean easy to automate. Sewing a pair of jeans is simple. Manufacturers have been trying to automate the job for decades, with little success so far.

      • Manufacturers have been trying to automate the job for decades, with little success so far.

        Maybe not quite there yet, but it's coming [qz.com]

  • a New Jersey-based software company went hunting for a U.S. city with a surplus of talented employees stuck in dead-end jobs...some companies have decided to move closer to potential hires.

    Software company, but no working from home option? They prefer the expensive moving the office option instead of providing a cheap remote option especially for 'dead-end jobs' staffs?

    What a disappointment.

  • 'They were not in real careers,' said Tri Nguyen, Network Capital chief executive. That's a pretty disgusting attitude from Mr. Nguyen. I won't be doing business with Network Capital.

    • 'They were not in real careers,' said Tri Nguyen, Network Capital chief executive. That's a pretty disgusting attitude from Mr. Nguyen. I won't be doing business with Network Capital.

      There are a lot of people in that situation that are looking for a career. When the job market tanked a while back, college graduates wound up in jobs that were not careers but at least paid the bills. Now that the market is stronger those people will be looking to move to better jobs that offer career advancement. Companies at the low end that had it easy hiring when the job market sucked will now face challenge getting the same caliber employee at the same price. I saw that first hand when a company a fri

    • Re: (Score:2)

      by swb ( 14022 )

      I would imagine that the kinds of MBAs that define a business as a firm that continually grows its revenue and profits also define a career as a working path that leads to continuous advancement of position.

      Trouble is, I don't think it's necessary to define either by those terms. I think there's a fair number of businesses that manage to stay mostly the same size with just enough growth to offset inflation and slowly adapt to changing circumstances.

      I think a career could be the same way, especially in some

  • It beats offshoring (Score:5, Interesting)

    by ErichTheRed ( 39327 ) on Monday September 11, 2017 @10:47PM (#55178803)

    I'd be happy if more companies went this route than playing the H-1B visa scheme or sending every scrap of work to Tata or Infosys because their competitors are doing it. And this is coming from someone who lives near a high cost city. HR departments, don't do anything their competitors don't do, and they will only listen to management consultants as a source of new ideas. It explains why nearly every company suddenly jumped on the outsourcing bandwagon at the same time, adopted the Google open office stuff, and enacted all sorts of other management fads. Maybe we have a mole inside of McKinsey who's starting to plant employee-friendly ideas in client's heads!

    Satellite offices in cheaper parts of the country aren't new. Even IBM (before they went nuts and moved everyone to India) and other deep-pocketed companies had them back in the day, and that was when it was harder to stay in touch. The only difference was that the office was in Pittsburgh and not Pune, or Moline and not Mumbai. I remember reading something some time back that mentioned IBM would strategically locate big engineering facilities just far enough away from large business centers to be a short flight or medium length drive. They'd import the workers or hire from local university talent pools, and the execs would be mollified because they still felt like they had control. IBM used to have big facilities in Burlington, VT and Rochester, MN that fit that description perfectly. They probably didn't have to pay anything near what they'd have to pay for people in Westchester or Dutchess County, NY.

    Spreading out the wealth of a big company over a bigger area is a good thing. Silicon Valley/SF and California in general are out of control in terms of housing prices and cost of living. Metro New York (where I live) isn't far behind at all. If enough employees could be convinced to move to a low cost city, sell the house and save 2/3 of its value while buying a mansion with the other 1/3, that would definitely lower housing prices. You can get over $1M for a total dump in SV, over $400K in outer NYC suburbs and way more when you get closer to the city. That's lots of peoples' retirement fallback plan from what I can tell.

    I just think it's funny that companies are "rediscovering" that it's cheaper to employ people who don't have million-dollar houses to maintain. Expectations do need to come down on both sides. Companies have to be willing to invest in people, and employees can't demand unreasonable salaries or else they're just going to continue with the offshoring. The market can't sustain conditions where everyone who can fog a mirror and write Rust or Node.js gets over $200K, nor can it maintain a world with only super-rich executives and massive unemployment in every other class.

    • Even IBM (before they went nuts and moved everyone to India) and other deep-pocketed companies had them back in the day, and that was when it was harder to stay in touch. The only difference was that the office was in Pittsburgh and not Pune, or Moline and not Mumbai. I remember reading something some time back that mentioned IBM would strategically locate big engineering facilities just far enough away from large business centers to be a short flight or medium length drive. They'd import the workers or hire from local university talent pools, and the execs would be mollified because they still felt like they had control. IBM used to have big facilities in Burlington, VT and Rochester, MN that fit that description perfectly. They probably didn't have to pay anything near what they'd have to pay for people in Westchester or Dutchess County, NY.

      I worked for IBM back then, and that approach had its own share of problems. Fairly large ones.

      The biggest was that those big engineering offices utterly dominated the local economy. Effectively, they created company towns, which meant that everyone who joined IBM had to move to one of the towns, and everyone who left IBM had to move out of one of the towns. This sucked for employees. The fact that there were several such locations meant that transferring to a different job within the company also frequen

    • Re: (Score:2)

      by T.E.D. ( 34228 )

      Spreading out the wealth of a big company over a bigger area is a good thing. Silicon Valley/SF and California in general are out of control in terms of housing prices and cost of living.

      This is the thing. I'm sure those areas a beautiful places to live too, or at least were, but they are clearly more than full up of people and can't really support more without some major structural changes to housing. Why keep trying to squeeze 100lb of potatoes into a 10lb bag?

      Where I have roots in Tulsa you could buy yourself a lot of top notch engineers with decades of experience for less than 100k. We're perhaps an extreme example, but the country is chock full of places like this. Orlando, New Orlea

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