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👋 Hi, this is Gergely with a subscriber-only issue of the Pragmatic Engineer Newsletter. In every issue, I cover challenges at Big Tech and startups through the lens of engineering managers and senior engineers. If you’ve been forwarded this email, you can subscribe here.
Hiring software engineers and engineering leaders from Big Tech (Part 2)
Tactics and approaches for startups to hire software engineers with Big Tech experience, and why Amazon is a leading source of talent for early-stage businesses
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Before we start: performance reviews/promotions are around the corner at many companies. As the end of the year is closing in: these events will happen at most organizations in a month or two. The best time to prepare is now – waiting longer might push things too late. See the deepdives Preparing for promotions ahead of time and Preparing for performance reviews ahead of time for tips on what you can do, now, to ensure a fair outcome for these processes.
In the first part of this two-part series, we looked into why Big Tech hires sometimes don’t work out for startups, and also when recruiting from the biggest companies does work for new tech players.
Today, we cover how to recruit from Big Tech, with some tried-and-tested tactics for doing it successfully – and what to avoid, as well. For this, I talked with nearly a dozen startup founders and hiring managers with Big Tech backgrounds. Thank you to everyone who contributed!
In this deep dive, we cover:
When it’s VERY hard to hire Big Tech talent. Golden handcuffs, retention bonuses, upcoming promotions, and no equity on offer.
Which companies do engineers quit for early-stage startups? Google, Meta, Amazon, and Apple, are common frequent sources of such hires. A look at 30 companies from where “stealth startups” hire, and where founding engineers are recruited from.
The right time to make an offer. Four-year vesting cliffs, shifting stock prices, burnout, negative performance feedback, and other factors, can drive talented professionals to seek opportunities beyond the biggest workplaces.
Flexibility. Full-remote work, asynchronous, part-time, and other flexible arrangements can make smaller companies more attractive to tech pros who value the flexibility which Big Tech mostly chooses not to provide.
Hiring outside of the US. Big Tech pay is location-dependent, so packages are significantly smaller outside the US – while still topping local markets. For startups, it’s often more feasible to hire Big Tech folks from the international job market.
Tips for hiring from Big Tech. Startup founders and senior engineers share what works for them in attracting Big Tech talent.
Amazon. The online retail giant is a major source of new hires for small companies for a good reason: it’s the most startup-like Big Tech company.
Google. Some startups have reservations about hiring directly from the tech leader.
The bottom of this article could be cut off in some email clients. Read the full article uninterrupted, online.
Related articles:
1. When it’s VERY hard to hire Big Tech talent
It’s never easy to attract talent from Big Tech for startup recruiters and leaders, and there are factors which make it harder.
Money
Golden handcuffs. When someone is on handsome compensation that’s paid over time, it’d be irrational for them to quit a Big Tech workplace. This is usually related to stock appreciation, or more rarely, generous retention bonuses. For example, most NVIDIA employees who joined in the last 2-4 years have “golden handcuffs”. We covered why rising stock prices make it hard to hire from public companies.
Pending retention bonus. Big Tech pays these to a small number of engineers and managers seen as top performers or key contributors. Retention bonuses may be cash or equity, and are paid after a set period, usually between 6-24 months, or in installments. If someone quit sooner, they’d say goodbye to a significant sum. Hiring such people usually involves offering an equivalent amount as a signing-on bonus.
Hiring from Netflix. The streaming service is a special case in Big Tech because it pays all cash compensation with no equity component; meaning it’s impossible for small enterprises to compete on cash with Netflix. Here’s what it offers:
$400,000 to $600,000 for senior software engineers in the US
$600,000 to $800,000 for staff software engineer in the US
~€350,000 for staff software engineer in the EU
The only companies that can match liquid total compensation packages like these are Big Tech and publicly traded tech companies, which offer much lower base salaries and make up the rest with equity.
We previously covered Netflix introducing levels to replace its single senior software engineer level.
Timing
Close to promotion. Leveling up can mean a significant 25-30% jump in compensation within Big Tech. An engineer close to a promotion might want to wait and see what happens, before deciding whether to quit. Cycles are typically twice yearly at most large companies.
We cover promotion advice in Preparing for promotions ahead of time.
Engaged in a project. As a general rule, engineers and managers generally dislike leaving a large project before it’s finished. When investing a lot of effort, most people want to see it through, and so delay new opportunities until a launch is over.
Upcoming annual bonus. A month or two before bonuses are revealed is a hard time to hire from Big Tech because people understandably want to collect their bonuses; especially as some Big Tech companies reveal them up front, like Meta. Big Tech bonus dates:
Google: January
Meta: March
Microsoft: September
Apple: October
Netflix: no bonuses
Offering no equity to new hires
There are small companies which offer a base salary and even a cash bonus to new hires, but no equity, which makes hiring from Big Tech close to impossible. People interested in quitting Big Tech generally accept their total compensation will take a hit, short term. However, the expectation is that comp will shoot back up if they help make a new company into a success. This is why equity stakes matter.
Companies offering massive cash bonuses are an exception, of which hedge funds are the best example. They typically pay a relatively small base salary, but pay cash bonuses several times bigger, depending on fund performance. Hedge funds in locations like New York City and London are probably the only places that can issue no equity while still attracting Big Tech engineers and managers.
Other exceptions:
Large title bump. Offering roles like CTO, or head of engineering, to a former Big Tech senior engineer or engineering manager is a career boost that’s usually not available at Big Tech.
Relocation to a new country. People are usually okay with taking a cut when migrating. Coupled wit