Can an Old Company Attract New Talent? Amidst Challenges, GE Holds Its Own to Build Dream Team
If Thomas Edison applied for a job today at General Electric, the company he helped found, would he get hired? Not likely. He probably would be considered too quirky and unproductive. Edison had about 1,000 failures – or as he put it, “1,000 steps” – before successfully inventing the light bulb and changing human history.
A recent article in The Economist hailed GE as being nimbler than its main competitor, the German industrial giant Siemens, in the race to dominate the new Internet of Things space. But while aspiring to live up to this compliment, GE still must dispel the perceptions being touted by some industry insiders who express skepticism about GE’s ability to attract and retain the tech talent it needs to meet its ambitious goals.
As GE sets its cap for global domination in artificial intelligence it plans to morph from making things like jet engines to digitalizing things like jet engine software. To do that as a market leader will require a workforce of innovators. Many of these would work for GE’s new software division GE Digital located in San Ramon, a Northern California suburb midway between San Francisco and Silicon Valley. It is a region rich in tech talent but also other companies that want to hire them.
According to data from Paysa, GE’s current hiring pipeline for software engineers still mostly comes more from older established corporations with traditional top-down management styles than from leading tech firms known for their edgier creative cultures.
A data analysis of GE new hires for its digital division (GE Digital) for 2016 reveals that GE does face challenges in attracting tech talent from the uppermost echelons given its new ambitious goals. GE recorded $6 billion from its software and analytics tools in 2015. Now it hopes to become a top 10 software company and has set a goal of $15 billion in sales by 2020.
But of new hires for 2016, none came from Uber or Google, the number one and two top ranked companies for tech talent, according to Paysa’s latest rankings. One new recruit came from Facebook, which is ranked fourth and one from 11th place Apple. However, four new employees came from Visa, in 53rd place, and four from Cisco ranked 77th. And three from 99th ranked Intel.
GE’s tight purse strings on paychecks may be a factor in their failure to lure top tech talent away from the highest-ranking companies. In this sense, GE’s building a new campus for its digital division in the Northern California suburb San Ramon may be a hindrance as much as a help. GE’s base pay for software engineers of $104,000 with $34,000 in equity for a total of $138,000 may be a princely sum for the Boston area where GE is headquartered but is relatively meager by Silicon Valley tech standards. For one thing, there’s the high cost of housing and living in the San Francisco Bay Area. For another thing, the local competition is not just paying more. They’re paying a lot more.
For a similar skillset in software programming and coding, other major players in the region are paying salaries that average in the $200,000 range. Top dollar is paid by Facebook with $153,000 base salary and $126,000 in equity for a total ongoing salary of $336,000. In second place is Google with $145,000 base pay and $76,000 in equity for a total of $274,000. Even Walmart Labs, an ecommerce innovation incubator for the discount retailer, pays a base of $143,000 with equity of $24,000 for a total salary of $197,000.
To make matters worse, GE’s sign-on bonus of $15,000 is 5 to 10K below the bonuses given by its competitors in the tech talent pool.
Money may be just one part of GE’s challenge in hiring staff to meet its lofty goals. Some tech industry analysts see GE as a “huge and ancient bureaucratic behemoth” whose outdated HR procedures may inadvertently screen out the very talent they need to hire. Others see the culture at a traditional company like GE as too rigid and structured to give engineers the space they need to explore.
A former employee said, “This has epic failure written all over it. I used to work for GE. They are totally obsessed with meeting earnings estimates. Tech and innovation may not play out that way. My experience is that innovation happens in spurts, sometimes for the lack of better articulated words, pure luck. Will GE have the patience to wait? Not likely based upon my experience.”
GE’s image and reputation of old may be putting a damper on some of GE’s current initiatives, like GE Digital, if only for the time being. The skepticism may be premature.
New Paysa data on GE’s tech talent and CompanyRank suggests that the company overall may be succeeding in turning the battleship around. Surely the company is attracting a talented pool of tech and engineering employees – with nearly 60 percent possessing master’s degrees. The company in its entirety has steadily climbed from its position as ranking at 7878 in March, 2013 to achieving a CompanyRank of 3,091 in March of this year. And GE Digital has really held its own – starting its rise from number 29 in August 2015 to a rank of number 20, currently. While it still has a way to go before reaching the upper strata of companies like Uber and Google, GE’s surge through the ranks suggests that the company may be headed in the right direction. It is an indication that things are looking up for GE and a lot is going on under the hood that hasn’t been widely reported just yet.
Paysa Analyst & Writer