If that's the case, then it would not have saved money, rather, it would have had the effect of simply shifting the money from going to existing Google/Apple/etc employees to applicants from smaller firms.
That is, it changed the distribution of spending, and probably in a more egalitarian way, distributing the spending over a larger pool, instead of simply fighting over, and raising the wages, of the small group of superstars at the big companies.
These companies are spending on R&D and increasing the percentage year over year, they are also spending huge sums of acqui-hires, and hiring faster than the local communities, or their own office space, can handle.
You could argue that excessive salaries are actually bad for allocation. Wall Street has infamously brained drained tons of the best and brightest to figure out how to gain small efficiencies in stock trading. What discoveries might have occurred had string theorists not left to go optimize portfolios?
One thing I wouldn't call engineers is cheap. You're talking about people making upwards of $150-200k in salary, and probably up to half-million when total compensation is considered. I paid more in taxes last year than my mother earned in several years of working as a cashier. And that's pretty sad. I grew up poor so I have a different perspective on this, but I see a lot of #zeroethWorldProblems whining going on in the valley while the world around them is falling apart. It's useful to have some perspective, and honestly, if these companies are to be fined and sanctioned, I'd rather the money go to poor people, instead of lawyers and techies who need to increase the bid on their studio apartment.
I think it's acceptable to say that this scheme was bad and wrong and also to acknowledge that there are more significant and severe wealth and wage problems in this country for a large group of people outside engineering, law, medicine, etc. and those problems need to be addressed. I don't like the attitude of saying hey, the engineers are doing pretty good guys, it's ok if the even richer take money from them they should have rightfully earned. That won't solve any problems, least of all the more severe wage discrepancies or plight of the poor.
It would only be price fixing if there was an industry wide agreement to put a cap on engineer salaries. Rather instead, what you have is an agreement to shop in one market exchange instead of another.
I mean, what do you think is better for both engineers in general, as well as the companies: Trading a small set of engineers back and forth with ever more escalating compensation in a bidding war, or, hiring from a large, general pool of applicants?
One way leads to disruption, mono-culture, and somewhat unfair bias towards those not on the roster already of the big companies. If anything, not cold calling should increase diversity as well.
This scheme only seems slimy to me, because any agreement between companies in secret, seems slimy. But I am really not seeing it as a price fixing scheme, and I find it hard to get myself motivated to Occupy Mountain View protesting.
This reminds me of several years ago when Google switched the Holiday gift from giving $1000 tax free cash in an envelope, to giving a free device (phone/tablet/etc). Some people were irritated by it and complained, but I found the complaints to be a solo on the world's tiniest violin. Seriously, there are people starving on Christmas, unable to even buy their children toys or clothes, and people earning in the top 1%-10% are annoyed that instead of $1000 cash, they get a $500 device for free. It's an even more absurd version of Louis C.K.'s "everything is awesome and no one is happy."
Focusing recruiting, sure. But pre-filtering on the basis of factors "not relevant" to the person performing the job starts to get into a very grey territory in terms of discrimination. (I realize on the surface this seems silly since where you are working is totally relevant to a new job, but not in the context in which it was being utilized.) I really don't intend to draw a strawman with this, but that I see a big difference between their limiting their effort, and their prohibiting your effort.
On top of that, unless I missed something, the documents I've read excluded engineers, the ones getting their jimmies ruffled, from the 'do not hire' list and simply had them on a 'no cold call' list. It was management and sales that were under some 'do not hire' list, right?
In this whole thing, the only part that I find morally/legally suspect is the agreement to not hire certain categories of employees from certain companies. Everything else is just a bunch of hand waving from highly paid people that want to be paid even more. And even that, had it been worded slightly different, would be arguably legal.
I (as an engineer) have my "jimmies rustled" because this sets a really worrying precedent for the behaviors of these companies I do/might work for, and is frankly the sort of behavior that makes me have implicitly low trust for people with this sort of power, which is an unfortunate state of things. (I'd really like to be able to trust people, I promise...)
I know it isn't a popular view, but I see nothing morally wrong with two companies agreeing not to hire each other's employees. I see no rights being violated. Apple employees have no right to be hired by Google, and vice versa - therefore Google and Apple not hiring the other company's workers does not constitute a violations of rights.
Nor do I think it violates any free market ideas, at least not mine. What Google and Apple essentially are doing is disadvantaging themselves compared to their competitors. Any company that does not enter into a no-poach agreement is at a competitive advantage compared to all the companies who do. Let's say Samsung is not in this agreement, the result is that Samsung can hire both Google and Apple employees, while neither Apple nor Google have this privilege. The talent pool for Samsung would be greater than that of both Google and Apple, and it will be at a better position to hire the people with the qualifications they need.
Now, if Steve Jobs start making threatening calls to Samsung's CEOs, then we would have something that would constitute criminal activity. That is not acceptable. Steve Jobs cold-calling Brin/Page/Schmidt (can't remember who it was), and telling them in an agitated manner not to hire his employees is also on the verge of being criminal, at least if threats were involved. But my impression is that Jobs knew at least Schmidt fairly well privately, which makes it another matter than cold-calling some CEO at some company you've never heard of, and shouting at them not to hire your employees.
I don't think the evidence supports this theory.
If the illegal agreements had artificially raised salaries then you would expect salaries to remain the same or even decrease after the DOJ stepped in.
Instead, according to the WSJ, Google gave a 10% pay increase to all of its employees six weeks after the hiring collusion ended.
http://blogs.wsj.com/law/2010/11/10/on-googles-10-percent-pa...
To an extent, existing employees with stock-based compensation, and also seeking "purpose/control/mastery" satisfaction at work, share their employers'/stockholders' interests in quelling rampant mercenary turnover and salary-over-all bidding wars.
Another second-order beneficiary of any attempted employment cartelization could have been the startup ecosystem. As a founder or very-early employee, you "eat what you kill" rather than any industry-average salary. And, the pool of willing founders could have been expanded by missing/lower recruiting from the giants.
i.e. If Google wants another engineer it can hire from outside or it poaches Facebook's(or another's in that club). In the second case Facebook (now needing an engineer) will then either poach from Google(or another in that club) or hire an outside engineer. The only way an outside engineer isn't hired is if Facebook/Google decide that an extra engineer is not worth the new higher salary (or the expected lower worth of them since they constantly jump ship).
Even if the pool is smaller than the current pool of engineers at the big companies it would still arguably be a "fairer" distribution of wealth because the profits are more evenly spread through the successful companies. It would also mean that as the larger companies produce less (fewer engineers to make things) there are more engineers that could be working on competing/niche products that are currently worked on by the larger companies.
Also, again, this is only about no-cold-calling. If someone truly thought they were hot stuff, and wanted to cash in, all they need do is threaten to quit, seek out an offer themselves, and they could gain your "fairer" distribution.
In fact, it was not at all uncommon to people to threaten to leave and get big counter-offers to stay in recent years, especially higher level employees.
As to your second point regarding the cold calls if the cold calls do not have some benefit for the one called then it wouldn't matter if other companies were making them (as why would the employee leave). The fact that these companies colluded to avoid them speaks to the fact that threatening to quit vs being poached does not have the same benefit for the employees(or that not all employees have the tendency to act as mercenarily as perhaps they should).
You could raise salary of your existing engineers to match the market. "Poaching" is possible only because finding job elsewhere is often only way how to get raise, no matter how much they learned since they started working with you.
It also introduces systemic risk for engineers, because then the wages could only go down over time. Because any attempt to look for a wage increase would be stopped short by the don't-share-employees-agreement. I also want to note that the companies in the best position to offer you a wage increase are the top-tech companies like Google and Apple.
And yes, compared to other people engineers have little reason to complain. But I still think this incident is a valid reason for complaint.
Anyways... even if one were so inclined to not share my perspective on this point (that our earnings as an industry are great), you would still need to acknowledge the possibility that this "agreement" might have actually freed up salaries for the wider job pool, instead of coalescing into singularities around a handful of rockstars.
The system should be equitable from top to bottom.
There were no explicit compensation controls in place here. The top engineers at these companies are millionaires. Good engineers, as cromwellian points out, make easily in excess of 200K (sometimes a lot more) with total compensation.
This is about a no-cold-call agreement for employees, with a possible extended no-poaching agreement. This certainly already applied to executives, not just engineers. More-over, it is open to debate whether this actually had a negative effect on the industry as a whole. It might actually have given startups the opportunity to hire decent talent, and may have deflected hiring spending to engineers not already at Google/Apple/etc...
I'm not trying to justify the backroom, in-the-shadows type of dealings that went on here. That certainly came across as a little slimy. I am purely making a commentary on the perception that this somehow had a material effect in depressing the tech industry, engineering wages and/or quality of life.
There were a lot of tech companies that weren't in on it. They were still poaching employees, and employees were leaving to do their own start-ups.
I especially don't mind it if, as the great-grandparent suggests, the existence of other non-cartel competitors meant it had no effect on salaries.
Even if it did have indirect effects on salary levels, such conventions might also plausibly help prevent certain kinds of ruinous/negative-sum-for-all competition, that rewards a few rapid job-switchers, but at the expense of the industry, region, or majority of employees.
I would mind a "don't-hire-if-they-apply" agreement. That'd be an abusive oligopsony conspiracy in restraint of employees' ability to seek out new arrangements.
Admittedly more tenuous, but other emails mention HR staffers being fired for cause due to contacting employees from another firm in the cartel. This would send a fairly extreme message to other recruiters about where to direct efforts.
In my own experience, I never heard from Google while at Apple. 6 months after moving into finance, three recruiters from Google contacted me independently of each other. Ironically, the only reason I went into finance at the time was because I needed to move to NYC and Google wouldn't speak to me.
The fired recruiter lied about a job offering and its pay level.
I thought we agreed not to recruit any senior
level employees…. I would propose we keep it that
way. Open to discuss. It would be good to agree.
OK, I’ll tell our recruiters they are free to
approach any Adobe employee who is not a Sr.
Director or VP. Am I understanding your position
correctly?
*I’d rather agree NOT to actively solicit any
employee from either company ….. If you are
in agreement, I will let my folks know.*
Even after the class action lawsuit is settled, it's likely the penalty won't be anywhere near the amount of profit that was illegally captured.
Furthermore, think about what these companies would have chosen to work on had engineers been more expensive. Would we have seen more useful products coming out of the valley if staff allocations had worked out differently?
When people are cheap, throwing them into doomed ventures like Google Buzz or Apple's awful Samba clone isn't nearly so devastating to whatever middle manager chain dreamed them up.