Case Study Analysis of Yahoo Tech Workers

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In many fields, workers are practically begging employers to hire them, but in information technology, the demand for talent often outstrips the supply. Employers struggle to attract and keep software experts, always concerned about the risk that their best people will leave for a better offer somewhere else. For a high-tech worker, what often amounts to a better offer is a chance to be a part of the exciting new thing, whatever that is.

That presents a challenge for Yahoo. A couple of decades ago, the web search company (now an advertising, news, and e-mail company) was one of the hot businesses of the Internet age. Today Yahoo’s sites attract 700 million visitors a month, and the company’s 14,000 employees are well paid, but the excitement is no longer there. To the industry, Yahoo is part of the old Internet. The best and brightest want to be part of the new Internet, especially social media, cloud computing, and mobile apps.

In that environment, Yahoo is seeking pathways for growth even as some of its best talent is slipping out the doors. Greg Cohn, who worked his way up from business strategist to senior director responsible for new initiatives, admires Yahoo’s management but left to start his own business. A vice president of Yahoo’s operations in Latin America also left, and so has the company’s chief trust officer, who moved to a position at Google. In another sign of employee dissatisfaction, a recruiter told a reporter, “If you call nine people at Yahoo, you’ll get nine calls back.” In other words, leaving sounds like an option for just about everyone. Executives are preparing for a faster exodus as job growth heats up elsewhere in Silicon Valley.

Because of these trends, Yahoo forecasts that it will need to do intensive recruiting. But how do you get people to think about working for a company that many believe has passed its prime? Yahoo definitely has work to do. Software engineers who look up employee reviews on Glassdoor.com would notice that employees rate Yahoo just 3.2 on a scale of 1 to 5, trailing Facebook (4.2), Google (3.9), and Apple (3.6). Seeing that, an engineer probably wouldn’t bother to look up a Yahoo careers page.

One person who contributes to a solution is Susan Burnett, Yahoo’s senior vice president of talent and organization development. Burnett aims to create an environment in which employees learn the skills they need to take on greater responsibilities. Burnett first established a development program for 2,000 highpotential employees. The program, called Leading Yahoos, teaches leadership, goal setting, and measurement of results. By helping these new leaders align their work with the company’s overall strategy, it supports Yahoo’s effort to make goals more visible to employees at all levels.

More directly, Yahoo is seeking to find highly skilled software experts by recruiting away from Silicon Valley, where the competition for talent is intense. For example, it worked with the Champaign County Economic Development Corporation to announce that it wanted to hire software developers to work at the University of Illinois Research Park. Yahoo said it had six to nine open positions but would consider hiring more if it received enough good applications. The company’s publicity noted that it paid above-average salaries for the research park and that the Champaign facility was innovative, having applied for patents on 25 ideas.

Observers note that Yahoo still earns most of its money by employing reporters to write stories and salespeople to sell ads, an old-media kind of operation that is hard to run at a profit. Yahoo outsourced web search to Microsoft’s Bing, and in spite of its leadership role in advertising, it has yet to offer much in the hot young market of mobile ads. Shifting from unprofitable, low-growth activities to activities with more potential could lead to significant staff cuts in some areas even as a hiring push continues in others. Still, one former employee sees hope. Geoff Ralston, who worked on Yahoo Mail, notes that EBay and Apple both survived periods when they seemed to be fading away. Ralston believes the solution is to buy or build “consumer experiences that are unbelievably great.” That’s a mission a tech worker would choose to accept.

Questions

1.What conclusions can you draw about the supply of and demand for labor at Yahoo?

2.What actions might Yahoo take to strengthen its internal recruiting? How might these efforts support Yahoo’s corporate strategy?

3.If you were responsible for college recruiting at Yahoo, where would you recruit, and what would you say? Why?

SOURCES: Kara Swisher, “Yahoo’s New CEO Preps Major Restructuring, including Significant Layoffs,” All Things Digital, March 5, 2012, http://allthingsd.com; Don Dodson, “Yahoo in Market for a Few Good Engineers,” America’s Intelligence Wire, December 15, 2011, Business & Company Resource Center, http://galenet.galegroup.com; Amir Efrati, “Yahoo Battles Brain Drain,” The Wall Street Journal, December 5, 2011, http://online.wsj.com; Ladan Nikravan, “An Engine for Growth,” Chief Learning Officer, September 2011, pp. 22–24; Peter Burrows, “The Web’s Walking Dead,” Bloomberg Businessweek, September 19, 2011, pp. 41–42. (Noe, 2013-01-17, pp. 160-161)

Noe, R.  (2013-01-17). Fundamentals of Human Resource Management, 5th Edition 

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