Will Gov’t Antitrust Moves On Programmer Deals Cost Retail IT Chiefs Big Bucks?

Written by Evan Schuman
April 15th, 2010

Word came down this week that the U.S. Justice Department’s antitrust team is preparing to move against a group of technology vendors—including Google, Intel, IBM and Apple—because they’ve agreed to not recruit each other’s employees. If any such move happens, it could send shockwaves through retail HR—and then to IT—as it could send programmer salaries through the roof.

The Justice Department report, courtesy of The Wall Street Journal, is interesting insofar as it’s an antitrust objection to a series of agreements that are both innocuous and designed to avoid legal conflicts, not create them. The deals are there to allow rivals to collaborate on specific projects, without worrying that your best talent will be hired away at the end of the meetings. It simply says that companies working together won’t try and steal each other’s talent.

The antitrust concerns kick in for two reasons. First, when competitors agree on doing almost anything in the same way, antitrust proximity detectors start getting nervous. But secondly, the government is looking at it from the employees’ perspective. They may very well want to be recruited or to at least be the subject of a highly profitable bidding war.

It’s like those semi-humorous non-compete agreements companies ask employees to sign on their first day. They often say the employee can’t work for another firm in the same area or for anyone who could possibly use the employee’s skills.

That’s like telling a pilot she’s allowed to pursue any job she would like as long as it is no way involves flying. If that pilot’s only job options are those that do not involve flying, her ability to command a strong salary is radically reduced.

In the high-tech space, most employees are valuable only to a limited number of other companies in that space. The most brilliant POS specialist in the world couldn’t negotiate a very attractive deal if it was for a company that had no need for POS systems.

The premise here is that programmers—or, for that matter, any professionals—don’t have rigid value. When the dot-com market was at its zenith, writers and programmers were earning large multiples of what they made just five years earlier. When that market imploded, their salaries plummeted. Their skills weren’t any weaker, but the market-determined value was.

If Justice moves in and forces high-tech vendors to end the ban on partner talent raids, it will quickly inflate technical salaries at those companies. But how quickly—if at all—would those increases travel to retail IT shops? In theory, Google and Apple (back when they were playing nicely together) couldn’t have recruited from each other, but they could steal from Yahoo and even Amazon and Target.

Is the sole cause of the anticipated salary spikes from within those vendors because they are already working in an almost identical atmosphere? If that’s the case, then isn’t it more likely that even if DBA salaries soar at IBM and Intel, the DBAs at Sears and Macy’s wouldn’t be impacted? Or are programmers similar enough that any radical price increases in any major segment will impact all?


One Comment | Read Will Gov’t Antitrust Moves On Programmer Deals Cost Retail IT Chiefs Big Bucks?

  1. Bob LeMay Says:

    I don’t think that a bidding war for technical people between Google and Apple is going to have a significant impact on the rest of the marketplace.

    First, the environments are very different from most commercial programming environments. Second, they will be hiring in somewhat limited areas, so while salaries in those areas might be impacted, it won’t have a widespread impact.


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