Tech Skills Shortage In Silicon Valley: Myth Or Truth?

There is talk amongst startup founders of a skills shortage in Silicon Valley, is this true? The question is worth looking into because there rapidly comes the point where your startup software company will have to recruit outside talent to do the hard things that deliver your products and services.

Yes, is the short answer; the most innovative startups face a skills shortage more than the established companies in the San Jose and Bay areas; the longer answer is yes and no.

Tech Talent Demands And Limitations

The skills shortage is an artifact of two competing functions, the need for talent to create great products and the limits on the cash available to the fledgling companies that want to build them. Startups often have great ideas that need to have a team to develop and, at the same time, they have only enough funding for a limited number of engineers.

The talent in the US market can earn top-dollar, which drains the budgets of startups rapidly and so founders wish to pay alternative ways, such as equity and options for discounted future shares while limiting salaries.

Startups in Silicon Valley that are pushing the innovation do not have the capital to employ the talented engineers who can translate concepts into actions. The shortage results from the very reasonable expectation of engineers that they should earn the going salary rate.

Peak Software Engineer Salaries In Silicon Valley

The demand for engineers in Silicon Valley means that the average programmer can command more than $110K yearly. According to, the best coders and software architects can demand even higher pay, and so they work for the large, well-funded companies that can afford to pay them. These are not the lean startups that are betting it all on high-risk leading-edge ideas.

Limited funding limits amount startups can spend on payroll. A team at such an early stage that is working toward a prototype doesn’t have the cash to throw away on the risk of hiring expensive programmers. So that is the contradiction, the conundrum; if you have the most challenging jobs worthy of the best programming talent, you probably cannot afford it.

Offshore Solutions Have The Talent For Your Project

The solution is that you have to step back and look at the industry from a global perspective. Across the world, many programmers have the talent, the knowledge, and the experience to deliver elegant code. For example, Ukrainian software engineers have the same access to the Global IT community and the benefit of excellent educational systems, which makes them competitive with American engineers, but less expensive.

Read our client story: how sports startup Ski Nation used offshore resources to build native mobile apps, while saving money and team management efforts.

The advantage that your startup gains by hiring offshore contractors is lower payroll costs. Lean startups can have the programmers they need, at the price-point they can afford, if founders remain open to finding the candidates from offshore sources.

So, the skills shortage only truly applies to those companies that face the double bind of having exciting but risky ideas but not the resources to pay the full market rate for salaries. Hiring less expensive offshore contractors brings in the talent that can help to grow your company successfully, and when they do, you might just find those overseas team members are worth having around for the long run.

Are you looking to hire IT Talent for your in-house or offshore project fast and with no HR, IT and administrative hassle?
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Geoffrey has developed a niche in writing that is a great fit to the needs of the modern marketing department. Since leaving conventional employment in 2012 to become self-employed as a writer he has developed a strong base of knowledge and contacts that he has now rallied into a writing team that delivers high quality writing that resonates with readers. Feel free to contact Geoffrey directly in LinkedIn!

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