Chapter 1: The Trend of Talent Migration

Recently, I've observed a pattern where many of my intelligent friends are gravitating towards companies like Uber, Shopify, and Airbnb.

This shift has led me to ponder whether these tech giants are investing heavily in lower-quality talent. These organizations acquire and cultivate personnel—individuals who, in turn, create the software and systems essential for operations. This constitutes a significant portion of their operational expenditures.

Interestingly, I've noticed that the success of these companies often correlates with heightened operational costs per unit. Many of my friends who have chosen these roles previously held prestigious positions in top consulting or finance firms, as well as advertising titans like Google and Facebook.

These former high-achievers are often quite demanding. Their intelligence enables them to find ways to navigate the system effectively, a skill that has served them well throughout their careers. They might attempt to reduce their working hours to just ten a week, all while expecting compensation that surpasses what they received in their former, more esteemed roles.

This raises questions about the concept of employee quality. While I don't doubt their intelligence or capabilities, the caliber of these employees isn't necessarily tied to their cognitive abilities or their knack for achieving societal benchmarks. Instead, it hinges on motivation—on intent.

A common thread among my acquaintances at "fast-growing tech" firms is that they tend to work fewer hours while earning a higher hourly wage compared to their previous positions in banking or consulting. However, this reflects their true intentions.

None of them exhibit a genuine passion for their employer. Certainly, they relish the opportunity to tackle "exciting" challenges and be part of a company with widely used products. Yet, this is similar to the prestige they sought in their earlier roles, where the respect and envy from peers were significant motivators.

Overwhelmingly, the sentiment among these individuals is that these tech roles serve as a lucrative compensation for the grueling hours they invested in their earlier careers. They view this as a form of payback for their past sacrifices, in line with the promises made by these modern career factories.

Jobs in banking, consulting, or any large corporate training program are often seen as stepping stones to "greater things." Most employees enter with the anticipation of finding the next exit opportunity. When they finally leave, they seek the benefits they envisioned: a manageable 40-hour workweek, excellent salaries, and comprehensive benefits.

However, many find themselves trapped in a treadmill mentality. This is why they flock to trendy, rapidly-growing tech companies that boast a reputation known to their friends and families. The reality is that many of these firms aren't genuinely fast-growing; they merely appear so in public markets.

These companies face little risk regarding their employer brand, which is advantageous as it provides yet another launching pad for those pursuing their next big opportunity. Positions at Shopify, Spotify, and similar companies become just another brand to leverage for future endeavors, such as an esteemed MBA or an unimagined job opportunity.

These employees aren't committed to a noble cause; they would jump ship in a heartbeat for a more prestigious offer. Their loyalty is superficial.

Instead of focusing on how sticky their customers are, organizations should consider how sticky their employees are. Can these companies retain top-tier talent, or are they merely hiring ambitious individuals who expect rapid promotion cycles that signify "upward mobility," even when the titles hold little real value?

The turnover rate among these employees is often linked to a shallow selection process, leading to a transient workforce. With apps facilitating the quick turnover of such shallow relationships, high employee turnover is now an expected norm for these firms.

Ultimately, this results in a significant waste of time and resources for the company. What’s the benefit of hiring individuals who are likely to leave within a few years? Building anything substantial in a short timeframe is virtually impossible, even if the company claims to be agile and lean.

High turnover is a costly issue that undermines the organization's depth and resilience. A strong bench of employees is essential for navigating tough times and maximizing performance in good times. The core of this turnover challenge lies in the quality of the employees.

As previously mentioned, my concern isn't with the competence of these employees. Many are intelligent, ambitious, and hardworking. Rather, it's about their attitude.

These individuals often feel entitled to all the best perks while being unwilling to dedicate themselves fully to their roles. While I'm not advocating for sacrificing one's life for a job, it's a reciprocal relationship; if you're not prepared to give your all, why should a company invest fully in you?

Low-quality employees often possess an inflated sense of self-worth, believing they are indispensable when, in reality, they could be replaced with ease. The workforce is filled with smart and driven individuals, yet the truly rare ones are self-aware enough to understand their motivations for working in specific roles at specific companies.

Lesser-known, niche companies may have a better chance of uncovering this truth. This leads me to question the operating costs associated with fast-growing tech firms. When I examine their operational expenditures, I can't help but think about the ~$200k salary allocated to a friend with an impressive title, working only 10–20 hours a week while indulging in video games.

From my observations, these scenarios seem to be the norm rather than outliers. Investors often argue about customer quality and retention metrics, and the same logic applies to employees and operational costs. Not all expenses are created equal. An increase in operational and R&D investments doesn't guarantee that each dollar is as effective as it is for other companies.

Upon reflecting on the intentions of those drawn to successful, fast-growing tech firms, it appears that a company's prosperity may be inversely related to the quality of employees it attracts. As a result, each operating dollar may yield diminishing returns over time.

I believe that younger companies lacking prestige may have a better chance of attracting higher-quality employees. While the absence of a brand can attract unmotivated individuals, the scarcity of resources will necessitate thoughtful hiring and prioritize employee longevity.

This suggests that those who seem overqualified may, in fact, have high-quality intentions. This leads me to conclude that the operating costs of such firms are better positioned to generate higher returns.

In my opinion, individuals who genuinely find a place where they can engage in work they love—true passion, not just what society deems acceptable—are likely to remain with that company for an extended period. I'm talking about environments that foster entrepreneurship and ownership within the organization, catering to those who seek the security that comes with employment.

When I hear psychologists, who have never worked in a corporate setting, discussing a generational mindset that prompts young people to change jobs every two years, I find their perspective misguided. They fail to recognize that the real issue lies with the companies and the types of employees they attract, instead opting to blame external factors.

So, what do these companies expect when they hire low-caliber talent?

Perhaps I am mistaken. Maybe established firms prefer not to hire individuals who would disrupt the status quo. They might be looking for employees who will refine existing processes and maintain a steady course without challenging the system.

If that’s their strategy, they may indeed be acquiring the kind of assets they desire. However, I struggle to see how this approach benefits their long-term sustainability if they refuse to adapt. It seems they might prefer diligent workers who demand more for their efforts while coasting through their careers.

I once embodied the characteristics of a low-quality employee. At times, I still find myself slipping into that mindset. Yet, I strive to resist the temptation.

Chapter 2: The Implications of Employee Dynamics

In the first video, "High Tech, Low Touch Culture: Why Top Performers Are Leaving Tech Companies," the discussion revolves around the reasons talented individuals are departing from tech firms, highlighting a disconnect between employee expectations and company cultures.

The second video, "Why the Tech Job Market SUCKS Right Now," explores the current state of the tech job market and the underlying factors contributing to the dissatisfaction among employees in this sector.