By Ted Mann
When General Electric Co. recruiters started asking superiors to
sign off on generous pay packages to lure engineers to a new
software division in 2012, the bosses balked: You're not competing
with Google and Amazon, they said.
Four years later, GE's thinking has changed: tech talent is what
the conglomerate is after, at tech talent rates.
The success or failure of GE's foray into software -- the most
broadly advertised angle of Chief Executive Jeff Immelt's effort to
reorient one of the oldest industrial businesses -- will depend on
luring software minds away from Silicon Valley titans such as Apple
Inc. and Cisco Systems Inc.
Within the company, that has meant shaking up long-standing
practices on everything from how workers at its San Ramon, Calif.,
software center are paid relative to their peers in
industrial-business units, to finding footholds in or near big
cities where software engineers cluster.
GE says it's working.
"People are starting to say, 'Wow, these guys are starting to do
some cool things,'" said Jennifer Waldo, the head of human
resources for GE Digital, the software unit. "Some people still
don't view us as a technology company, and that's the tricky part
for GE. We're also an industrial company...It's not going to feel
like Google, exactly."
Steve D'Aurora, a former leader of Apple's Siri team, said he
"harbored the same skepticism" when Harel Kodesh, the chief
technology officer at GE Digital approached him last year. The
43-year-old Mr. D'Aurora said he was concerned that the company
would be stodgy and bureaucratic, but that changed when he visited
San Ramon. "I'm a little older...and I have kids, and it's not like
I have to work at Apple or Google," he said. "It really came down
to what Harel told me: We're going to change the world."
The company now offers base pay, bonuses and equity to GE
Digital employees, in line with competitors in Silicon Valley, not
just Siemens and Honeywell. "Honestly, we couldn't hire anybody if
we didn't," Ms. Waldo said. But the issue is "sensitive," she
added, because in other GE offices around the country the shift in
compensation for digital workers is coming more gradually.
A senior software engineer at GE Digital earns about $138,000,
according to data collected by Glassdoor.com. That is on par with
International Business Machines Corp. and SAP AG, according to the
careers website, but well below Google or Facebook, where those
employees are paid an average of about $250,000 and $ 220,000,
respectively.
GE, which was incorporated in 1892, established GE Digital as a
stand-alone software unit in 2015, distinguishing it from its
industrial divisions, which make jet engines, power turbines and
medical scanners, among other products. The digital unit, with
28,000 employees, makes up a small percentage of Boston-based GE's
333,000 world-wide workforce.
GE Digital has more than 1,700 workers at its headquarters in
San Ramon, about an hour drive from both San Francisco and San Jose
in the eastern reaches of the Bay Area. That is a 40% increase
since the beginning of the year. The company says it will surpass
2,000 workers in the complex during the next two years.
In presentations for investors this summer, the company pledged
to aim high in its search for talent, plucking programmers not just
from enterprise companies such as Cisco and SAP, but also
fast-growing firms like Google, Apple and Facebook Inc. And, GE
says it has an attrition rate of 5.5%, compared with 22% for the
tech industry overall.
Some in the industry are skeptical.
GE Digital "would struggle to draw at the level of talent that
an Apple or a Facebook or a Google could draw," said Mehul Patel,
CEO of Hired, Inc. an online recruiting service, though GE can best
industrial competitors such as Honeywell and enterprise players
like Cisco. The best young talent either wants to join a startup or
work on Facebook's big next project, he said.
John Sullivan, a veteran Silicon Valley recruitment expert, who
was chief talent officer at Agilent Technologies Inc., doesn't
believe GE will attract the young programmers it is seeking if it
remains far from the urban center of San Francisco, and if it
doesn't shake up its recruitment to cater to workers' expectations.
Instead, GE has been relying on the traditional strength of its
reputation as a major corporate power -- a brand that means little
in Silicon Valley, he said.
"I worked with them for almost 20 years, and I said the world
has changed and your recruiting hasn't," Mr. Sullivan said.
GE countered with examples like its hiring of Darren Haas, a
co-creator of Siri who was head of cloud engineering at Apple, who
joined GE Digital in June.
GE's massive reach is an advantage for workers looking to
develop new skills and work on projects of consequence, said Rick
Devine, the CEO of San Francisco-based advisory firm Talent Sky.
"You actually have something to sell here that they don't."
The company's activity has helped attract new leaders such as
Colin Parris, a longtime IBM executive who jumped to GE's
software-research operation in upstate New York in 2014.
"Every CEO talks about a billion dollars here and a billion
dollars there," Mr. Parris said, referring to the large projects GE
handles. "How I know it's true with GE is they're actually hiring
people in the Valley. You can't lie about that."
The San Ramon offices have some of the design touches common to
Silicon Valley workplaces: exposed ceiling mechanicals, table games
and a communal kitchen. But San Ramon is far from the hothouse tech
communities of Palo Alto, Menlo Park, and San Francisco. GE
Digital's most prominent neighbor is the headquarters of oil giant
Chevron Corp.
"There's no doubt that there's some candidates that prefer not
to make that drive out" from San Francisco, Ms. Waldo said. "But
with that said, it hasn't really hurt us." For older prospective
hires, the suburban location is an advantage -- closer to good
schools and without the traffic-choked commute.
"Any company going there would go there to tap into a more
affordable labor pool," said John Brady, head of the San Jose
office of Savills Studley Inc., a commercial real-estate services
firm.
GE has targeted prospective employees, and the public, with
marketing campaigns about building software for things that matter,
such as jet engines and MRI machines. The ads tap into GE
employees' own experience on the West Coast, where the company
hasn't traditionally been a major employer and its brand isn't well
known among some tech industry workers, despite being a marquee
name in other parts of the country, Ms. Waldo said.
At some events, GE staff have been confused for workers from
General Motors Inc. "I'm scratching my head like, 'You don't know
who GE is? How is that possible?," she asked. I removed because I'm
sure this anecdote works, Ms. Waldo said.
Boris Epstein, a co-founder of Binc, Inc.a Silicon Valley hiring
firm, said, "We don't often hear candidates asking for
opportunities at GE." But the company is further along than many
other traditional enterprises. "Success for GE doesn't necessarily
have to align for them beating out Google and Facebook for
talent."
(END) Dow Jones Newswires
September 20, 2016 09:14 ET (13:14 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
GE Aerospace (NYSE:GE)
Historical Stock Chart
From Aug 2024 to Sep 2024
GE Aerospace (NYSE:GE)
Historical Stock Chart
From Sep 2023 to Sep 2024