Tech firms fight low morale and attrition as their stocks get hit
Key takeaways:
- Silicon Valley recruiters point to frustration among prospects given options at an all-time high and are incredibly underwater as stock prices plunge.
- Robinhood, Snap, Roku, and Uber are among the tech companies offering more equity grants or money compensation amid a decline in their share costs.
- “Seeing their profits shrink daily is distracting,” states Will Hunsinger, CEO of executive recruiting company Riviera Partners.
- “There’s a lot of stress for these firms to take action.”
Stocks of tech companies fall:
Tech firms are looking to give new stock and cash bonuses as sinking share costs weigh on employees’ wallets and morale.
Robinhood, Snap, Roku, and Uber offer more equity grants or money compensation amid plunges in their stock costs.
Silicon Valley recruiters point to frustration among candidates, who may have been granted chances near an all-time high and are highly underwater after the sell-off. All four firms have share prices that are almost 46% off their peaks.
“Seeing their profits shrink daily is distracting,” said Will Hunsinger, an ex startup founder and CEO of Riviera Partners executive search company.
“There’s a lot of strain for these firms to take action — either repricing options to mirror market conditions, or coming up with additional cash compensation for folks — particularly when you have companies performing well, but volatility and the delay in the markets are pushing the stock price.”
It’s standard for tech workers to forego a higher base pay for a bigger slice of firm shares. For decades, the move has allowed for a substantial payday in a successful public offering or investment. For startups, it can be a less costly way in the near term to draw employees.
But that trade-off doesn’t work if share costs fall.