Super hot high-tech employment breaks local records

Demand for office space in Silicon Valley is 'hotter than I've ever seen it,' says one real estate executive

In this story: Perks are picking up Casual chats important to business Not enough Web space in Silicon Valley RELATED STORIES, SITES

February 7, 2000
Web posted at: 11:04 PM EST (0404 GMT)

From Correspondent Greg Lefevre

SAN MATEO, California (CNN) -- Good employees -- and the space necessary to put them to work -- are a hot commodity in Silicon Valley, where the high-tech boom has made San Mateo and Marin counties job-rich, with an unemployment rate of 1.5 percent.

"I think, right now in the valley, one of the toughest jobs is being a recruiter because there are more positions available than employees," said Suzanne Quintenilla of Excite@Home.

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She briefs about 15 to 30 new employees every week for a wide range of jobs: web design, engineering, software, sales, human resources, graphics, janitorial and maintenance.

And filling all those jobs is getting tough because of rapidly expanding businesses.

Last year, Excite had 700 employees. After merging with @Home, the work force grew to 2,500. Now, Excite@Home needs to find an additional 2,000 workers.

Quintenilla is awed by her company's growth. "When I started, it was 300 people!" she said.

Perks are picking up

And it takes more than a paycheck to lure in new workers.

"I've never seen such a competitive market for talent as in the last six months to a year," said company co-founder Joe Kraus. "And it's funny, you think it can never get any more competitive. And yet the next year it gets that much more competitive."

Kraus lures people to his company with employee perks that include massages, on-site dry cleaning assistance, even a concierge to help employees with their personal tasks that most folks would do on their time off.

Kraus himself has very little time off. He's too busy building and growing a company.

"I'm tired, but I'm having a great time. I think that's sort of the common answer that anybody in Silicon Valley has. I've never had more fun. I've never been more tired!" said Kraus.

The plunging unemployment rate in San Mateo County, where Excite@Home is based, and in Marin County to the north is easily traced.

"It's generally due to the Internet boom. It's due to both companies like Excite@Home who are further along in their life cycle as well as the second-, third-, fourth-generation startup companies that surround Excite@Home," noted Kraus.

He knows why Internet services, which by their nature can operate anywhere in the world, still cluster in Silicon Valley.

"It is ironic that the Internet is a global phenomenon -- yet if you're not in Silicon Valley, it's really hard to get a sense of the pace and the connections between those companies. So many of the ideas get transferred in hallway conversations, meetings over lunch and the casual interactions of the companies that are proximate," said Kraus.

There's a lot of idea-sharing across the backyard fence and at other social gatherings in the valley. The ambiance alone, he said, helps drive the industry.

"I think it's very difficult to be a successful Internet company that isn't based in Silicon Valley," said Kraus.

He is also recruiting for offices in other high-tech regions, notably Provo, Utah; Austin, Texas; and Seattle.

Non-Internet companies are also suffering a dearth of employees.

In Marin County, vegetable retailer David Finlay has to stock his own shelves because he can't find enough staff willing to work retail.

When Excite merged with @Home, employment went from 700 to 2,500 workers

Across the valley, the tech boom created a land rush for office space. In suburban San Rafael in Marin County, office vacancy rates are down to one percent. Older buildings, once considered unrentable, are renovated and full.

"It's hotter than I've ever seen it," said Bill McCubbin, the CEO of Orion Partners, a real estate management firm. He's also president of the Chamber of Commerce. And commerce is good in Marin County.

"There is, for example, only about 160,000 (square) feet of space available today for immediate occupancy in Marin," McCubbin noted. But there is demand for over a million square feet of space, he said.

And he said that when the dot-com companies come looking for space, they want it in a hurry. They move, he said, at "web speed."

"They make it clear to us that they're not going to go through the conventional steps of going through lease review and so forth. They find a location, they move quickly. They want us to move quickly," McCubbin said.

He also said a lease closing that normally would take 90 to 120 days is finished in a week -- but only if he can find the space.

He said Marin County has very stiff zoning laws that have already created huge swaths of permanent open space land.

"There's a finite amount of land in Marin. Not too many realize that 85 percent of the land in Marin will never be developed on, period."

McCubbin said that has turned developers into re-developers in the older sections of town -- like San Rafael, near the George Lucas motion picture empire.

"Downtown San Rafael is really a renaissance city today. You find major companies moving back to the city, and the city planning for housing in the downtown area. You're going to see much more infill than we've seen before."

High-tech gets the attention, but the economy here is remarkably broad. San Francisco's tourism hit an all-time high, construction is up, and San Francisco's airport will more than double its size this year.

But with success comes a price: record high home costs for those who can choke down paying $400,000 for a 2 1/2-bedroom home. And long commutes for those who can't.

"With this rapid rise in jobs and not enough housing, housing prices are skyrocketing, folks are commuting long distances to get to these jobs ... those are the challenges that we face in the midst of this economy," said Rich Gordon, San Mateo County supervisor.

Gordon said the boom itself presents another challenge.

"To figure out how to keep these companies strong, how to work with them in a way that keeps them viable," said Gordon, who aims to keep this Silicon Valley Gold Rush on a roll.

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