In its attempt to retain top employees, Google ended up pushing them away.
Because, as it turns out, while big paychecks are one way to keep people on board, after a certain point, Google’s jobs got so cushy that engineers just didn’t need them anymore.
So, how much were they paying these people?
A butt ton. We’re talking salary and equity bonuses with 16x multipliers awarded for milestones and intermittent valuations of the program.
These multi-million dollar payouts contributed to an $810m increase in Google’s operating expenses in Q4 of 2015. Needless to say, since formalizing the program into an actual business (called Waymo), they’ve switched over to a standardized pay structure.
They had the “F-you money,” so they used it
(If you’re not familiar with this concept, it’s a nest egg that gives you the luxury of telling your boss “F-you,” and driving cross country in a van with your dog).
Some engineers were poached by rivals, others started their own ventures, but by the time Google launched Waymo, the program had lost a bunch of the people they had invested in early on.
And, to add insult to injury…
Many of the project’s alumni are now competing with their old employer.
Executive Bryan Salesky’s self-driving software startup Argo AI was just acquired by Ford for $1B, and Otto, a fleet of self-driving trucks founded by a crew of ex-Googlers, was acquired by Uber last year for $680m.
Perhaps the biggest threat, former project leader Chris Urmson, is still at large. But, word on the street is he’s working on some self-driving software that could give Google a run for its money.
Moral of the story:
Talent retention is an incredibly tricky thing to master. As Daring Fireball puts it: “Pay employees too little and they’ll leave. Pay them too much and they’ll leave.”
Oh, and you also have to make sure they feel challenged, fulfilled, and supported in their roles every day, otherwise guess what? (They’ll leave).