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Talent Neuron Weekly DigestMay 16th 2013Employee Benefits:
Proposed Tax Changes and
Implications
The intense competition for the highly skilled tech talent
especially in the
Silicon Valley has compelled companies to provide innovative
perks and
benefits to its employees. These perks range from telecommuting,
freemeals, free/subsidized massage services, hair cut, to child
care benefits etc.However, these benefits may not come free anymore
as Internal Revenue
Service (IRS) is considering taxing some of the fringe benefits
such as free
meals and child care. Currently, these benefits are considered
to be non-
compensatory, and therefore non taxable.The above stated
proposed change can be attributed to the following two
reasons :- All the employee benefits are paid out of pre tax
dollars In US, employee benefits today account for about 19.8
percent of
the total compensation as compared to 16.6 percent in the
year
2000If taxes are imposed on free meals then employees could end
up paying tax
for extra USD 3000 - 5000 annually, assuming the average market
value per
meal to be between USD 5 -10.Employers who want to keep their
employees motivated are of the opinion
that the non- cash benefits should not be taxed. In addition, as
the marginal
taxes are pretty high, employers cannot substitute these
benefits with higher
salaries.
Cost Trends- UI/ UX DesignersOver the last two years, the demand
for UI/ UX designers has witnessed an
increase. The user experience industry has become a hot place to
work with
the increasing client side mobile applications, online
advertisements on
social networking site and increased number of e-commerce sites,
shopping
From Neuron LabTalent Neuron is working on
incorporating wage inflation
trends under Total Cost
Simulator. By using this
feature, our clients will be
able to understand a 7- 10
year wage inflation trends
by domain and by function
Key Acquisitions
Yahoo!s business strategy is
focused on increasing its
breadth of offerings in the
mobile space and drive
revenues through mobile
advertising. To bring newerand innovative mobile
applications faster to the
market, company has
added top engineering
talent through acqui-
hiring.
Yahoo! has recently
acquired three more
startups in the mobile space
namely GoPollGo (a web
and mobile based social
polling app), MileWise
(personalized flight search
app) and Loki Studios
(location based game,
Geomon). Since 2012,
Yahoo! has acquired 10
startups accounting over
USD 70 million. Other recent
acquisitions include Astrid,
Summly, Jybe, Alike and
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carts etc.The number of job openings for UI/UX developers in US
is expected to
double in 2013 ( Source: Talent Neuron Skills Search). In 2012,
there were 50
percent more job openings (for for UI/UX developers role)
compared to
2011.In 2013, the salaries of UI/UX designers are expected to
increase by 7percent, about 4 percent more than the industry
average.
The graph below indicates the expected salary trend for UI/ UX
designer:
Note: Salaries indicated is for a resource with 0-3 years of
experience. Software industry average refers
to salaries of resources with skills in software development
such as Java, .NET etc.
Source: Talent Neuron Skill Framework, discussion with HR
Executives and LeadersOrganization Restructuring Focus - Electronic
ArtsElectronic Arts is consolidating its operations through
organizational
restructuring. The company recently downsized its employee count
by about
10 percent (about 900 employees) in Los Angeles and Montreal.
The previous
downsizing in headcount happened in 2010 when 1200 (or 15%)
employees
were laid off. EA has also shut down its Popcap and Quicklime
studios in
Vancouver in 2013.
The companys focus has been to shift away from producing console
games
to free-to-play gaming. By 2015, the market for free-to-play
gaming is
estimated to account for USD 15 billion.
From a skill supply standpoint, there has been an influx of
mobile gamingtalent in the market which is being effectively
leveraged by competitors. The
Talent Neuron Skill Framework data provides the following
insight on the
talent flow from EA to other major competitors in Vancouver and
Los
Angeles.
Snip.it.
The acquired startups have
been shut down and their
technology has been
integrated with Yahoo!s
mobile products. Talent
Neuron research reveals
that with these acquisitions
over 65 entrepreneurs and
innovators have joined the
companys mobile
engineering teams in
Sunnyvale and New York in
the last 12 months.
Country Spotlight -Chile
With more than 500 IT
companies, Chile is one of
the preferred outsourcing
destinations in Latin
America. In 2013, the IT
industry in Chile is expected
to grow by 13-15 percent.
Also, the availability of
bilingual talent has attracted
companies like CSG, IBM,Shell, Sitel and Atento to
set up contact centers in the
country.The average software
development salaries in
Chile are about 9 percent
lower than that of Brazil, but
54 percent higher than the
salaries in Argentina.
There are about 58
universities and 60 technicaltraining institutes in the
country which produce a
fresh talent pool of 55,000
graduates annually suitable
for ICT industry.The government offers tax
credits to promote
innovation and employment
in the areas of technology.
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Is Facebook Facing Executive Brain Drain?
Our research indicates that in the past one year, Facebook has
witnessed 16
executive moving out of the company, of which 8 executives held
the
engineering leadership positions (product heads, SVP, etc.)
whereas 6 of them
held non- engineering positions. Former executives of Facebook
have either
started their own entrepreneurial ventures (Quip, Startup tbn)
or joined other
startups (Drop Box etc.) or other social networking companies
like Quora and
Pinterest.
Facebook recently reported that, Bubba Muraraka, Head of Product
for
Android, is leaving the company to join a Silicon Valley venture
capital firm
Draper Fisher Jurvetson as general partner and managing
director. Another
Facebook executive, John Hegeman, Director of Engineering for
Ads, quit the
company to join Quora.
About 100 former employees of Facebook, who have worked in the
company
for at least two years in various roles, have their started
their own ventures.
City Spotlight - Santiago, Chile
There are about 150 IT and BPO companies in the city and over
18,500
professionals employed in the ICT sector. Santiago has 14
universities
which generate a fresh talent pool of 36,000 graduates every
year suitable
to be employed in the ICT sector. 3000 of these graduates are
skilled in
work in software development domain.The city has an installed
talent of 1,600 engineers working in software
development, of which 13 percent are skilled in mobile
development and
web technologies.
Companies such as Yahoo!, Equifax, Citigroup, and IBM have set
up centers
in Santiago. Yahoo! has about 30 engineers working on search
technologies
and data mining. Equifax has about 50 engineers at its center in
Santiago,
developing analytical software and algorithms to analyze the
financial data.
Companies involved in
innovation can obtain a tax
benefit up to 35 percent
spent on R&D. In addition,
the University of Chile is
building a Technology Park
with over 1,000 hectare
space.However, with only 15
percent of the talent with
English speaking
capabilities, companies find
it challenging to scale up
their operations and build a
center employing more than
300 engineers.
For more information, please
[email protected] |
www.talentne
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