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HR/BENEFITS

Did Steve Jobs Lower Your Salary?

Google and Apple colluded to help keep salaries low in the Valley. Now your own workers may be affected.
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For years, Google and Apple had a gentlemen's agreement not to poach one another's employees. But now that a class action lawsuit has been filed claiming affected tech workers deserve $9 billion in total--that's billion with a B, not an M--it's clear this wasn't just a Google and Apple thing but something much bigger. Tech companies like Intuit and Pixar were also named in the suit, and now everyone is panicked, as they should be. 

Yes, high salaries are a concern for any business, especially startups. And if the free market had been functioning, Silicon Valley salaries may have soared higher than they already have, making it even harder to secure top-notch talent. But it's also likely higher Silicon Valley salaries would have had another result: talent moving to other regions.

Already, up-and-coming tech hubs like San Diego, Denver, and Austin beat out San Francisco as the best places for startups in 2014, according to Forbes. So there's no telling what that list would look like today if Steve Jobs hadn't told Google, "If you hire a single one of these people that means war."

By the way, this wasn't a casual comment made at a tech fair. This was his company's human resources policy. The New York Times relates the content of several of these emails such as this one from Apple HR:

"Please add Google to your 'hands-off' list. We recently agreed not to recruit from one another so if you hear of any recruiting they are doing against us, please be sure to let me know."

Meanwhile, Google CEO Eric Schmidt said he wanted to stop discussing this subject over email, as he was concerned about the legal repurcussions. Let's be honest, what would a jury infer from such a comment? That you were knowingly engaging in illegal activity.

In your own company, the desire to control your external environment is important. After all, this saved Google, Apple, and the other companies involved a boatload of cash by keeping salaries low (relatively speaking). But the expected payout, should the plaintiffs prevail in this lawsuit, will be just as high.

If you want other companies to keep their hands off your employees, the best way to do so is by being a great employer. This means offering competitive salary and benefits, no doubt, but it also involves not being a jerk, offering great opportunitiesrespecting employees' differences, and perhaps even offering free lunch.

You can go the free-market suppression route, but even Google isn't too big to fail (or lose a lawsuit, though it will take time before things come to light). 

IMAGE: Getty Images
Last updated: Apr 9, 2014

SUZANNE LUCAS | Columnist

Suzanne Lucas spent 10 years in corporate human resources, where she hired, fired, managed the numbers, and double-checked with the lawyers.

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.



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