Talent Neuron Newsletter 5

1. Talent Neuron Weekly Digest
May 16th 2013
Employee 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, free
meals, 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
2000
If 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 Designers
Over 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
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 7
percent, about 4 percent more than the industry average.
The graph below indicates the expected salary trend for UI/ UX designer:
From Neuron Lab
Talent 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 newer
and 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
Snip.it.
The acquired startups have
been shut down and their
technology has been
integrated with Yahoo!’s

2. 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 Leaders
Organization Restructuring Focus - Electronic Arts
Electronic 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 company’s 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 gaming
talent 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.
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
mobile products. Talent
Neuron research reveals
that with these acquisitions
over 65 entrepreneurs and
innovators have joined the
company’s 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 technical
training 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.
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

3. 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.
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
contact
info@talentneuron.com |
www.talentne