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Is dot-com stress worth it?


June 15, 2000
Web posted at: 8:43 a.m. EDT (1243 GMT)

(IDG) -- A job at a pre-IPO start-up company used to be the hottest ticket in the high-tech industry. Now qualified job candidates are passing on dot-com opportunities in favor of more established technology companies that offer a stable work environment, regular hours, and a path to professional development.

With open positions far outnumbering the able bodies needed to fill them, qualified workers are looking hard at what they'll have to give up if they take on a job at a start-up. The upside is still strong: Companies often double or quadruple their stock prices when they offer shares to the public for the first time, making stock options worth hundreds of thousands of dollars in a single day. But to make it to the IPO, start-ups push workers to the limit, asking for long hours, a high degree of personal commitment and investment, and nonstop ingenuity -- all for the chance of someday striking it rich.

The fast-paced start-up environment used to be fun: pool tables, video games, and free food and drinks gave staffers a brain break during work hours, which often extended into evenings and weekends. But today many workers, especially young college graduates, are opting out of the dot-com rat race in favor of regular work hours, a career path, and training that a more established company can provide.

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According to a report conducted by, a career information Web site, fewer than 17 percent of graduating college students plan to pursue jobs at Internet start-ups, even though they rated Internet and dot-com companies the hottest industry today.

In a survey of more than 800 college seniors, students rated training, mentoring, and a supportive and stable workplace as their top criteria for evaluating employment opportunities, ahead of salary or stock options. In fact, graduating seniors rated 401k plans, health care, and annual bonuses as more important than stock options, which came in sixth out of a possible eight economic incentives. Training was the biggest draw of more traditional employers, beating out casual dress, an office, and weekends off.

Even among seasoned professionals, pre-IPO jobs are losing their appeal, and not just because of the drop some public Internet companies have seen their stock prices take in recent months, which depresses the value of employee stock options. Workers are waking up to the fact that working for a start-up can cost them dearly in unpaid overtime, personal relationship strain, and sacrificed hobbies, vacations, exercise, and other stress-busting activities.

The biggest reason people leave or pass up jobs at dot-com companies is that the environment is too stressful, says Jeffrey Kaye, a psychologist at Bridgeview Counseling Associates (BCA) in San Francisco. Many of Kaye's clients work at dot-com companies in the San Francisco Bay area and are struggling with the immense personal and professional commitment required to perform their jobs.

"The No. 1 problem facing dot-comers is the amount of commitment and time spent at these start-ups at the expense of the employee's personal life," Kaye says. "People make the sacrifice of putting the job ahead of relationships and personal health."

Young workers fresh out of college are at the greatest risk of dot-com burnout, because they often relocate after school, leaving their support network behind and having to adjust to a work culture lacking the social structure of a college or university. For those who move to Silicon Valley or the San Francisco Bay area, finding an affordable place to live is an added headache, especially because start-up salaries are typically lower than those of more established companies.

"They're isolated from normal sources of support, struggling, seeing a good portion of their income go to rent," Kaye says. "Their private lives get put on the back burner."

The result for many can be severe depression and anxiety caused by stress and its fueling factors, Kaye says. Often, the promised IPO payoff doesn't materialize, further disillusioning workers who expected to become millionaires overnight.

"There is a great gap between expectations of those who go to work for dot-coms and the realities they soon discover," Kaye says. "But they want to be seen as a person who can work long hours and not seem affected. What I see is panic attacks and depression, and that can seriously affect work performance."

The hierarchy of stress

Start-up stress is not reserved for middle management or entry-level positions. Often these companies move at a blistering pace, on tight deadlines, with skeleton staffs and dwindling budgets. That spells trouble meeting deadlines and launch dates, keeping ahead of the competition, and attracting and maintaining qualified staff.

Not being able to hire and retain enough quality employees can be a tremendous burden on any company, and the high-tech industry has a severe shortage of skilled IT administrators and programmers to make the nuts and bolts of technology companies and their products work.

"It's very hard to find good people to expand and build the team," says Jeff Ungar, CTO at, in New York. "There is just too much to implement, and you need to do what requires a thousand people with only 30. That puts a lot of stress and expectations on the team."

Dot-com companies are now realizing the significance of these drawbacks: Hiring employees is more difficult now that working for dot-com companies isn't perceived as all fun and games and that the payoff is risky. Furthermore, the available pool of talent is young and unproven. Separating the good from the bad is difficult at any level, and companies need to evaluate candidates carefully to make sure they fit the job.

"There are people who have the credentials and are really good, and people who have the credentials and are no good," says Andrew Condon, CTO at Iona Technologies, in Waltham, Mass. "But it's really hard to tell the difference."

Give them a break

Young workers are a greater risk than more experienced professionals because they are more susceptible to the stresses of working at a start-up, including high expectations, unrealistic deadlines, and unrelenting pressure to perform. To combat these on-the-job hazards and alleviate burnout, savvy managers are encouraging all workers to get away from their desks more often.

David Zach, a consultant and principal at Innovative Futures, in Milwaukee, says that smokers and coffee drinkers have the right idea in taking frequent breaks on the job. "More and more people are going to coffee, taking more smoking breaks," he says. "There's a natural human need to get out and have some conversation that is not work-related."

BCA's Kaye agrees that breaks are absolutely crucial.

"Many times workers work very closely to each other in the 'cube' environment, and that is very stressful because it's noisy, there's little or no privacy, and there is a forced conviviality," Kaye says.

Working out is a healthy alternative to smoking or coffee breaks, and many businesses provide on-premises gyms or offer discounted gym membership programs to workers.

Alleviating burnout

The good news is that start-ups are still the most dynamic, innovative workplaces out there. And for experienced workers,the stress of a start-up may be just the challenge they need after proving themselves at a more established company. Avoiding burnout at start-up is just a matter of knowing your abilities and limitations, and communicating concerns to employers up front. Finding a company with a smart executive management team is a good start, because savvy, responsive leaders can create a work environment that is conducive to teamwork and values each individual's contribution. Moreover, strong managers are more effective at managing their employees' time and keeping workloads reasonable.

"A smart team doesn't get as much work put on it because the team leader makes smart decisions early on," says Ramana Rao, CTO at Inxight Software, in Palo Alto, Calif. "The good team leaders and first-level managers can manage people and not stress people out."

Being an effective manager is more than making good decisions quickly, or exhibiting leadership skills, says Michael Mosquito, CTO at, in Atlanta. Part of a manager's job is to keep information flowing between the manager and employee, opening free discussion and building trust.

"You can give them toys in the office, but you must spend time with them, listen to their concerns, and do things with them," Mosquito says. "Most of all you need to tell them they are doing a good job."

It's not all for money

Companies need to provide an incentive for employees to remain emotionally engaged during stressful times, one analyst says.

"We're going to reach the point where accomplishment has to come from something other than the IPO," says Diane Tunick Morello, an analyst at Gartner, in Stamford, Conn. "They have to see something: A product gets accepted, it gets good press, it becomes well known, etc. They need to feel a sense of accomplishment."

Without that reward, workers lose their motivation and the ability to cope with stress.

"I think what actually happens is not that people cannot handle [the stress]," Tunick Morello says. "They just refuse to do it."

Stress management is a two-way street. Employers need to make allowances where they can by relaxing dress codes, allowing telecommuting, and giving personal days to workers who need to recuperate from long workweeks. Workers are responsible for managing their own stress levels, remaining engaged and productive on the job, and communicating their concerns to managers to come up with solutions before a crisis arises. Often burnout comes from employees' own unrealistic expectations of what they can achieve.

"We are obsessed with work, and it's because we are so good at it that we are kind of seduced into it," Zach says. "But a lot of this is, 'Physician, heal thyself.' There are simple actions they can take. [Employees] need to address the problem."

    Calming dot-com chaos
  • Problem: Unrealistic expectations of job commitment
  • Solution: Establish roles and expectations up front with employers. Consistently guard and uphold free time.
  • Problem: Long work hours
  • Solution: Maintain perspective and take breaks.
  • Problem: Difficulty hiring people
  • Solution : Take the time necessary to get the right person. Finding qualified candidates is the best way to get help quickly and lighten everyone's load.
  • Problem : Unrealistic expectations of job performance, unreasonable deadlines
  • Solution : Don't be afraid to fail. Communicate with supervisors as problems arise and suggest solutions.
  • Problem : No escape from pressure or stress
  • Solution : Take a personal day to recharge. Minimize the work you do from home, and make time for a social life.

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