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Monday - May 29, 2000

In Silicon Valley, Loyalty Means Paying a High Price

According to the New York Times:

"In November, more than 100 employees of Calico Commerce were millionaires, at least on paper.

Today only 20 are. As Calico's stock has fallen 80 percent from its November peak, the rest have watched their fleeting wealth burn away like fog in the California sun. In April alone, Calico shares lost nearly half their value.

In Silicon Valley, where job hopping is a way of life and even robust companies regularly lose workers to start-ups dangling chances at instant wealth, a stock meltdown like Calico's might seem a recipe for disaster, prompting top employees to flee and crippling morale among those who remain.

But Calico, which makes software that helps companies sell products over the Internet, has weathered the storm so far, thanks to an intangible commodity that is supposedly even scarcer around here than out-of-work software engineers: the striking loyalty of its workers.

So far this year, only 15 of Calico's 330 workers have left the company. That translates into an annual rate of 12 percent, barely half the typical turnover at Silicon Valley companies, according to Steve Radford, who has surveyed salaries and turnover at high-technology companies for more than two decades.

Calico's stability is no accident, employees say. While many Silicon Valley companies depend largely on the promise of riches to attract and retain workers, Calico has gone a different route, using more than money to keep employees happy. The company tries to combine the openness and workplace perks common in Silicon Valley companies with the very uncommon understanding that employees sometimes have lives outside the office.

So far, the mix seems to be working..."

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