Ask HN: Why firms don't train workers anymore

#1

Post by stevejobs » Sat, Sep 18, 2010, 9:43 PM UTC

Some economists cite structural factors as to the reason why unemployment has persisted at these elevated levels around 10%. By structural they basically mean job mismatch: workers who have skills in one area are in surplus even though there are jobs in demand, though they require a different set of skills. One way to rectify this predicament is to have firms more willing to expand their applicant pool and train those they do hire for those jobs.

It has become common wisdom in hiring that firms would rather leave a position unfilled than recruit someone who didn't fit the job requirements. A new hire must hit the ground running so-to-speak and therefore he should not expect much handholding on the part of the employer. So, if you are not a perfect match and can't already do everything stated in the job description, don't expect to get a call back.

I wonder why this move away from on-the-job training has taken place. It used to be that firms would accept a wider range of applicants after screening for basic intelligence, competence, and ability. They would take their new recruits and train them for upwards of several months. After successfully completing the training, the new employees would be ready to take their place alongside their fellow co-workers. This training not only produced better employees, it also engendered more loyalty as workers could see the firm invest time and money into them and would reciprocate with their work effort.

Now, it seems like most firms give new employees at most a few days to become acclimated with them and most of that time involves processing employment paperwork for the new worker. Since, the worker cannot expect to be trained by the firm in any meaningful way, one shouldn't expect much loyalty from him should a better opportunity arise.

One reason given as to why firms have reduced their training is because they fear that after investing in the worker, he might just bolt to a competitor which may reward him with better pay because it didn't have to budget for training. However, to take that POV, you must assume that workers are only satisfied by more money, when there are multiple factors that workers take into consideration when deciding on where to work, including how the firm treats them initially.

Re: Ask HN: Why firms don't train workers anymore

#2

Post by ggchappell » Sat, Sep 18, 2010, 10:27 PM UTC

> I wonder why this move away from on-the-job training has taken place.

> One reason given as to why firms have reduced their training is because they fear that after investing in the worker, he might just bolt to a competitor which may reward him with better pay because it didn't have to budget for training.

The underlying reason for this situation is a good question. While I don't know the answer, it should be noted that, once we have such a situation, it tends to be self-perpetuating. Workers have no incentive to be loyal to companies that won't be loyal to them, and vice-versa. The first one to try being loyal to the other, will often get burned.

So dealing with these problems means that we have to fight not only the underlying reasons for the situation, but also the self-perpetuating characteristics of the situation. Not easy.

Another note: HN has generally been rather down on the tenure system in American universities. While I agree that tenure has its problems, it does address some of the troubles you point out. Universities and professors (excepting those with temporary appointments) seem to me to be much less afraid to invest in each other than modern businesses and their employees are. Eliminating tenure may very well give significant benefits to universities; however, it also introduces the kind of problem that you are discussing.

EDIT: Still another note: A recent post (I think it was on HN) discussed alleged secret agreements among various tech companies to avoid hiring each other's employees. This is yet another unfortunate outgrowth of this situation.

Re: Ask HN: Why firms don't train workers anymore

#3

Post by wccrawford » Sat, Sep 18, 2010, 10:29 PM UTC

Well, for programming, employees without experience generally slow down the existing employees and rarely turn into good workers.

Let's examine the typical job applicants to see why:

1) Has experience, resume and portfolio.

2) Has no professional experience, but has worked on open source projects and has a nice portfolio.

3) Has no professional experience and hasn't worked on open source. Has a personal portfolio that's pretty basic.

4) Has no experience at all. Has education.

5) Has no experience of eduction.

1 has shown ability to do the work in the past. Will hit the ground running and is generally a good hire.

2 and 3 have shown not only that they know how to program, but they are self-driven and don't need someone to tell them to what to work on. Will also hit the ground running and are often a good hire. 3's sometimes disappoint as they get in over their heads pretty quickly.

4 and 5 have shown no ability or drive. They haven't even attempted to program anything they were specifically told to. There is no chance they will hit the ground running, and it's unlikely that they will have any innate ability.

Why on earth WOULD people hire 4s and 5s?

In short, non-technical professions hire people and train them all the time. Nobody is born knowing how to flip burgers and fry fries at the same time. But technical professions rarely get anywhere hiring anyone that doesn't have experience of some kind.

Re: Ask HN: Why firms don't train workers anymore

#4

Post by _delirium » Sat, Sep 18, 2010, 10:35 PM UTC

I think there's still significant on-the-job training for technical areas other than programming. Aerospace engineering firms want an engineering major to have learned the basics of what engineering is, and have a solid grasp of the relevant mathematics and physics fundamentals, but they don't expect anyone to come in ready to work on a particular airframe or engine or whatever. They expect to train people in their particular software packages, design philosophy, methodologies, huge catalog of existing designs, ongoing studies, etc.

One recruiter from a big engineering company who I talked to as an undergrad said that they preferred applicants who didn't have too much specific experience exactly on target, because then they'd just have to un-learn what they'd learned in order to get integrated into his company's way of doing things, since big engineering firms have often accumulated decades of in-house practices, which vary a lot between companies.

Re: Ask HN: Why firms don't train workers anymore

#5

Post by fierarul » Sat, Sep 18, 2010, 10:54 PM UTC

Well, you assume that training actually produces results. It might well be that after spending considerable time and money on the new employee he's still not a very good match for the original tasks. Then you are stuck with a loss and an employee you can't fire (since, for example, the 'testing' period is something like 2-4 weeks -- this might depend on the country/state, etc.).

Or, training does work but the investment is usually so big (not just on the trainer but the lost productivity of the team members involved) that the employee would need to stay employed a number of months/years at least, to recuperate costs. So if the employee resigns before that (since he gets a better offer) you are still in the red.

I've personally had people work for me that didn't actually fit the task, but only because they were quite smart and I was certain they could pick up the domain (any domain) quite fast.

But right now, for example, I'm looking at CVs of student candidates and I'm reluctant to invest in their training because I have a small company and the risk of them leaving after they are trained is high.

Re: Ask HN: Why firms don't train workers anymore

#6

Post by trevelyan » Sat, Sep 18, 2010, 11:18 PM UTC

As far as I'm aware from the economics blogosphere, arguments about "structural unemployment" are popular these days mostly in right wing think tanks. And they only seem popular there because hypothesizing that there are tons of jobs available for the unemployed permits one to reject Keynesian/Monetarist prescriptions for further fiscal/monetary stimulus.

I haven't run into any serious economist who believes in the idea, and certainly haven't read any proponents of the idea who are able to justify why this rate is allegedly 5-6 percent higher now than two years ago, or at pretty much any previous point in American history for that matter.

I wouldn't mind talking about this if others are interested. To me, the simplest evidence that this argument is dishonest is that its proponents don't seem to be acting consistently with their beliefs. If they really are right that the natural unemployment rate has risen, any further stimulus or monetary expansion will result in significant inflation which will need to be headed off by the Federal Reserve, and which would permit the organization to divest itself of its fairly risky mortgage-backed securities in the process. And this would be a zero-risk way to drive a stake through the heart of pretty much every left-leaning empiricist out there too....

Re: Ask HN: Why firms don't train workers anymore

#7

Post by charlesju » Sat, Sep 18, 2010, 11:18 PM UTC

wccrawford wrote: post #3

Well, for programming, employees without experience generally slow down the existing employees and rarely turn into good workers. Let's examine the typical job applicants to see why: 1) Has experience, resume and portfolio. 2) Has no professional experience, but has worked on open source projects and has a nice portfolio. 3) Has no professional experience and hasn't worked on open source. Has a personal portfolio tha…

We've been on a hiring binge recently so I'll shed some light into my thought process:

1. Can be a mismatch because they are too "corporate" for a startup, ie. unwilling to work outside the 9-5.

2. Open Source people can be weird and only want to work on what they are passionate about. This isn't always the case at a company.

3-5 has their own downsides.

What we quickly find is that none of the above are true criterions for hiring, this is what we usually look for?

1. Do they have passion for what we're doing (Games)?

2. Are they technically sound (they do well on our little programming tests and in-person interviews)? This is pre-screened by either having previous experience or coming from a stellar school with good marks.

3. Are they going to fit in?

Re: Ask HN: Why firms don't train workers anymore

#8

Post by bostonvaulter2 » Sat, Sep 18, 2010, 11:22 PM UTC

wccrawford wrote: post #3

Well, for programming, employees without experience generally slow down the existing employees and rarely turn into good workers. Let's examine the typical job applicants to see why: 1) Has experience, resume and portfolio. 2) Has no professional experience, but has worked on open source projects and has a nice portfolio. 3) Has no professional experience and hasn't worked on open source. Has a personal portfolio tha…

What would a programmers portfolio look like?

Re: Ask HN: Why firms don't train workers anymore

#9

Post by stevejobs » Sat, Sep 18, 2010, 11:33 PM UTC

fierarul wrote: post #5

Well, you assume that training actually produces results. It might well be that after spending considerable time and money on the new employee he's still not a very good match for the original tasks. Then you are stuck with a loss and an employee you can't fire (since, for example, the 'testing' period is something like 2-4 weeks -- this might depend on the country/state, etc.). Or, training does work but the investm…

Why do you fear an employee would leave you after you invested in training him? Unless you are particularly abrasive, most employees would look favorably at an employer who helps them advance in their job than one who doesn't invest anything at all.

Re: Ask HN: Why firms don't train workers anymore

#10

Post by thaumaturgy » Sat, Sep 18, 2010, 11:34 PM UTC

I'm a more "traditional" type of employer -- I have technicians, they go to homes and businesses, they set things up and solve problems, and I don't mind hiring under-experienced techs so long as I think they're willing to learn.

I have a pretty good hunch why a lot of businesses aren't interested in doing this anymore: there is an extreme amount of external pressure not to do it. If one of my techs doesn't know how to do a particular thing right away, the client doesn't want to hear that. Instead, they want to hear that I'll give them a discount on the tech's time. If the tech makes a mistake, I have to cover the costs for making up for it. Even if a tech knows how to do something, but they're just out-of-practice at it, and they take 3 hours to do something that I could do in 1, I probably won't bill the client for a full 3 hours.

It creates a hardship on the business. The culture around the customer-business relationship in the U.S. has changed from the stereotypical 50's ideals to one where the lower price usually wins, and if you're competing on price, you can't afford to train people.

It doesn't help that there are an awful lot of people out there now that seem to think that they're worth a lot of money even if they don't know how to do a job. Go ahead and try telling a potential employee for a technical position, "Well, you're not familiar with any of this, but we're willing to train you if you're willing to start at $10/hour". Unless they're in high school, it probably won't fly.

Or, as another anecdote: one of the things that my business offers its clients is professionalism. Techs are supposed to show up polite, friendly, clean, and dressed for business casual. Repeatedly nagging my techs about their appearance hasn't helped; they still show up with bed hair, with cargo pants, with t-shirts not tucked in, despite that I pay them better than any of my competitors. I'm gonna have to get mean about this soon, and that makes me a little sad.