Business Can Pay to Train Its Own Work Force • Hacker News Board

Re: Business Can Pay to Train Its Own Work Force

#101

Post by yummyfajitas » Mon, Jun 22, 2015, 10:39 PM UTC

vectorjohn wrote: post #90

yummyfajitas wrote: post #71

Earlier quoted context omitted.

The other company without training could also be a nice place to work, and pay more as well. You are right that some employees might give "goodwill" to their employer. If such goodwill effects become sufficiently large, maybe employers will start offering training again. I guess you'll be encouraging employees to hold irrational feelings of loyalty towards their employers? As for the costs to employees, that is indee…

What incentive would an employee have to leave company A just because company B also offers the same "nice" salary and work environment. The advantage of offering the training in the first place is you GET the employees to come to you, then as long as they're compensated they will have no reason to leave after training is complete. It's a win-win for the employee and employer. You for some reason seem to hold the ide…

Scroll up for the arithmetic of how company B can pay more money to the employees.

Re: Business Can Pay to Train Its Own Work Force

#102

Post by notahacker » Mon, Jun 22, 2015, 10:48 PM UTC

vectorjohn wrote: post #96

notahacker wrote: post #62

Earlier quoted context omitted.

Their market value probably isn't $111k, hence their existing employer being unwilling to match competitors' salary offering for a trained member of staff and pick up the tab for the training.

If their market value isn't $111k, why would the competitor pay that?

Person currently earns $80k. Training costs $20k. Rival company will be willing to pay $90k salary after training to poach the developer, which means the current employer may end up forced to counter offer with $91k salary after paying for the training. 91k + $20k in training fees = $111k

Competitor does not pay $111k because competitor does not pay for training. Which was the entire point of the exchanges above

You could of course question why a company would train their employee at all if the market rate for an already trained member of staff was about $90k. Because retaining an existing member of staff at an $80k salary after paying $20k for their training happens to pay for itself after 2 years. Its quite sad I feel I have to post the calculation to avoid further downvotes, but its: (($80k * 2) + 20k)/2 = $90k

I honestly thought this was high school stuff....

Re: Business Can Pay to Train Its Own Work Force

#103

Post by vectorjohn » Mon, Jun 22, 2015, 10:49 PM UTC

yummyfajitas wrote: post #101

vectorjohn wrote: post #90

Earlier quoted context omitted.

What incentive would an employee have to leave company A just because company B also offers the same "nice" salary and work environment. The advantage of offering the training in the first place is you GET the employees to come to you, then as long as they're compensated they will have no reason to leave after training is complete. It's a win-win for the employee and employer. You for some reason seem to hold the ide…

Scroll up for the arithmetic of how company B can pay more money to the employees.

The arithmetic is wrong, unless it's just not fully explained.

"there is nothing stopping another employer from offering $90k in salary after training is complete"

Sure there is, and many people have pointed out the flaws in this comment. If $90k is the market rate, then there is nothing stopping the company that provided the training from paying that too, and there would be no more advantage to offering $90k. In addition, as others have pointed out, there will still be some ramp up time and training at any new company.

If your point is that the first company can't expect to under pay their employees after providing training, well, that's obvious and nobody suggested it.

Re: Business Can Pay to Train Its Own Work Force

#104

Post by notahacker » Mon, Jun 22, 2015, 11:07 PM UTC

jdmichal wrote: post #77

notahacker wrote: post #54

Earlier quoted context omitted.

If I've got a specific skill or qualification that's increased my market value to $90k, I'm not really sure why I'd be reduced to applying for entry level jobs and requiring training again in two years time? And there's a huge spectrum of on the job training, from pointless classroom exercises to tick company compliance boxes to highly expensive professional qualifications that might pay for themselves in two years i…

> If I've got a specific skill or qualification that's increased my market value to $90k, I'm not really sure why I'd be reduced to applying for entry level jobs and requiring training again in two years time? In other news, the huge demand for people who could efficiently work a loom has slacked greatly since the industrial revolution. (A snarky way of saying, training and the benefits and value it confers is a func…

Sure, but in anything resembling a competitive market I can't see any reason to believe a newly-acquired skill will hold its value less well in future if I move to a new company offering a higher salary because of it, as in the scenario proposed above.

Re: Business Can Pay to Train Its Own Work Force

#105

Post by yummyfajitas » Mon, Jun 22, 2015, 11:32 PM UTC

vectorjohn wrote: post #103

yummyfajitas wrote: post #101

Earlier quoted context omitted.

Scroll up for the arithmetic of how company B can pay more money to the employees.

The arithmetic is wrong, unless it's just not fully explained. "there is nothing stopping another employer from offering $90k in salary after training is complete" Sure there is, and many people have pointed out the flaws in this comment. If $90k is the market rate, then there is nothing stopping the company that provided the training from paying that too, and there would be no more advantage to offering $90k. In add…

So to keep the same set of employees, a company must pay $20k for training + $90k for employees = $110k. Alternately, a company can just pay $91k and let someone else pay for training.

Do you not see any reason why a company might prefer to be in the second category?

Re: Business Can Pay to Train Its Own Work Force

#106

Post by yummyfajitas » Mon, Jun 22, 2015, 11:36 PM UTC

anigbrowl wrote: post #75

yummyfajitas wrote: post #71

Earlier quoted context omitted.

The other company without training could also be a nice place to work, and pay more as well. You are right that some employees might give "goodwill" to their employer. If such goodwill effects become sufficiently large, maybe employers will start offering training again. I guess you'll be encouraging employees to hold irrational feelings of loyalty towards their employers? As for the costs to employees, that is indee…

I don't think it's at all irrational to have a feeling of loyalty one's employer if that employer actually supports one's economic interests to some degree. Even if one views people as pure utility maximizers, it doesn't follow that salary differential is the only measure of utility. There's a cost to quitting a job in terms of the simple disruption and effort to form new social relationships in the new workplace, no…

Provided the transaction cost of shifting jobs (which can include feelings of loyalty) is lower than the cost of training, any employee has the incentive to jump ship. I.e., if transaction costs are $10k but training costs $20k, then a poacher can steal your trained employees by offering $15k more.

I don't know why you think I'm disputing that transaction costs can cause markets to be inefficient - I agree completely. As a limiting case, if we punished quitting your job with death, shifting jobs would only make sense for the suicidal.

What, exactly, do you disagree with me about?

Re: Business Can Pay to Train Its Own Work Force

#107

Post by yummyfajitas » Mon, Jun 22, 2015, 11:38 PM UTC

kevin_thibedeau wrote: post #93

yummyfajitas wrote: post #41

Earlier quoted context omitted.

The shift away from pensions is caused mainly by laws (e.g. ERISA) requiring companies to properly account for them. Defined benefit pensions are both extremely expensive and very risky, but companies were allowed to hide these losses and risks off the balance sheets in the past. http://www.thedailybeast.com/articles/2013/03/15/sorry-folks...

The shift to 401K is more about the financial industry rigging the system so that they have more of other people's money to play with. Need a bigger slush fund? Lobby Congress to make pensions unfeasible through carefully constructed legislation and wait 10 years for the payoff to start rolling in.

Clearly, employers underfunding pensions and then going bankrupt causing retired employees to go broke was not a real problem.

Pensions were always unfeasible. ERISA simply requires employers to properly account for that.

Re: Business Can Pay to Train Its Own Work Force

#108

Post by vectorjohn » Mon, Jun 22, 2015, 11:39 PM UTC

notahacker wrote: post #102

vectorjohn wrote: post #96

Earlier quoted context omitted.

If their market value isn't $111k, why would the competitor pay that?

Person currently earns $80k. Training costs $20k. Rival company will be willing to pay $90k salary after training to poach the developer, which means the current employer may end up forced to counter offer with $91k salary after paying for the training. 91k + $20k in training fees = $111k Competitor does not pay $111k because competitor does not pay for training. Which was the entire point of the exchanges above You…

Nobody is asking how to add numbers together. I just think you're missing the point.

Whatever a competitor is willing to pay, the company that provided the training can just pay that and not risk their employees being poached. Additionally, it isn't free to poach employees, they will have training costs no matter what. In other words, after training you raise their salary.

Re: Business Can Pay to Train Its Own Work Force

#109

Post by vectorjohn » Mon, Jun 22, 2015, 11:41 PM UTC

yummyfajitas wrote: post #105

vectorjohn wrote: post #103

Earlier quoted context omitted.

The arithmetic is wrong, unless it's just not fully explained. "there is nothing stopping another employer from offering $90k in salary after training is complete" Sure there is, and many people have pointed out the flaws in this comment. If $90k is the market rate, then there is nothing stopping the company that provided the training from paying that too, and there would be no more advantage to offering $90k. In add…

So to keep the same set of employees, a company must pay $20k for training + $90k for employees = $110k. Alternately, a company can just pay $91k and let someone else pay for training. Do you not see any reason why a company might prefer to be in the second category?

No, I don't see any reason why a company would prefer to be in the second category. If you're in that category you'll be trying to hire employees for the same salary they're already being paid by an (intelligently run) company, in addition to having to retrain them for your company.

Re: Business Can Pay to Train Its Own Work Force

#110

Post by mathattack » Mon, Jun 22, 2015, 11:50 PM UTC

learc83 wrote: post #53

The worst class I had in college was Software Engineering. It was the university's attempt to prepare us for the work force, and it was taught by an adjunct who had plenty of industry experience, but it was already a 10 years out of date. Industry processes are mostly fads that change with wind. CS fundamentals however, are much more stable. 20 years from now knowledge of automta, graph theory, and complexity analysi…

The article isn't complaining about CS majors not getting jobs, it's about soft liberal arts majors not getting jobs.

When companies hired people for 30 year careers, they could afford to invest a tremendous amount in training. When they hire people for 2-3 years, they have less time to amortize the costs. And it's up to the employee to convince the companies that they can learn quickly, and on their own if need be.

Any CS major with decent grades and a positive attitude can learn anything in most any job. (Certainly CS, consulting, finance, marketing, even some kinds of sales) I can't say the same for liberal arts majors. There are great ones out there, but also a lot of folks who goofed off for 4 years and didn't learn anything.