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Business Can Pay to Train Its Own Work Force

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Re: Business Can Pay to Train Its Own Work Force

#111
As a lib arts graduate, I might be biased, but I believe that it's still the best education for the type of decision-making that's most useful in real-world business decisions: ambiguous and incomplete information from a variety of sources with competing interests.

That being said, if you're not in a leadership position that kind of decision making isn't what you're doing: you're most likely just optimizing on your own little anthill, so a "profit-centered" education like the article is against might make sense for the worker bees.

Another thing that I think is usually missing from the "train your workers" debate is how much variance there is in productivity, and how actual productivity is usually unknowable unless you have 2-3 months of project data for a given worker (these are assumptions). So hire unskilled contract workers, fire 80% of them, and then train the remaining 20%. They won't have the credentials to work elsewhere, and you've been able to identify the true all-stars using data on their actual work product.

Re: Business Can Pay to Train Its Own Work Force

#112

Earlier quoted context omitted.

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.

>I don't see any reason why a company would prefer to be in the second category.

The 2nd company doesn't have to bear the costs for training.

>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,

For the first company, it doesn't matter how much they (intelligently) increases the salary because they still have to add in the expense of the training.

>, in addition to having to retrain them for your company.

Not necessarily. A common example would be IT consultants. It is very common for Oracle and SAP have their consultants spend 4 to 8 weeks of training and then boutique firms would poach them with higher salaries. The boutique firms didn't have to pay the $20k to $40k for the 8 weeks of classes and they also don't have to retrain them. The Oracle DBAs' skills are ready to be put to use on day 1.

If one thinks Oracle/SAP can simply increase the salary to what the boutique firm was offering, the math doesn't always work out because the total higher compensation has to include the training they already paid.

If we use following placeholders:

s=salary, t=training, i=increase to market salary rate

Category 1 company total expense = s+t+i

Category 2 company total expense = s+i

Because "t" was a non-zero amount that can't be magically erased, it means that for all values of "i", "s+t+i > s+i"

In other words, for Category 1 company to "match" a higher Company 2 salary, they must always pay more than that salary because the "pay more" includes the training $$$ they paid.

Hopefully, for Company 1, they have other non-monetary advantages that outweighs the absolute mathematical disadvantage the above equation shows.

Re: Business Can Pay to Train Its Own Work Force

#113

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?

Companies in the second category are going to be in the market for lemons. Company A has inside knowledge of how each employee is performing and can easily match a price increase for employees that are worth it while letting go of those that aren't. Company A is paying a bit more to purchase an option on skilled employees, Company B is hoping that they don't just get lemons.

Re: Business Can Pay to Train Its Own Work Force

#114

For the most part, bonding agreements ("you can't leave for X years without repaying us for your training") are considered exploitative and usually not legally enforceable. As a result, a business can't pay to train it's own work force - if a business invests $20k in training and $80k in salary, there is nothing stopping another employer from offering $90k in salary after training is complete. If an investment can't…

I remember some motivational poster from my old tech recruiter's FB feed that seems appropriate here:

"What if we invest in training and our employees leave?"

"What if we don't, and they stay?"

Re: Business Can Pay to Train Its Own Work Force

#115

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?

Of course companies will offload training costs on taxpayers or individuals whenever possible. It's the in the "nature" of capitalism to maximize profits and mimimize costs. It used to the government and the state that provided balance but now it's implicitly, if not explicitly, accepted that business has "won" and calls the shots. The state's roll now is to further the interests of business.

This is great if you're an employer but what are the consequences of shifting from a capitalist economy to a capitalist society? There is more to a successful society than increasingly desperate and ruthless competition for a shrinking pool of jobs. How many people want to spend their entire working life in a cage match for survival hoping that they are one of the lucky few who make to the billionaire's club? If government isn't going to represent the people what's the point of having one?

The standard retort from market fundamentalists (and it is a faith) is to reframe the debate as capitalism vs. socialism, or argue that the market is as natural as breathing and we have to let it do what it must. The first one is straw man argument; not many people are arguing in favor of a Marxist paradise. And the market as a system of nature is simply delusional. A market economy is fine, most people agree on that. The problem is when the market model invades every last aspect of society and opposition is neither mon-existant or rendered impotent. The end result is a dictatorship of market fundamentalism. Kind of a capitalist version of the Soviet Union where the Communist Party is replaced by oligarchs and the lowly worker is replaced by the lowly worker version 2.0. IOW, post-industrial feudalism. Is that what "the people" want? Something tells the answer is "no, they absolutely do not."

Re: Business Can Pay to Train Its Own Work Force

#116

For the most part, bonding agreements ("you can't leave for X years without repaying us for your training") are considered exploitative and usually not legally enforceable. As a result, a business can't pay to train it's own work force - if a business invests $20k in training and $80k in salary, there is nothing stopping another employer from offering $90k in salary after training is complete. If an investment can't…

"As a result, a business can't pay to train it's own work force."

I believe in Germany consortiums of businesses in the same industry subsidize training. Seems reasonable.

In any case, your observation would seem to be refuted by the fact that businesses in general used to do precisely that, and many businesses still do do precisely that.

"Having employees pay for (and be compensated for) their own training is the most reasonable workaround."

For the business, maybe.

Re: Business Can Pay to Train Its Own Work Force

#117
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…

I think it's a fallacy to assume that anything not based in CS fundamentals is a fad or has only short-term value.

In college, I didn't learn version control, continuous integration (continuously submitting your work in small changelists or patches), unit testing, making sure you're building the right product before building it, delivering the simplest possible code and design that meets the requirements, code quality, working in teams, untangling dependencies and making as much progress as possible today without waiting for all your dependencies to be resolved, and so on.

I expect that all these skills will be very much relevant 20 years from now. So, don't confuse long-term value with "grounded in CS fundamentals". Programming isn't a hard science like physics.

Re: Business Can Pay to Train Its Own Work Force

#118

For the most part, bonding agreements ("you can't leave for X years without repaying us for your training") are considered exploitative and usually not legally enforceable. As a result, a business can't pay to train it's own work force - if a business invests $20k in training and $80k in salary, there is nothing stopping another employer from offering $90k in salary after training is complete. If an investment can't…

There's no reason why they would pay $80k in salary if they're not getting enough expected value.

Until a new programmer is making minimum wage, there's always a point at which companies can employ them for less, and hope their value (plus expected value from the ones who stay on at a higher wage) will be more than the costs of training.

Also, training is often domain specific. Employees are generally worth more to their employer than a competitor (though there are exceptions).

Re: Business Can Pay to Train Its Own Work Force

#119
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…

I think it's a fallacy to assume that anything not based in CS fundamentals is a fad or has only short-term value. In college, I didn't learn version control, continuous integration (continuously submitting your work in small changelists or patches), unit testing, making sure you're building the right product before building it, delivering the simplest possible code and design that meets the requirements, code qualit…

>I think it's a fallacy to assume that anything not based in CS fundamentals is a fad or has only short-term value.

I didn't say that. I said most industry processes are fads. I also didn't say that nothing that isn't grounded in CS fundamentals has long term value.

There are plenty of other skills that have long term value. Office politics, salary negotiation, self-promotion are much more valuable than knowing how to run a few git commands. But non of those things should be taught in a Computer Science program.

They are fundamentally vocational skills. Just like version control, unit testing, and continuous integration are vocational skills. Sure they're useful but they should be taught in an internship/apprenticeship or on the job.

>In college, I didn't learn version control...

I learned to use subversion, and other than the fact that they are are both version control systems, what I learned didn't really carry over to distributed version control like Git.

In a CS program you should be learning things like how to implement a version control system, not how to use Git. I would have been pissed paying thousands of dollars per semester for a professor to walk me through a Git tutorial.

I don't have a problem if a professor wants you to use github to submit your assignments or something like that. And sure some of the vocational skills you listed are going to be useful for years to come. But these skills should be ancillary. They should be just a happy side effect--like learning teamwork during a group project.

Re: Business Can Pay to Train Its Own Work Force

#120

For the most part, bonding agreements ("you can't leave for X years without repaying us for your training") are considered exploitative and usually not legally enforceable. As a result, a business can't pay to train it's own work force - if a business invests $20k in training and $80k in salary, there is nothing stopping another employer from offering $90k in salary after training is complete. If an investment can't…

"As a result, a business can't pay to train it's own work force - if a business invests $20k in training and $80k in salary, there is nothing stopping another employer from offering $90k in salary after training is complete."

Except for the massive information asymmetries in the market.

Even ignoring the information asymmetry, hiring a new employee is expensive. You can easily end up paying 40-50k to hire a good developer (as a combination of the recruitment process and ramp up time).

So really company B is paying salary + $40-50k recruitment. This means company A can easily match company B as well as provide training.

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