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The Strategic Imperative Not to Hire Anybody

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Re: The Strategic Imperative Not to Hire Anybody

#11

Post by ovi256 »

kg wrote: post #8
emmett wrote: post #3

Very similar to the arguments of the Luddites: The power loom is putting workers out of a job! Some attempt to do something which gets the unemployed back to work could be good, but trying to create make-work by using more people than a job requires is not.

I'm definitely not in favor of creating needless jobs, and companies that can be creative and do more with less in a sustainable fashion (without creating a poor quality of life for those doing it) should be rewarded. That being said, overworking people and pushing them aside when they fall out of fashion is short sighted and will create long term problems for society as a whole.

  will create long term problems for society as a whole.
Even worse, it creates an externality, a debt that society will pay for the corporation.

Re: The Strategic Imperative Not to Hire Anybody

#12

Post by madair »

emmett wrote: post #3

Very similar to the arguments of the Luddites: The power loom is putting workers out of a job! Some attempt to do something which gets the unemployed back to work could be good, but trying to create make-work by using more people than a job requires is not.

There is actual social effect. Calling out "Luddites!!!" every time an attempt is made to discuss and address the risks and balances to economic and technology progress may be masking self-denial about responsibility and consequences?

Re: The Strategic Imperative Not to Hire Anybody

#13

Post by robrenaud »

ovi256 wrote: post #4

>My clients were amazed by how much productivity they could squeeze out of their people in the downturn. Overworking only works for a few months, after which people's health will start to suffer. All these managers are deluding themselves if they think this is going to keep on indefinitely. OTOH, if some people were underworked and they are just starting to pull their weight, that's another matter.

If you can make your employees more productive, I would think you would want more of them, to capture more of the market. That is, if employee output increases, but the cost per employee are constant, you are better off hiring more employees until the marginal output of the next employee reaches the cost of that employee.

But what do I know, I am just an engineer ;).

Re: The Strategic Imperative Not to Hire Anybody

#14

Post by ryanwaggoner »

j5eb6ach wrote: post #5

We have a situation of 'haves' and 'have nots'. A corporation of 100 employees has every reason to prefer that those employees work at 120% (50 hrs/wk). Our society would benefit if instead the corporation hired 20 additional employees, and everyone worked at 100%.

Only if you assume that there are a fixed number of jobs available. And even if you do believe that, why is 40 hrs the optimal number? Just think, rather than 100 people accomplishing 5000 hours of work per week, we could hire 5000 people and then they only have to work 1 hour per week! Everybody wins!

On the other hand, perhaps everyone is better off if those 20 people go out and start companies that create jobs?

Re: The Strategic Imperative Not to Hire Anybody

#15

Post by btilly »

robrenaud wrote: post #13
ovi256 wrote: post #4

>My clients were amazed by how much productivity they could squeeze out of their people in the downturn. Overworking only works for a few months, after which people's health will start to suffer. All these managers are deluding themselves if they think this is going to keep on indefinitely. OTOH, if some people were underworked and they are just starting to pull their weight, that's another matter.

If you can make your employees more productive, I would think you would want more of them, to capture more of the market. That is, if employee output increases, but the cost per employee are constant, you are better off hiring more employees until the marginal output of the next employee reaches the cost of that employee. But what do I know, I am just an engineer ;).

You're assuming a far more direct relation between consumption and production than actually exists.

If I can sell 10,000 widgets for $100 each that doesn't mean that I can sell 1,000,000 widgets at the same price. And if I try to produce that many widgets in the hope of selling them, I'm liable to drive the price of widgets down so far that I'll lose money on all of them!

In other words while the auto industry could produce more cars than anyone wants to buy, it would be a really, really bad idea for them to do so.

In production there is a point of diminishing returns. And after you're at that point, increased productivity frequently results in cutting back people to return production to an optimal level.

Re: The Strategic Imperative Not to Hire Anybody

#16

Post by btilly »

j5eb6ach wrote: post #5

We have a situation of 'haves' and 'have nots'. A corporation of 100 employees has every reason to prefer that those employees work at 120% (50 hrs/wk). Our society would benefit if instead the corporation hired 20 additional employees, and everyone worked at 100%.

Your math ignores retraining costs. A corporation of 100 employees that hires 20 more will in fact temporarily have just created extra work for the existing 100 for some time before they see a benefit from the hires.

And given normal turnover, retraining would become a higher portion of that corporation's costs permanently, resulting in permanently decreased productivity.

Re: The Strategic Imperative Not to Hire Anybody

#17

Post by yummyfajitas »

ovi256 wrote: post #11
kg wrote: post #8

Earlier quoted context omitted.

I'm definitely not in favor of creating needless jobs, and companies that can be creative and do more with less in a sustainable fashion (without creating a poor quality of life for those doing it) should be rewarded. That being said, overworking people and pushing them aside when they fall out of fashion is short sighted and will create long term problems for society as a whole.

will create long term problems for society as a whole. Even worse, it creates an externality, a debt that society will pay for the corporation.

What externality does increased productivity cause?

Re: The Strategic Imperative Not to Hire Anybody

#18

Post by robrenaud »

btilly wrote: post #15
robrenaud wrote: post #13

Earlier quoted context omitted.

If you can make your employees more productive, I would think you would want more of them, to capture more of the market. That is, if employee output increases, but the cost per employee are constant, you are better off hiring more employees until the marginal output of the next employee reaches the cost of that employee. But what do I know, I am just an engineer ;).

You're assuming a far more direct relation between consumption and production than actually exists. If I can sell 10,000 widgets for $100 each that doesn't mean that I can sell 1,000,000 widgets at the same price. And if I try to produce that many widgets in the hope of selling them, I'm liable to drive the price of widgets down so far that I'll lose money on all of them! In other words while the auto industry could…

I was talking about behavior of employers on the margin, not about increasing employment by an order of magnitude.

Certainly I agree that my argument is limited by changes at scale and also only applies to individual companies within an industry rather than entire industries as a whole.

On the other hand, if Chevy gained a competitive advantage and could produce cars say, 10% cheaper than they used to be able to, it would usually make sense for them to produce more cars, potentially selling them for cheaper. The car industry as a whole still couldn't sell many more cars, but the Chevy would still be better off, taking some market share their competitors.

On the other hand, I think the implicit assumption in the article is that the recession shocked the economy and there was a significant drop in demand. Even if Chevy realized some efficiency gains during the recession, they are still better off cutting production and letting those efficiency gains limit workforce size because the demand curve changed.

Re: The Strategic Imperative Not to Hire Anybody

#19

Post by potatolicious »

ryanwaggoner wrote: post #14
j5eb6ach wrote: post #5

We have a situation of 'haves' and 'have nots'. A corporation of 100 employees has every reason to prefer that those employees work at 120% (50 hrs/wk). Our society would benefit if instead the corporation hired 20 additional employees, and everyone worked at 100%.

Only if you assume that there are a fixed number of jobs available. And even if you do believe that, why is 40 hrs the optimal number? Just think, rather than 100 people accomplishing 5000 hours of work per week, we could hire 5000 people and then they only have to work 1 hour per week! Everybody wins! On the other hand, perhaps everyone is better off if those 20 people go out and start companies that create jobs?

> "why is 40 hrs the optimal number?"

This number was determined during the industrial revolution to be the general maximum working hours for productivity to remain constant over a long period.

Which is to say, over 40 hours it was observed that factory workers' productivity decreased over the long term.

Without scientific evidence, I would say it's a pretty good estimate for software work also.

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