4 ms·

I agree with you but at the same time, if there was a bona fide shortage of labor then wouldn't industry be training people?

Terr_ 9y ago
> then wouldn't industry be training people? Ideally, but there's also a sort of prisoner's-dilemma [0] going on, where if company A trains well and company B doesn't but puts the budget into wages, people will train at A and then leave for B higher pay. [0]https://en.wikipedia.org/wiki/Prisoner%27s_dilemma https://en.wikipedia.org/wiki/Prisoner%27s_dilemma
- pasquinelli 9y ago
  If there's actually a labor shortage, B will starve for want of labor. Labor isn't just a cost, it's an investment, and the kind of loyalty you'd get by training someone without a lot of prospects in a high demand field for free shouldn't be ignored.
  - Terr_ 9y ago
    > If there's actually a labor shortage, B will starve for want of labor. B is able to offer higher salaries. Yes, employee loyalty is a thing, but it's also hard to justify to MBA-types and is softer when the employees are in demand.
Glyptodon 9y ago
Maybe they don't believe there's enough demand and/or economic growth to justify the investment considering its risks and expenses? If given a choice between paying for 6 months of training, or 6 months of waiting for the perfect candidate, waiting is much cheaper. In fact, the longer training takes and the more valuable the trainee at the end (the more demand for the trainee from competitors, essentially), I would guess the less likely businesses are to want to foot the bill. Likewise, training means you have to pay/contract so as to insure that there's not a high risk of a trainee being sniped. On the demand/economic growth angle, witness all the large corporations hoarding record amounts of cash. It seems like many businesses recognize that disposable income is fairly well soaked - I think a general perception is that there's not enough disposable income to risk much investment in new products/industries unless they somehow clearly cannibalize from an existing market segment or specifically target upper incomes (and it takes a lot for something targeting upper incomes to be viable enough to not be boutique). Anyway, this is mostly speculation on my part.
- pasquinelli 9y ago
  "If given a choice between paying for 6 months of training, or 6 months of waiting for the perfect candidate, waiting is much cheaper." Fair enough, but then this is not a labor shortage. An employee makes their boss money. In a labor shortage, waiting for the perfect candidate is choosing to lose money.
- rjblackman 9y ago
  it is also likely at the end of the training the employee is more valuable to the company than to the competitors (since they know the culture and technology), so in order to keep them from moving to a competitor they should pay more than a competitor would.

Terr_ 9y ago

> then wouldn't industry be training people? Ideally, but there's also a sort of prisoner's-dilemma [0] going on, where if company A trains well and company B doesn't but puts the budget into wages, people will train at A and then leave for B higher pay. [0]https://en.wikipedia.org/wiki/Prisoner%27s_dilemma https://en.wikipedia.org/wiki/Prisoner%27s_dilemma

pasquinelli 9y ago
If there's actually a labor shortage, B will starve for want of labor. Labor isn't just a cost, it's an investment, and the kind of loyalty you'd get by training someone without a lot of prospects in a high demand field for free shouldn't be ignored.
- Terr_ 9y ago
  > If there's actually a labor shortage, B will starve for want of labor. B is able to offer higher salaries. Yes, employee loyalty is a thing, but it's also hard to justify to MBA-types and is softer when the employees are in demand.

Glyptodon 9y ago

Maybe they don't believe there's enough demand and/or economic growth to justify the investment considering its risks and expenses? If given a choice between paying for 6 months of training, or 6 months of waiting for the perfect candidate, waiting is much cheaper. In fact, the longer training takes and the more valuable the trainee at the end (the more demand for the trainee from competitors, essentially), I would guess the less likely businesses are to want to foot the bill. Likewise, training means you have to pay/contract so as to insure that there's not a high risk of a trainee being sniped. On the demand/economic growth angle, witness all the large corporations hoarding record amounts of cash. It seems like many businesses recognize that disposable income is fairly well soaked - I think a general perception is that there's not enough disposable income to risk much investment in new products/industries unless they somehow clearly cannibalize from an existing market segment or specifically target upper incomes (and it takes a lot for something targeting upper incomes to be viable enough to not be boutique). Anyway, this is mostly speculation on my part.

pasquinelli 9y ago
"If given a choice between paying for 6 months of training, or 6 months of waiting for the perfect candidate, waiting is much cheaper." Fair enough, but then this is not a labor shortage. An employee makes their boss money. In a labor shortage, waiting for the perfect candidate is choosing to lose money.
rjblackman 9y ago
it is also likely at the end of the training the employee is more valuable to the company than to the competitors (since they know the culture and technology), so in order to keep them from moving to a competitor they should pay more than a competitor would.