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I think you're missing the deeper point. In a highly mobile labour market training people makes no sense. A trained workforce is a commons, and what we see is

I think you're missing the deeper point. In a highly mobile labour market training people makes no sense. A trained workforce is a commons, and what we see is a classic tragedy of the commons. Consider two firms with a budget of $100,000 for an employee for a year. Firm A decides to offer wages of $50k to an untrained worker and invest the other $50k in an intensive 3 month training program. Firm B decides to do no training at all. Worker joins firm A, benefits from the three months training and then immediately quits to go pick up the $100k salary for the rest of the year. Generic job training is an investment, but, there's no way to get reliable ROI on it unless the training is super firm specific (like training in your own trade secrets). So nobody trains and everything is pushed onto the employees themselves via universities and trade schools, because that resolves the tragedy of the commons.

notfromhere 7y ago
They could just raise wages once they've upskilled one of their employees so that they don't leave. Problem is that internal raises beyond inflation are basically impossible for most workers, so the only thing that makes sense is to leave a job 1-2 years in for a double digit raise.
alexmlamb 7y ago
It seems like this can easily be fixed by having people sign up for contracts that last more than 1 year or at least have some financial incentives that accrue to employees who stay longer? For example, tech companies have stocks that only vest after 4 years. I don't see why in principle this couldn't be even longer. I don't know much about it personally, but I think the US government has a lot of benefits (like retirement) that scales with years of service. I actually suspect that at least for many big companies the problem isn't getting people to stay after training, it's getting the best employees to stay and getting lower-performing employees to leave. I think for this reason, most tech companies structure pay with a 4-year contract, which promises a high salary for 4-years (due to bonuses and stock), and then an implicit pay drop if there's no promotion after 4-years.

notfromhere 7y ago

They could just raise wages once they've upskilled one of their employees so that they don't leave. Problem is that internal raises beyond inflation are basically impossible for most workers, so the only thing that makes sense is to leave a job 1-2 years in for a double digit raise.

alexmlamb 7y ago

It seems like this can easily be fixed by having people sign up for contracts that last more than 1 year or at least have some financial incentives that accrue to employees who stay longer? For example, tech companies have stocks that only vest after 4 years. I don't see why in principle this couldn't be even longer. I don't know much about it personally, but I think the US government has a lot of benefits (like retirement) that scales with years of service. I actually suspect that at least for many big companies the problem isn't getting people to stay after training, it's getting the best employees to stay and getting lower-performing employees to leave. I think for this reason, most tech companies structure pay with a 4-year contract, which promises a high salary for 4-years (due to bonuses and stock), and then an implicit pay drop if there's no promotion after 4-years.