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I don't know how much of a role this plays, but even with lower market rates, employing a team in Europe can be an expensive, unwieldy task. Firing in particula

I don't know how much of a role this plays, but even with lower market rates, employing a team in Europe can be an expensive, unwieldy task. Firing in particular seems to be a lengthy, drawn out process. I don't think that's a bad thing, but I can imagine how a significantly increased cost for every bad hire might increase the risk profile of a small startup.

zdragnar 6y ago
It is also a big brake on salaries, too. If employees are difficult to let go, and the cost of a bad hire is compounded by that, then it stands to reason that you wouldn't want to pay high salaries. Some companies in the US are terrible at getting rid of bad workers- too many cracks for them to fall through. Some, however, are known for paying high salaries and letting anyone go who doesn't live up to them.
oliverx0 6y ago
I think at-will employment in the US is key to their startup ecosystem. It makes their market very "liquid", as you can hire fast and fire fast.
- davidgay 6y ago
  > I think at-will employment in the US is key to their startup ecosystem. It makes their market very "liquid", as you can hire fast and fire fast. Is that really the case? I would have naively assumed the typical (median) startup path is something like hire, hire, hire, go-bankrupt? And the successful ones more like hire, hire, hire, hire, hire, go-public? Easy firing doesn't seem relevant to either of those?
  - oliverx0 6y ago
    Companies in Europe are much more reluctant to hire precisely because it is so much harder to fire. When I lived in the US, and got offers, the company’s first question would be: what’s the earliest you can start? In Europe my experience has been long processes that are dragged out unnecessarily. Hiring is riskier, and therefore slower. There are 2 sides to it of course, on one hand employees are much more protected from losing their jobs, but on the other one innovation and fast access to jobs is also slower. Also, it is not only about firing. Hiring is also slower because of all the paperwork that needs to happen. For example, in Spain you cannot just hire someone. You need to draft out a contract, cover every possible detail related to the work that the person will be doing, etc. it is just slower in general. This brings me back to my min point though: employment at will.

zdragnar 6y ago

It is also a big brake on salaries, too. If employees are difficult to let go, and the cost of a bad hire is compounded by that, then it stands to reason that you wouldn't want to pay high salaries. Some companies in the US are terrible at getting rid of bad workers- too many cracks for them to fall through. Some, however, are known for paying high salaries and letting anyone go who doesn't live up to them.

oliverx0 6y ago

I think at-will employment in the US is key to their startup ecosystem. It makes their market very "liquid", as you can hire fast and fire fast.

davidgay 6y ago
> I think at-will employment in the US is key to their startup ecosystem. It makes their market very "liquid", as you can hire fast and fire fast. Is that really the case? I would have naively assumed the typical (median) startup path is something like hire, hire, hire, go-bankrupt? And the successful ones more like hire, hire, hire, hire, hire, go-public? Easy firing doesn't seem relevant to either of those?
- oliverx0 6y ago
  Companies in Europe are much more reluctant to hire precisely because it is so much harder to fire. When I lived in the US, and got offers, the company’s first question would be: what’s the earliest you can start? In Europe my experience has been long processes that are dragged out unnecessarily. Hiring is riskier, and therefore slower. There are 2 sides to it of course, on one hand employees are much more protected from losing their jobs, but on the other one innovation and fast access to jobs is also slower. Also, it is not only about firing. Hiring is also slower because of all the paperwork that needs to happen. For example, in Spain you cannot just hire someone. You need to draft out a contract, cover every possible detail related to the work that the person will be doing, etc. it is just slower in general. This brings me back to my min point though: employment at will.