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But if it were accurate, wouldn't companies spend more effort on retention and engagement over hiring? This is a data point that I have seen claimed for years a

But if it were accurate, wouldn't companies spend more effort on retention and engagement over hiring? This is a data point that I have seen claimed for years and years and yet companies don't act on it. Companies are either making a near universal error that has been well publicized at this point or the number is wrong and hiring is nowhere near that expensive. Amazon is a very data driven company. But they have no problem churning through people like crazy. They are a company with hire to fire, so if hiring an SDE cost $50,000, they are letting managers spend 50K to fiddle with attrition stats.

amanaplanacanal 5y ago
But those numbers are averages, my case is special because of X, Y, and Z. I’m sure every manager can rationalize this away.
- mrguyorama 5y ago
  Indeed, plenty of employees also tend to make this error. They'll fight against unions because "I can bargain better than a conglomerate of employees could"
lostcolony 5y ago
It's an average, not a universal. Confronted with the data, you COULD choose to increase engagement, or look to reduce cost of churn. Amazon delays equity a lot, so it may look financially sensible to churn through people. Beyond that though, companies make plenty of universal errors. Can you think of any other errors the -average- company makes, that may cost them money?
- MattGaiser 5y ago
  I can think of plenty of companies that do plenty of things wrong, or at least seem to be wrong. I can't think of many things virtually all of them do wrong, especially ones that are so well publicized and are at the organizational level rather than the individual team level. I can see equity being a reason for Amazon, but it is hardly just equity granting companies that are this way.
  - lostcolony 5y ago
    You call it out yourself; it may not even be "the company" is seeing much change in retention, but different parts of the org are. Others have solid retention. But retention also isn't an easy metric to solve for. It's not "just do X and watch that number improve". The closest thing companies do is throw money at people, but that only works if you're so far higher than the rest of the market that people are looking at a massive paycut if they go somewhere else, and that still is only one data point affecting those averages. Certainly, no company that I left could have kept me by throwing $9k more at me; I made more than that with every company change I made, let alone what actually caused me to start looking in the first place.
danaris 5y ago
> But if it were accurate, wouldn't companies spend more effort on retention and engagement over hiring? Retention and engagement are hard, complicated problems. The mindset that employees are interchangeable cogs with no real needs of their own—particularly psychological needs that have anything to do with the workplace—is still a very strong one in every sector of the American workplace. Even for those companies where management, as a whole, does genuinely understand that it benefits everyone to have engaged employees, if you ask 10 people "how do you keep employees engaged?" you'll get 12 different answers. We're still just a few steps away from tenant farmers, sweatshops, and company towns. The fact that there's research that shows spending on retention is massively more effective than spending on hiring will take generations more to actually catch on amongst the American executive class...unless we can manage to pull together a serious union renaissance and demand the better conditions that will actually help everyone.
s3r3nity 5y ago
A few things: 1) Just like in Sales, on average it is cheaper _and_ marginally more profitable to retain an employee than to recruit a new one. This includes cost to recruit, interview, onboard, etc. 2) The exceptions here that throw off the average are those companies with strong inbound hiring pipelines (ex: Amazon will never have a shortage of applicants) that reduce the costs of recruiting + interviewing, and retaining high performers (e.g.: the cost of losing an upper-decile performer is much more significant.)
cratermoon 5y ago
That goes back to how different costs are accounted for in the corporate world, how they appear on the bottom line, and how they affect valuation and the stock price. I don't pretend to understand corporate account practices, but generally, look at what's considered an asset, what's considered a liability, and what sort of costs can be amortized and or taken as a tax credit. I imagine that if there was a law that said companies could write off half or more what they spend on employee retention and development, you'd see Amazon and others put a lot more money that direction.

amanaplanacanal 5y ago

But those numbers are averages, my case is special because of X, Y, and Z. I’m sure every manager can rationalize this away.

mrguyorama 5y ago
Indeed, plenty of employees also tend to make this error. They'll fight against unions because "I can bargain better than a conglomerate of employees could"

lostcolony 5y ago

It's an average, not a universal. Confronted with the data, you COULD choose to increase engagement, or look to reduce cost of churn. Amazon delays equity a lot, so it may look financially sensible to churn through people. Beyond that though, companies make plenty of universal errors. Can you think of any other errors the -average- company makes, that may cost them money?

MattGaiser 5y ago
I can think of plenty of companies that do plenty of things wrong, or at least seem to be wrong. I can't think of many things virtually all of them do wrong, especially ones that are so well publicized and are at the organizational level rather than the individual team level. I can see equity being a reason for Amazon, but it is hardly just equity granting companies that are this way.
- lostcolony 5y ago
  You call it out yourself; it may not even be "the company" is seeing much change in retention, but different parts of the org are. Others have solid retention. But retention also isn't an easy metric to solve for. It's not "just do X and watch that number improve". The closest thing companies do is throw money at people, but that only works if you're so far higher than the rest of the market that people are looking at a massive paycut if they go somewhere else, and that still is only one data point affecting those averages. Certainly, no company that I left could have kept me by throwing $9k more at me; I made more than that with every company change I made, let alone what actually caused me to start looking in the first place.

danaris 5y ago

> But if it were accurate, wouldn't companies spend more effort on retention and engagement over hiring? Retention and engagement are hard, complicated problems. The mindset that employees are interchangeable cogs with no real needs of their own—particularly psychological needs that have anything to do with the workplace—is still a very strong one in every sector of the American workplace. Even for those companies where management, as a whole, does genuinely understand that it benefits everyone to have engaged employees, if you ask 10 people "how do you keep employees engaged?" you'll get 12 different answers. We're still just a few steps away from tenant farmers, sweatshops, and company towns. The fact that there's research that shows spending on retention is massively more effective than spending on hiring will take generations more to actually catch on amongst the American executive class...unless we can manage to pull together a serious union renaissance and demand the better conditions that will actually help everyone.

s3r3nity 5y ago

A few things: 1) Just like in Sales, on average it is cheaper _and_ marginally more profitable to retain an employee than to recruit a new one. This includes cost to recruit, interview, onboard, etc. 2) The exceptions here that throw off the average are those companies with strong inbound hiring pipelines (ex: Amazon will never have a shortage of applicants) that reduce the costs of recruiting + interviewing, and retaining high performers (e.g.: the cost of losing an upper-decile performer is much more significant.)

cratermoon 5y ago

That goes back to how different costs are accounted for in the corporate world, how they appear on the bottom line, and how they affect valuation and the stock price. I don't pretend to understand corporate account practices, but generally, look at what's considered an asset, what's considered a liability, and what sort of costs can be amortized and or taken as a tax credit. I imagine that if there was a law that said companies could write off half or more what they spend on employee retention and development, you'd see Amazon and others put a lot more money that direction.