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I finally have a use for my MBA. The theory on this one is not good. You're right: people will leave of their own volition. Problem is, it's usually the people

I finally have a use for my MBA. The theory on this one is not good. You're right: people will leave of their own volition. Problem is, it's usually the people with the highest marketability. In laymen's terms, the most skilled and productive employees. In any given organisation you'll find 20% doing 80% of the heavy lifting. Losing half of the most productive employees results in a real world 40% reduction in output. Of course, much of this output is intangible and easy to hide, so investors don't see the damage for years. Soon enough, lack of productivity bites cash flows, and another round of layoffs is announced. Wouldn't you know it, the most productive leave this time too.

01100011 5y ago
A couple of coworkers with experience in the defense industry related a story about a company, Cubic I think, which started offering buyouts in order to reduce headcount and boost profits. The best engineers took the offer because they could just get another job somewhere else. The worst employees stayed behind and proceeded to do the same buyout approach next time the company needed to save money. It was a natural selection feedback loop that took the company's engineering talent into the gutter.
- mprovost 5y ago
  Bruce Webster named this the "Dead Sea Effect". [0] Imagine your talent evaporating, leaving an increasingly salty residue. [0] http://brucefwebster.com/2008/04/11/the-wetware-crisis-the-dead-sea-effect/ http://brucefwebster.com/2008/04/11/the-wetware-crisis-the-d...
- onlyrealcuzzo 5y ago
  I think the practice is old, and /might/ have once made more sense. If you offer a buyout to a bunch of people in a factory with no real alternative, you're selecting for the people who want to do nothing - which is probably the people who are doing (close to) nothing. If you offer a buyout to a bunch of people with real alternatives, you're going to mostly buyout the people with the best alternatives (the most marketable employee / the most productive). This is amplified by the fact that factory workers really have a minimum amount they must be productive. Whereas software engineers can LITERALLY do nothing. Further, factory workers have a pretty low limit on how productive they can be. The limit is much higher for software engineers. It's an old practice that might have made sense, but definitely does not make sense in software.
andrewjf 5y ago
As far as I can tell, this kind of thinking (the best people leave first and you're stuck with the lowest performers) _is_ accepted common knowledge. So what's the thought process that goes into triggering the good people to leave? Is there just no other option?
- caoilte 5y ago
  The thinking is, Good people leave anyway. Everybody is replaceable.
- SuoDuanDao 5y ago
  I suspect that past a certain scale, some good people leaving is so unavoidable it becomes necessary to make everyone replaceable. That tends to hobble the top performers the most, turnover justifies shifting the culture more in that direction, etc.
  - dan-robertson 5y ago
    I don’t really buy this argument. Another thing one sees is companies deciding that a certain level of ‘unregretted attrition’ is good and then effecting policies that end up raising attrition in general and of course it disproportionately rises for the more productive marketable employees. So maybe those companies don’t realise what they’re doing or they don’t know who is important to keep or they think the attrition is worth it. I don’t think one can merely consider it unavoidable when companies actively increase it.
- humanwhosits 5y ago
  "If they can't afford those other people, I'm probably not getting paid enough to stay"
- chii 5y ago
  > So what's the thought process that goes into triggering the good people to leave? my 2 cents is that those high-performers are not trusted enough with autonomy (by the increasingly large middle management). But the reason they are a high performer is because they're very good at working out what to do, as well as executing - which implies good autonomy, and self-reliant decision making. Perhaps at a large scale team, this sort of autonomy doesnt work. As an anecdote, there are high performers in crafts such as blacksmithing - where the skills required are high and high autonomy is probably desired (i have never seen a blacksmith be micromanaged). So what makes software development so different that it cannot remain like a craft? My answer is that you have middle management who is made responsible for the output of the high performers, but they don't and can't truly control them - other than via micromanaging.

01100011 5y ago

A couple of coworkers with experience in the defense industry related a story about a company, Cubic I think, which started offering buyouts in order to reduce headcount and boost profits. The best engineers took the offer because they could just get another job somewhere else. The worst employees stayed behind and proceeded to do the same buyout approach next time the company needed to save money. It was a natural selection feedback loop that took the company's engineering talent into the gutter.

mprovost 5y ago
Bruce Webster named this the "Dead Sea Effect". [0] Imagine your talent evaporating, leaving an increasingly salty residue. [0] http://brucefwebster.com/2008/04/11/the-wetware-crisis-the-dead-sea-effect/ http://brucefwebster.com/2008/04/11/the-wetware-crisis-the-d...
onlyrealcuzzo 5y ago
I think the practice is old, and /might/ have once made more sense. If you offer a buyout to a bunch of people in a factory with no real alternative, you're selecting for the people who want to do nothing - which is probably the people who are doing (close to) nothing. If you offer a buyout to a bunch of people with real alternatives, you're going to mostly buyout the people with the best alternatives (the most marketable employee / the most productive). This is amplified by the fact that factory workers really have a minimum amount they must be productive. Whereas software engineers can LITERALLY do nothing. Further, factory workers have a pretty low limit on how productive they can be. The limit is much higher for software engineers. It's an old practice that might have made sense, but definitely does not make sense in software.

andrewjf 5y ago

As far as I can tell, this kind of thinking (the best people leave first and you're stuck with the lowest performers) _is_ accepted common knowledge. So what's the thought process that goes into triggering the good people to leave? Is there just no other option?

caoilte 5y ago
The thinking is, Good people leave anyway. Everybody is replaceable.
SuoDuanDao 5y ago
I suspect that past a certain scale, some good people leaving is so unavoidable it becomes necessary to make everyone replaceable. That tends to hobble the top performers the most, turnover justifies shifting the culture more in that direction, etc.
- dan-robertson 5y ago
  I don’t really buy this argument. Another thing one sees is companies deciding that a certain level of ‘unregretted attrition’ is good and then effecting policies that end up raising attrition in general and of course it disproportionately rises for the more productive marketable employees. So maybe those companies don’t realise what they’re doing or they don’t know who is important to keep or they think the attrition is worth it. I don’t think one can merely consider it unavoidable when companies actively increase it.
humanwhosits 5y ago
"If they can't afford those other people, I'm probably not getting paid enough to stay"
chii 5y ago
> So what's the thought process that goes into triggering the good people to leave? my 2 cents is that those high-performers are not trusted enough with autonomy (by the increasingly large middle management). But the reason they are a high performer is because they're very good at working out what to do, as well as executing - which implies good autonomy, and self-reliant decision making. Perhaps at a large scale team, this sort of autonomy doesnt work. As an anecdote, there are high performers in crafts such as blacksmithing - where the skills required are high and high autonomy is probably desired (i have never seen a blacksmith be micromanaged). So what makes software development so different that it cannot remain like a craft? My answer is that you have middle management who is made responsible for the output of the high performers, but they don't and can't truly control them - other than via micromanaging.