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For the most part, bonding agreements ("you can't leave for X years without repaying us for your training") are considered exploitative and usually not legally

For the most part, bonding agreements ("you can't leave for X years without repaying us for your training") are considered exploitative and usually not legally enforceable. As a result, a business can't pay to train it's own work force - if a business invests $20k in training and $80k in salary, there is nothing stopping another employer from offering $90k in salary after training is complete. If an investment can't be protected it's pointless to make it. Having employees pay for (and be compensated for) their own training is the most reasonable workaround.

emodendroket 11y ago
If you don't make the worker want to take off then it doesn't have to come to that.
mrxd 11y ago
And yet it was the norm only a few decades ago. What's new is the emphasis on speed and flexibility. If you're starting a new initiative, it's better to hire skilled people now than to start a training program and get them 2 years from now. And if the new initiative fails, laying off people you've trained is throwing away the money you spent on their training.
- yummyfajitas 11y ago
  It's not just starting and stopping projects faster, it's also social norms about changing jobs. We have a much more liquid job market and this provides a lot more opportunities for folks to arb opportunities. This is overall a good thing, but there are side effects.
  - deleted 11y ago
    [deleted]
  - __z 11y ago
    How much of the liquidy is caused by changing social norms among workers and workers taking advantage of better work opportunities and how much is caused by an unstable job market(with unions losing power) caused by CEOs? Mass layoffs were not always a "thing." They are traumatic to those who get layed off and those who witness layoffs of their friends, family, co-workers, and neighbors without getting layed off themselves.
    - cgearhart 11y ago
      I think it has as much to do with a corporate shift away from pensions and other considerations for long-term employees. For my entire professional career I've been warned that there is no one else looking out for me but me. There will be no pension when I retire, and no social security, I'm told. So I have to maximize what I earn and what I save now in order to survive later. Is it any wonder then that my generation has absolutely no sense of loyalty to their employer and show a pathological willingness to jump at almost anything that pays more or has better growth potential? What benefit is there to an employee that would encourage them to stay with one employer? (To be fair...I've been with my employer for about 10 years, so YMMV.)
      - yummyfajitas 11y ago
        The shift away from pensions is caused mainly by laws (e.g. ERISA) requiring companies to properly account for them. Defined benefit pensions are both extremely expensive and very risky, but companies were allowed to hide these losses and risks off the balance sheets in the past. http://www.thedailybeast.com/articles/2013/03/15/sorry-folks-one-way-or-the-other-you-ll-never-be-able-to-count-on-retirement.html http://www.thedailybeast.com/articles/2013/03/15/sorry-folks...
        ghaff 11y ago
        And, as the author of the piece says, if you did have an overstuffed pension fund that caused problems too both with the IRS and because of LBOs. Of course, a lot of benefits choices are driven by laws/accounting rules/taxes. Ideally companies want to give benefits that cost them less (however they look at cost) than their value to the employee. Once that balance flips, that benefit makes a lot less sense. That said, a benefit structure that assumes long-term employment with a single company doesn't make a lot of sense for most people or most companies today. (Though I'm probably unusual among this readership is that I actually will have a modest pension from a past employer.)
        anigbrowl 11y ago
        But most employers in the developed world shifted to defined contribution benefits ages ago. I was part of that first generation of workers to be told that my pension was going to be a moveable feast and not something that I could have specific expectations about, and that was back in the early 90s. Defined benefits pensions are indeed still expensive for companies and local governments that owe them to older workers, but they've been moving away from taking on such obligations for a long time now.
  - normloman 11y ago
    People change jobs more because nowadays, it's the only way they can get a raise. This is also the fault of employers. The middle class hasn't gotten a raise in years, while executive bonuses continue to rise. Pay people more, and you'll retain them longer.
VLM 11y ago
"if a business invests $20k in training and $80k in salary, there is nothing stopping another employer from offering $90k in salary after training is complete" Doesn't this assume a lifestyle from several generations ago where you get "the training" then you're set for the rest of your working life? I don't think the real world has worked like that since at least the 70s. If I took that $90K job I'd be OK while I'm there... thats what, on average just a couple years? Then I'd be dead in the water and have some explaining to do at the interview for the next $80K job that provides the entry level training I'd need. Why would any employer hire an untrained employee if there's a perfectly well trained employee from the $80K job? Meanwhile the guy who stayed at the $80K job likely got a promotion to $100K and here I am trying to get in at the ground floor yet again. How this fits in with stereotypical OTJ training is a mystery. Most formal training is a way to shovel money to middlemen who provide it in an accelerated format for an extremely large fee. Most real world training is "here's a PC with a web browser and your bosses bosses boss declared the due date for the project is next month, now figure it out yourself". Think of the last time you worked a project with a junk spec that has no relationship with reality. Those people who can't spec a fizzbuzz if their life depended on it are the ones specifying the required training. I wonder if that training spec will be worth the paper its printed on?
- notahacker 11y ago
  If I've got a specific skill or qualification that's increased my market value to $90k, I'm not really sure why I'd be reduced to applying for entry level jobs and requiring training again in two years time? And there's a huge spectrum of on the job training, from pointless classroom exercises to tick company compliance boxes to highly expensive professional qualifications that might pay for themselves in two years if the firm can hang onto the employee and bill for their time, but also make it much easier for the employee to get a better offer. It's the latter type that costs firms the most money as well as benefits candidates the most.
  - jdmichal 11y ago
    > If I've got a specific skill or qualification that's increased my market value to $90k, I'm not really sure why I'd be reduced to applying for entry level jobs and requiring training again in two years time? In other news, the huge demand for people who could efficiently work a loom has slacked greatly since the industrial revolution. (A snarky way of saying, training and the benefits and value it confers is a function over time. Especially in the current world of web-based software development, two years can be a very large amount of time.)
deleted 11y ago
[deleted]
mrbabbage 11y ago
https://en.m.wikipedia.org/wiki/Golden_handcuffs https://en.m.wikipedia.org/wiki/Golden_handcuffs How would training followed by a bonding period be considered differently than other mechanisms inducing employees to stay? Could these other mechanisms also be legally questionable? E.g. some San Francisco Bay Area technology companies offer large (~$20k) signing bonuses to new uni graduate hires that the employee must return if she leaves within her first year at the company. Similarly, companies offer five-year equity packages that deliver no equity until the twelfth month.
- __z 11y ago
  Yeah, I heard about companies who pay for college - as long as you stay one year after your last class. If not you have to pay them back. Actually, just pay back just the tuition you spent in the last year.
  - malyk 11y ago
    When I started my first job out of college in 2001 the way the company did it for my masters program was to give interest free loans to cover the cost, then forgave that loan balance over the course of a few years (forget how long). I got my masters degree and then stayed at the company for a year and a half before leaving. At which point I had to pay back the remaining loan balance. Worked pretty well for the situation, but that would only work if the cost of training wasn't exorbitant and the worker pay was relatively high. I believe I was making $58k when I left and had to pay $8k or so to repay the loan. Doable for me, but not necessarily so for a lot of people.
  - mariodiana 11y ago
    Seeing as Army ROTC will want 4 years, it sounds like a great deal.
    - __z 11y ago
      If you take classes for 4 years then you'll have to stay 5 to get your education fully paid off. If you took 4 years of classes and worked for 4 years then you'd owe them 1 year tuition (the previous year) That being said, this deal was to further your education for your job. So you couldn't get your masters in finance unless you worked in finance. A software developer couldn't get their finance degree paid for. This was for a company my friend worked for.
jackmaney 11y ago
> if a business invests $20k in training and $80k in salary, there is nothing stopping another employer from offering $90k in salary after training is complete. Then that business will have to pay better. You want me to stick around? Fuck you, pay me[1] (or give me some other reason that is compelling--to me, not to you--to stay). [1]: https://www.youtube.com/watch?v=jVkLVRt6c1U https://www.youtube.com/watch?v=jVkLVRt6c1U
thirdtruck 11y ago
> if a business invests $20k in training and $80k in salary, there is nothing stopping another employer from offering $90k in salary after training is complete. And nothing stops the first business from raising the employee's pay to $91k. Why should they expect to keep paying the same salary to someone they've made more valuable? They already amortized the costs of training over the value added by the employee in the first year, right?
- yummyfajitas 11y ago
  Then the total cost to the first business for this employee is $111k. The cost to the second business (who provides no training) is $92k to beat the first company's offer. It's a losing proposition to provide training - you get the same labor at a higher cost. In contrast, if you simply pay $100k to trained employees, and employees can pay for training out of pocket, you preserve the cost structure (big caveat: I'm ignoring taxes) but without the risk of losing your investment.
  - bicknergseng 11y ago
    > if you simply pay $100k to trained employees Assuming 1) you can find trained employees, and 2) they are willing to work for $100k. If the value of the trained employee is $111k, then why would they work for $100k except for ignorance of their value? This is my big problem with STEM shortage parrots and with labor as a market in general: ideal candidates are rare, and, in general, willingness to spend more or train up is pretty low. On the other hand, anecdotally businesses seem willing to wait months or years for that ideal candidate to come along and fail to balance the gigantic opportunity cost lost with the cost to train. It's economically not as simple as what I'm describing, but that's sorta my point. I rarely see anyone in labor market discussions (especially around STEM or highly skilled workers) include the opportunity cost of an unfilled position.
    - notahacker 11y ago
      Their market value probably isn't $111k, hence their existing employer being unwilling to match competitors' salary offering for a trained member of staff and pick up the tab for the training.
s73v3r 11y ago
That's not true at all. Business doesn't want to have to actually compete for it's employees, that's it.
switch007 11y ago
> For the most part, bonding agreements ("you can't leave for X years without repaying us for your training") are considered exploitative and usually not legally enforceable. Extremely common in the UK :(
- emodendroket 11y ago
  They're common in the US too; they just aren't enforceable. However, I assume a lot of people aren't aware of that or else just feel grateful enough to an employer that offered them training of some significant value that they stick around for a few years.
mindslight 11y ago
Your argument rests on an assumption that an employee produces nothing of value while learning. If they are performing useful work while learning, then the salary paid to them isn't being wasted. How true this is depends on the field and subject matter, but surely any entity will tend to see their own specifics as basic things anyone should already know even though the field is actually much larger.
- verbin217 11y ago
  The investment could produce a net gain, even in the immediate, and there would still be a problem. Leaking value into the competitive environment in which you're trying to survive will kill you. As alluded to by the GP, training as compensation produces employees that are worth more to competitors. Once trained, an employee experiences a loss in pay equal to the cost of their training. This Effectively subsidizes their departure.
  - mindslight 11y ago
    > Leaking value into the competitive environment in which you're trying to survive will kill you Taken to the extreme, sure. But every voluntary interaction necessarily "leaks value", being non-zero-sum. This word "training" keeps getting used, and I think it's at the heart of this disagreement - viewing learning as a discrete top-down event as opposed to a continuous process. GP's example is akin to an employer paying for a bachelor's degree. My comment is easiest thought of in terms of company-specific processes. For any specific 'skill', the truth lies somewhere in the middle. Software is a bit of a rare case where most tools are highly complex, but are also freely (as-in-beer) accessible. Tool choice is heavily driven by fashion, yet fashion being foreign to our worldview we're blind to this. Is $software_package a fundamental that every college graduate should know, or basically equivalent to an in-house framework? Who knows...
brixon 11y ago
Companies have to do stuff like this since employee loyalty was lost when companies started making layoffs commonplace. Training from a company says that they have a vested interest in the person, but they don't. Companies don't care about you, they only care about the bottom line and do not have any interest in spending effort to teach you something you could use somewhere else.
anigbrowl 11y ago
For a mathematician you sure like fallacious arguments. As a result, a business can't pay to train it's own work force Well, they could offer more pay after the training is completed, or focus on being a nice place to work such that employees would choose to stay put with a company that treated them well. Your argument rests on the implicit assumption that employees will leave the moment they receive a competitive offer and are only interested in maximizing the take-home pay aspect of their economic advantage. Employees are motivated by a combination of monetary compensation, benefits, and good will towards a firm in the same way that a firm is valued by both its book assets and its good will in the marketplace. You assume, without foundation, that employee loyalty towards an employer that provides training will be nil, and ignores the possibility that employees might look forward to receiving future training (and promotions) which would have significant economic value, whereas a firm that poaches employees and offers no training of its own presumably won't be offering any in future either. If an investment can't be protected it's pointless to make it. Having employees pay for (and be compensated for) their own training is the most reasonable workaround. You could equally argue that it's pointless for employees to run up debt buying expensive an education which an employer might then say doesn't quite meet their requirements and therefore shouldn't be rewarded by additional compensation. Considering the non-dischargability of student loans in bankruptcy and the financial weakness of employees relative to employers when it comes to negotiating prices for training/education, I would say it's rather irrational for employees to take on all the financial risk involved.
- yummyfajitas 11y ago
  The other company without training could also be a nice place to work, and pay more as well. You are right that some employees might give "goodwill" to their employer. If such goodwill effects become sufficiently large, maybe employers will start offering training again. I guess you'll be encouraging employees to hold irrational feelings of loyalty towards their employers? As for the costs to employees, that is indeed a potential concern. I encourage anyone considering investing money in education to consider the marketability of same.
  - anigbrowl 11y ago
DoggettCK 11y ago
I remember some motivational poster from my old tech recruiter's FB feed that seems appropriate here: "What if we invest in training and our employees leave?" "What if we don't, and they stay?"
kenko 11y ago
"As a result, a business can't pay to train it's own work force." I believe in Germany consortiums of businesses in the same industry subsidize training. Seems reasonable. In any case, your observation would seem to be refuted by the fact that businesses in general used to do precisely that, and many businesses still do do precisely that. "Having employees pay for (and be compensated for) their own training is the most reasonable workaround." For the business, maybe.
wisty 11y ago
There's no reason why they would pay $80k in salary if they're not getting enough expected value. Until a new programmer is making minimum wage, there's always a point at which companies can employ them for less, and hope their value (plus expected value from the ones who stay on at a higher wage) will be more than the costs of training. Also, training is often domain specific. Employees are generally worth more to their employer than a competitor (though there are exceptions).
sheepmullet 11y ago
"As a result, a business can't pay to train it's own work force - if a business invests $20k in training and $80k in salary, there is nothing stopping another employer from offering $90k in salary after training is complete." Except for the massive information asymmetries in the market. Even ignoring the information asymmetry, hiring a new employee is expensive. You can easily end up paying 40-50k to hire a good developer (as a combination of the recruitment process and ramp up time). So really company B is paying salary + $40-50k recruitment. This means company A can easily match company B as well as provide training.
kartickvad 11y ago
I think this logic breaks down when you run out of people who already have the skills du jour. If you can hire people who already have the specific skills you need, sure, let others pay for the cost of acquiring those skills. But, when you run out of those people, then the choice becomes paying to train them, or suffer the cost of leaving the work they'd do undone. If the value of the work they perform is more than the cost of training, it's logical to train them. In this example, the market rate for someone already trained at a certain set of skills is $90k, and the cost of training is $20k. Nothing prevents a company from offering people who are smart and capable, but not trained at whatever the company happens to need today, $70k. But with a promise (in the employment agreement, not orally) to offer $90k one year from now. Everyone benefits from this arrangement — the candidate, who now has a better job they otherwise would have (which is presumably why they're taking the offer in the first place). And the company, who's getting a capable employee without spending more on training. So, the bottom line is that you can always structure your incentives in a way that makes the training worthwhile for all parties involved, without asking the employee to pay for it.
analog31 11y ago
As a result, a business can't pay to train it's own work force - if a business invests $20k in training and $80k in salary, there is nothing stopping another employer from offering $90k in salary after training is complete. If the training has increased her market salary, then the simple solution is to raise her salary to meet the market.

emodendroket 11y ago

If you don't make the worker want to take off then it doesn't have to come to that.

mrxd 11y ago

And yet it was the norm only a few decades ago. What's new is the emphasis on speed and flexibility. If you're starting a new initiative, it's better to hire skilled people now than to start a training program and get them 2 years from now. And if the new initiative fails, laying off people you've trained is throwing away the money you spent on their training.

yummyfajitas 11y ago
It's not just starting and stopping projects faster, it's also social norms about changing jobs. We have a much more liquid job market and this provides a lot more opportunities for folks to arb opportunities. This is overall a good thing, but there are side effects.
- deleted 11y ago
  [deleted]
- __z 11y ago
  How much of the liquidy is caused by changing social norms among workers and workers taking advantage of better work opportunities and how much is caused by an unstable job market(with unions losing power) caused by CEOs? Mass layoffs were not always a "thing." They are traumatic to those who get layed off and those who witness layoffs of their friends, family, co-workers, and neighbors without getting layed off themselves.
  - cgearhart 11y ago
    I think it has as much to do with a corporate shift away from pensions and other considerations for long-term employees. For my entire professional career I've been warned that there is no one else looking out for me but me. There will be no pension when I retire, and no social security, I'm told. So I have to maximize what I earn and what I save now in order to survive later. Is it any wonder then that my generation has absolutely no sense of loyalty to their employer and show a pathological willingness to jump at almost anything that pays more or has better growth potential? What benefit is there to an employee that would encourage them to stay with one employer? (To be fair...I've been with my employer for about 10 years, so YMMV.)
    - yummyfajitas 11y ago
      The shift away from pensions is caused mainly by laws (e.g. ERISA) requiring companies to properly account for them. Defined benefit pensions are both extremely expensive and very risky, but companies were allowed to hide these losses and risks off the balance sheets in the past. http://www.thedailybeast.com/articles/2013/03/15/sorry-folks-one-way-or-the-other-you-ll-never-be-able-to-count-on-retirement.html http://www.thedailybeast.com/articles/2013/03/15/sorry-folks...
      - ghaff 11y ago
        And, as the author of the piece says, if you did have an overstuffed pension fund that caused problems too both with the IRS and because of LBOs. Of course, a lot of benefits choices are driven by laws/accounting rules/taxes. Ideally companies want to give benefits that cost them less (however they look at cost) than their value to the employee. Once that balance flips, that benefit makes a lot less sense. That said, a benefit structure that assumes long-term employment with a single company doesn't make a lot of sense for most people or most companies today. (Though I'm probably unusual among this readership is that I actually will have a modest pension from a past employer.)
      - anigbrowl 11y ago
        But most employers in the developed world shifted to defined contribution benefits ages ago. I was part of that first generation of workers to be told that my pension was going to be a moveable feast and not something that I could have specific expectations about, and that was back in the early 90s. Defined benefits pensions are indeed still expensive for companies and local governments that owe them to older workers, but they've been moving away from taking on such obligations for a long time now.
- normloman 11y ago
  People change jobs more because nowadays, it's the only way they can get a raise. This is also the fault of employers. The middle class hasn't gotten a raise in years, while executive bonuses continue to rise. Pay people more, and you'll retain them longer.

VLM 11y ago

"if a business invests $20k in training and $80k in salary, there is nothing stopping another employer from offering $90k in salary after training is complete" Doesn't this assume a lifestyle from several generations ago where you get "the training" then you're set for the rest of your working life? I don't think the real world has worked like that since at least the 70s. If I took that $90K job I'd be OK while I'm there... thats what, on average just a couple years? Then I'd be dead in the water and have some explaining to do at the interview for the next $80K job that provides the entry level training I'd need. Why would any employer hire an untrained employee if there's a perfectly well trained employee from the $80K job? Meanwhile the guy who stayed at the $80K job likely got a promotion to $100K and here I am trying to get in at the ground floor yet again. How this fits in with stereotypical OTJ training is a mystery. Most formal training is a way to shovel money to middlemen who provide it in an accelerated format for an extremely large fee. Most real world training is "here's a PC with a web browser and your bosses bosses boss declared the due date for the project is next month, now figure it out yourself". Think of the last time you worked a project with a junk spec that has no relationship with reality. Those people who can't spec a fizzbuzz if their life depended on it are the ones specifying the required training. I wonder if that training spec will be worth the paper its printed on?

notahacker 11y ago
If I've got a specific skill or qualification that's increased my market value to $90k, I'm not really sure why I'd be reduced to applying for entry level jobs and requiring training again in two years time? And there's a huge spectrum of on the job training, from pointless classroom exercises to tick company compliance boxes to highly expensive professional qualifications that might pay for themselves in two years if the firm can hang onto the employee and bill for their time, but also make it much easier for the employee to get a better offer. It's the latter type that costs firms the most money as well as benefits candidates the most.
- jdmichal 11y ago
  > If I've got a specific skill or qualification that's increased my market value to $90k, I'm not really sure why I'd be reduced to applying for entry level jobs and requiring training again in two years time? In other news, the huge demand for people who could efficiently work a loom has slacked greatly since the industrial revolution. (A snarky way of saying, training and the benefits and value it confers is a function over time. Especially in the current world of web-based software development, two years can be a very large amount of time.)

deleted 11y ago

[deleted]

mrbabbage 11y ago

https://en.m.wikipedia.org/wiki/Golden_handcuffs https://en.m.wikipedia.org/wiki/Golden_handcuffs How would training followed by a bonding period be considered differently than other mechanisms inducing employees to stay? Could these other mechanisms also be legally questionable? E.g. some San Francisco Bay Area technology companies offer large (~$20k) signing bonuses to new uni graduate hires that the employee must return if she leaves within her first year at the company. Similarly, companies offer five-year equity packages that deliver no equity until the twelfth month.

__z 11y ago
Yeah, I heard about companies who pay for college - as long as you stay one year after your last class. If not you have to pay them back. Actually, just pay back just the tuition you spent in the last year.
- malyk 11y ago
  When I started my first job out of college in 2001 the way the company did it for my masters program was to give interest free loans to cover the cost, then forgave that loan balance over the course of a few years (forget how long). I got my masters degree and then stayed at the company for a year and a half before leaving. At which point I had to pay back the remaining loan balance. Worked pretty well for the situation, but that would only work if the cost of training wasn't exorbitant and the worker pay was relatively high. I believe I was making $58k when I left and had to pay $8k or so to repay the loan. Doable for me, but not necessarily so for a lot of people.
- mariodiana 11y ago
  Seeing as Army ROTC will want 4 years, it sounds like a great deal.
  - __z 11y ago
    If you take classes for 4 years then you'll have to stay 5 to get your education fully paid off. If you took 4 years of classes and worked for 4 years then you'd owe them 1 year tuition (the previous year) That being said, this deal was to further your education for your job. So you couldn't get your masters in finance unless you worked in finance. A software developer couldn't get their finance degree paid for. This was for a company my friend worked for.

jackmaney 11y ago

> if a business invests $20k in training and $80k in salary, there is nothing stopping another employer from offering $90k in salary after training is complete. Then that business will have to pay better. You want me to stick around? Fuck you, pay me[1] (or give me some other reason that is compelling--to me, not to you--to stay). [1]: https://www.youtube.com/watch?v=jVkLVRt6c1U https://www.youtube.com/watch?v=jVkLVRt6c1U

thirdtruck 11y ago

> if a business invests $20k in training and $80k in salary, there is nothing stopping another employer from offering $90k in salary after training is complete. And nothing stops the first business from raising the employee's pay to $91k. Why should they expect to keep paying the same salary to someone they've made more valuable? They already amortized the costs of training over the value added by the employee in the first year, right?

yummyfajitas 11y ago
Then the total cost to the first business for this employee is $111k. The cost to the second business (who provides no training) is $92k to beat the first company's offer. It's a losing proposition to provide training - you get the same labor at a higher cost. In contrast, if you simply pay $100k to trained employees, and employees can pay for training out of pocket, you preserve the cost structure (big caveat: I'm ignoring taxes) but without the risk of losing your investment.
- bicknergseng 11y ago
  > if you simply pay $100k to trained employees Assuming 1) you can find trained employees, and 2) they are willing to work for $100k. If the value of the trained employee is $111k, then why would they work for $100k except for ignorance of their value? This is my big problem with STEM shortage parrots and with labor as a market in general: ideal candidates are rare, and, in general, willingness to spend more or train up is pretty low. On the other hand, anecdotally businesses seem willing to wait months or years for that ideal candidate to come along and fail to balance the gigantic opportunity cost lost with the cost to train. It's economically not as simple as what I'm describing, but that's sorta my point. I rarely see anyone in labor market discussions (especially around STEM or highly skilled workers) include the opportunity cost of an unfilled position.
  - notahacker 11y ago
    Their market value probably isn't $111k, hence their existing employer being unwilling to match competitors' salary offering for a trained member of staff and pick up the tab for the training.

s73v3r 11y ago

That's not true at all. Business doesn't want to have to actually compete for it's employees, that's it.

switch007 11y ago

> For the most part, bonding agreements ("you can't leave for X years without repaying us for your training") are considered exploitative and usually not legally enforceable. Extremely common in the UK :(

emodendroket 11y ago
They're common in the US too; they just aren't enforceable. However, I assume a lot of people aren't aware of that or else just feel grateful enough to an employer that offered them training of some significant value that they stick around for a few years.

mindslight 11y ago

Your argument rests on an assumption that an employee produces nothing of value while learning. If they are performing useful work while learning, then the salary paid to them isn't being wasted. How true this is depends on the field and subject matter, but surely any entity will tend to see their own specifics as basic things anyone should already know even though the field is actually much larger.

verbin217 11y ago
The investment could produce a net gain, even in the immediate, and there would still be a problem. Leaking value into the competitive environment in which you're trying to survive will kill you. As alluded to by the GP, training as compensation produces employees that are worth more to competitors. Once trained, an employee experiences a loss in pay equal to the cost of their training. This Effectively subsidizes their departure.
- mindslight 11y ago
  > Leaking value into the competitive environment in which you're trying to survive will kill you Taken to the extreme, sure. But every voluntary interaction necessarily "leaks value", being non-zero-sum. This word "training" keeps getting used, and I think it's at the heart of this disagreement - viewing learning as a discrete top-down event as opposed to a continuous process. GP's example is akin to an employer paying for a bachelor's degree. My comment is easiest thought of in terms of company-specific processes. For any specific 'skill', the truth lies somewhere in the middle. Software is a bit of a rare case where most tools are highly complex, but are also freely (as-in-beer) accessible. Tool choice is heavily driven by fashion, yet fashion being foreign to our worldview we're blind to this. Is $software_package a fundamental that every college graduate should know, or basically equivalent to an in-house framework? Who knows...

brixon 11y ago

Companies have to do stuff like this since employee loyalty was lost when companies started making layoffs commonplace. Training from a company says that they have a vested interest in the person, but they don't. Companies don't care about you, they only care about the bottom line and do not have any interest in spending effort to teach you something you could use somewhere else.

anigbrowl 11y ago

For a mathematician you sure like fallacious arguments. As a result, a business can't pay to train it's own work force Well, they could offer more pay after the training is completed, or focus on being a nice place to work such that employees would choose to stay put with a company that treated them well. Your argument rests on the implicit assumption that employees will leave the moment they receive a competitive offer and are only interested in maximizing the take-home pay aspect of their economic advantage. Employees are motivated by a combination of monetary compensation, benefits, and good will towards a firm in the same way that a firm is valued by both its book assets and its good will in the marketplace. You assume, without foundation, that employee loyalty towards an employer that provides training will be nil, and ignores the possibility that employees might look forward to receiving future training (and promotions) which would have significant economic value, whereas a firm that poaches employees and offers no training of its own presumably won't be offering any in future either. If an investment can't be protected it's pointless to make it. Having employees pay for (and be compensated for) their own training is the most reasonable workaround. You could equally argue that it's pointless for employees to run up debt buying expensive an education which an employer might then say doesn't quite meet their requirements and therefore shouldn't be rewarded by additional compensation. Considering the non-dischargability of student loans in bankruptcy and the financial weakness of employees relative to employers when it comes to negotiating prices for training/education, I would say it's rather irrational for employees to take on all the financial risk involved.

yummyfajitas 11y ago
The other company without training could also be a nice place to work, and pay more as well. You are right that some employees might give "goodwill" to their employer. If such goodwill effects become sufficiently large, maybe employers will start offering training again. I guess you'll be encouraging employees to hold irrational feelings of loyalty towards their employers? As for the costs to employees, that is indeed a potential concern. I encourage anyone considering investing money in education to consider the marketability of same.
- anigbrowl 11y ago

DoggettCK 11y ago

I remember some motivational poster from my old tech recruiter's FB feed that seems appropriate here: "What if we invest in training and our employees leave?" "What if we don't, and they stay?"

kenko 11y ago

"As a result, a business can't pay to train it's own work force." I believe in Germany consortiums of businesses in the same industry subsidize training. Seems reasonable. In any case, your observation would seem to be refuted by the fact that businesses in general used to do precisely that, and many businesses still do do precisely that. "Having employees pay for (and be compensated for) their own training is the most reasonable workaround." For the business, maybe.

wisty 11y ago

There's no reason why they would pay $80k in salary if they're not getting enough expected value. Until a new programmer is making minimum wage, there's always a point at which companies can employ them for less, and hope their value (plus expected value from the ones who stay on at a higher wage) will be more than the costs of training. Also, training is often domain specific. Employees are generally worth more to their employer than a competitor (though there are exceptions).

sheepmullet 11y ago

"As a result, a business can't pay to train it's own work force - if a business invests $20k in training and $80k in salary, there is nothing stopping another employer from offering $90k in salary after training is complete." Except for the massive information asymmetries in the market. Even ignoring the information asymmetry, hiring a new employee is expensive. You can easily end up paying 40-50k to hire a good developer (as a combination of the recruitment process and ramp up time). So really company B is paying salary + $40-50k recruitment. This means company A can easily match company B as well as provide training.

kartickvad 11y ago

I think this logic breaks down when you run out of people who already have the skills du jour. If you can hire people who already have the specific skills you need, sure, let others pay for the cost of acquiring those skills. But, when you run out of those people, then the choice becomes paying to train them, or suffer the cost of leaving the work they'd do undone. If the value of the work they perform is more than the cost of training, it's logical to train them. In this example, the market rate for someone already trained at a certain set of skills is $90k, and the cost of training is $20k. Nothing prevents a company from offering people who are smart and capable, but not trained at whatever the company happens to need today, $70k. But with a promise (in the employment agreement, not orally) to offer $90k one year from now. Everyone benefits from this arrangement — the candidate, who now has a better job they otherwise would have (which is presumably why they're taking the offer in the first place). And the company, who's getting a capable employee without spending more on training. So, the bottom line is that you can always structure your incentives in a way that makes the training worthwhile for all parties involved, without asking the employee to pay for it.

analog31 11y ago

As a result, a business can't pay to train it's own work force - if a business invests $20k in training and $80k in salary, there is nothing stopping another employer from offering $90k in salary after training is complete. If the training has increased her market salary, then the simple solution is to raise her salary to meet the market.