An employee wants more than money. If I have the feeling that I grow, I stay longer. If I get the feeling that they want to keep me down, I leave sooner. Simple as that.
If you increase the skillset of your employees you get back something along the way, so it's not just money wasted but also collecting a lot of interest. Also you become attractive for employees who want to grow. It's easy for the beancounters to count all the wasted money but it's not so easy to evaluate the real productivity that such employees give back. Maybe if companies were allowed to trade employees like cattle that mindset would change.
Perhaps msluyter was thinking of big companies that smaller ones can't match on spending power.
Either way - if you trained/grown someone to become much more valuable for other companies and still can't create enough value working for you... Then you have a different problem.
This the technically true, but also a very tough starting position.
If my six person startup has issues squeezing as much value out of my Dev than FANG companies with all their support structure and research into this, this is only to be expected, imo.
So yeah, it's a problem, one on the list of many problems most companies have though, so it's oversimplified to simply say:"Let's just pay for expensive training and hope they stay."
Yes, you can foster a culture, build a sense of loyalty etc.
but at some point in time even the most loyal employee feels underpaid if he's paid below market because the company can't afford someone at the stage they've reached by working there. I've seen this play out too often to ignore the counter argument.
The incentives of the company and the worker often simply don't align when it comes to career growth.
Let’s imagine that I work a job for three years, and a company spends $30,000 training me over that time period, when I then leave because that training helped me reach a better career position.
If they hadn’t paid for that benefit, I would have left after only two years — because the need to transfer for career advancement would happen sooner. This would save them $20,000-30,000 depending on how you count.
So what’s the net difference?
In scenario 1, they received a ROI of 1 year of improved labor, and 1 year of doubly improved labor. Additionally, the fixed costs of hiring are amortized over three years instead of two, and so decrease by 33%.
So for $30,000 they decreased my hiring costs by 33% and received two years of increased quality labor — say 5-10% productivity. Hiring an engineer is 25-50% of their yearly salary, so they’re saving 8-15% of my salary over three years. The productivity of an engineer is going to be like twice their salary, just to pay overhead and profit. So we’re looking at a boost of 10-20% my salary in their revenues.
So they’re looking at ~15-25% of my salary as the return for spending $10k/year. Naively, it seems like that pays off in many cases: it just requires you operate in a trust based manner.
> If they hadn’t paid for that benefit, I would have left after only two years — because the need to transfer for career advancement would happen sooner.
That depends on whether employees will switch just to get training, and not just for a bigger salary. If not, then training you will just increase your market value, making you more likely to switch.
What infrastructure do you have in mind? I guess if you employ people from everywhere, there's a bunch of overhead for handling international work contracts, payment etc.
All kinds. From your mentioned international work contracts and payments over structuring the work/code so that in can easier be distributed worldwide,using standardized hardware and software configurations so that adminstration/updating can be done automatically etc.
Maybe in US you do. In UK "laying off" a programmer for anything other than major breach of contract(like being caught red handed stealing) and without making the position demonstrably redundant, takes about ~6 months and it's not a pretty process. Laying off should be the option of last resort, purely because of how incredibly costly it is(not just financially - going through the right steps takes time from both HR and other engineers).
> ...takes about ~6 months and it's not a pretty process.
This fact is clearly expressed in the UK contractor market which seems to consistently pay a 2x premium over salaried employees. Whilst some of this premium may be based on skills I'd wager a lot of it is buying the right to end employment at short notice (either due to poor performance, or simply in response to changing business requirements making the role obsolete).
In the US it’s quite common in a lay-off for 2/3rds of the victims to be unpopular people anyway.
No boss is gonna fight for someone who is getting the stink eye already. The lay-off lets then fire with cause without actually doing it. Kinda cowardly, but I’ve worked at places that cut proactively and things got even more toxic. Conversations speculating about who will get laid off next shouldn’t be a weekly thing. It’s paralyzing.
CEO: What happens if we don’t and they stay?"