Sure, but that still doesn't make it an investment, it just makes it a less risky bet. And betting on people being high-minded over being selfish has always been a bad one.
Well, yeah, that's what it means, right? If you pay me $50k per year and invest $20k of company resources to train me, and the second my training's up, I jump ship to a company promising to pay me $60k, wouldn't you feel ripped off?
Nobody these days would turn down a $10k raise out of company loyalty. They might for other reasons, but loyalty is absolutely not one of them anymore.
The right thing to do is to start transitioning the $20k you were spending training the new guy into salary as he acquires the skills.
Its stupid to spend the $20k, figure its "done" and then think you can just go on paying the $50k after the fact even though the employee is clearly now worth $70k.
You want a $70k talent, you can either find one straight up or make one with some mix of lower salary + training until you have one.
If you hire someone for $50k, then train them with $20k, then give them a raise after the training is over for the $20k it takes to bring their comp up to market, you're out $90k. Accounting-wise, you just gifted the employee $20k on top of his comp.
Or you can just go out and hire for $70k and just be out $70k. This is what's already being done, shifting the cost of training and education onto the ones receiving the benefits of that training.
I'm trying hard to not post a diatribe about what's wrong with this kind of thinking and just point out the errors in reasoning that come from it, but this game of whack-a-mole is frustrating. You can't demand your employer to shoulder all the risks and grant unto you all the rewards. It's unethical and leads to underhanded dealing. We want a more professional labor marketplace, not one governed by promises and half-truths.
The employer's reward in this scenario is more than $20k in value provided by the newly trained employee. The risk,10 of course, is through employee leaving before the employer can realize the reward fully. It's interesting that you don't see it that way, and that you think it's an error in reasoning.
I don't know why I let myself get sidetracked into this worthless ideological discussion.
Final answer, then I'm getting back to work. Because when you take risks, you should expect a reward. If your reward isn't worth the risk, but you still take it anyway, then you're the dumb one. When you're the one offering liquid compensation, you get to decide on the risk profile of the bought solution.
e.g. if a company invests in a building for their office, there's always a risk that building will incur excessive maintenance expenses, become unusable because of some calamity, or that the location around the building will become a bad neighborhood and make that building a lot less useful.
i think a company can invest in, say, teaching their employees a valuable skill and then make money off that investment, even if the employee leaves eventually.
You can insure against risks. You can't against bets. Good luck getting an insurance company to sell you a policy covering training cost recovery in the event of employee-initiated turnover.
i feel like we're playing word games. "risk" vs. "bet."
the distinction you raise is that there (apparently) is no such thing as an insurance policy that protects a company against a valuable employee's departure.
but that doesn't mean "invest" is the wrong word to use when a company spends money to educate an employee.
also, there are strategies aside from a literal insurance policy which companies can and do use to increase employee retention rates. (just like there are strategies other than insurance policies that companies can use to protect a building against damage or loss of value.)
Self-insurance against the risk of employee defections costing them time and money is exactly what employers are already doing, by not taking on the risk of educating and training employees.
You can hedge your bets in many different ways with different assumptions for likely outcomes. For example, if you think it likely that your employee won’t hang around for very long, then you can act by treating them as disposable. You could also choose to mitigate the risk of them leaving if you thought you could be successful at it. Both approaches are forms of self insurance, none of them are full proof, and they can also lead to self fulfilling prophecy problems.
Yes, but the difference between an investment and a bet involves the amount and type of risk. Investments generally don't disappear. Bets do.
Also the expected rewards are higher too. If a company bets $20k in an employee, the best they can hope for is that the employee does a good job. Not that that bet doubles in value.
> If a company bets $20k in an employee, the best they can hope for is that the employee does a good job. Not that that bet doubles in value.
What do you think it means from the company's perspective to "do a good job"? A developer who does a good job will most likely double that $20k in a few months.
