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PaperclipPerfector  22d ago (text post)   26722 thread views

Culture War Roundup for the week of December 30, 2024

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I've be thinking about the h1b debate and who can be trained. Without doxxing myself, I work for a hedge fund that is buying lots of small engineering companies. Most of these companies have pretty terrible IT people. Despite having on prem DCs and a NAS, they have no idea what they are doing. Migrating them to our Azure tenant is pretty easy, but we are stuck with a bunch of useless IT people (initially), usually White. It's nothing agains them, but they usually know nothing. I don't want to bore anyone with the details, but these people have no idea how a domain controller works, let alone anything in the cloud.

That being said, 90% of the time we can train them up in two to three months. Half of them within a year have left to take senior admin jobs. One of them even got a job at Google.

I guess I don't even know where I'm going with this, but the point is we trained these guys up in Azure and AWS, and instead of sticking around and thanking us for training them, they leave as soon as they had a better opportunity.

So the h1b? Yeah companies want them because they can't leave. You train an American? They're gone in 6 months. As soon as you train an American, they are gone. They are looking for a better job. You teach an American anything, and they put in on their resume.

I guess what I'm saying is this. It's almost impossible to keep talented Americans on your payroll long term. It makes sense to have h1bs when you consider this.

As an aside, congratulations for making an almost perfect scissor statement.

My cousin works in IT and he tells me its a stupid industry where you have to leave your job to get promoted. So yeah, if you took a bunch of dunderheads making $60k and now they are $150k workers but you didn't promote them alongside their expanded skillset that is on you. Remember, your company didn't take on any downside risk. You could have offered a multiyear contract with a buyout, but you didn't.

Remember, your company didn't take on any downside risk.

They took the risk of training them only to have them leave, actually.

Yeah but what's the cost of training them versus firing them and hiring fresh at market rate?

Well they did that intentionally. They could have fired them and hired other people at the same price the employees that got hired away were hired away for. They could have left them in the untrained state. They knew or should have known employees with more skills would be in more demand from outside companies. So the obvious move is to sign them to multiyear deals with built in pay raises (presumably less than what they would get for leaving). If you don't have that basic level of managerial foresight I dont see how your company's business model makes any sense.

I just got promoted for the second time in seven years as a software engineer at the same company, and my income has more than doubled over that time period. And this is slow for my company; I had a lot of issues focusing during mandatory WFH during COVID, which was a major speedbump for my career progression. I could easily have been promoted a third time, nearly tripling my income, if not for COVID.

Employers want to reap gains from competition in the labour market and complain when their employees enjoy the benefits of competition between employers? Tough, the world isn't designed to cater to our individual whims.

You see lots of big companies looking for foreign labour and happily outsourcing. But they're not nearly so eager for competition from foreign companies, it's all 'slave labour', 'strategic threats', 'stealing our markets', 'unfair currency practices'. Ask the US or EU car industry how they feel about offshore production, then how they feel about imports from China and watch how these staunch free traders embrace protectionism...

Good on you for training them. Seriously. I don't think anyone's actually said it yet.

Perhaps sitting down with them and discussing how the training is likely to affect their salaries, and asking them as a matter of honour to see out a year with the company would work better than just implicitly expecting them to. But so many companies expect employees to magically appear, fully formed and massively overqualified, and would rather hire for months than actually try to help somebody improve.

As a matter of honor? You're basically admitting that the training will make them more valuable, but that you're not going to pay them any more. Especially since it sounds like these people already work there and aren't new hires; it's not like they can skip the training and continue doing their old jobs. At least the way things are now they might not know how much more they can make and stay out of inertia.

This is a solved problem anyways: Multi-year contracts. If you think someone is worth training up, tell them so, give them a modest pay boost and a 3 year deal with a significant buyout.

Yes, that seems fair. “We are going to train you in a way that should give you a shot at senior admin position in many major companies. In return, we ask but don’t demand that you give us a year before looking for a new job.”

I would call that honest, fair dealing. It’s certainly a hell of a lot better than “ they might not know how much more they can make and stay out of inertia”. I need to write something on this at some point but it seems like American society always chooses a maximally adversarial way of dealing with people who have opposing interests. To some extent also true of other Anglo countries but to a less exaggerated degree.

It's exactly as fair as an employee saying to their boss, "I've just got a new mortgage so I would ask that you don't consider dismissing me for the next 12 months."

I think you’re being sarcastic but I agree as written. I would expect a well-run company to be quietly aware of its employees’ circumstances and aware that firing the young father-of-two comes with consequences that firing his footloose colleague doesn’t.

This is the kind of thing that @coffee_enjoyer talks about all the time. Carefully set-up adversarial processes work sometimes but they aren’t actually a substitute for a virtuous population that takes honour and obligations seriously for their own sake. Instead they’re often a doom loop that shreds trust and willingness to cooperate on both sides.

'Quietly aware' is how it has to be though on both sides. Once you come out and ask (for an employee to stay on a year, or for a boss to protect you), you are bringing the unsaid into the open in a way that feels like asking for something that can't be given outside of a contract.

But so many companies expect employees to magically appear, fully formed and massively overqualified, and would rather hire for months than actually try to help somebody improve.

I'm under the impression that this isn't even confined to tech.

Its not. I know a law firm that has had the same job posting for a specific lawyer/phd combo that has been open long enough that they could have send 2 lawyers with appropriate undergrads through a Ph.D program consecutively.

Would you be willing to share what the PhD field is?

Its some sort of pharmaceutical chemistry thing.

Do they specifically need the PHD? Like I don't know details but unless they're expecting the Lawyers to have done novel research into pharmaceuticals that feels like overkill to acquaint themselves with the industry.

It makes little sense to me. But I know they have turned down multiple people with chemical engineering, chemistry, and microbiology undergrads and otherwise pristine qualifications.

Are you sure it's a real position and not one of those "ghost job listings" I keep hearing about? If it had been a shorter amount of time, I'd assume they'd just written it to target one specific person as a formality, but if it's been posted for a while, then it certainly can't be that.

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I work for a hedge fund that is buying lots of small engineering companies. Most of these companies have pretty terrible IT people. [...] Half of them within a year have left to take senior admin jobs. One of them even got a job at Google.

I suppose it's piling on at this point, but, yes, it absolutely sounds like you are devaluing them both monetarily, and personally in quite an adversarial way. So while I can see why you might want to get workers with fewer options, I am not convinced that it's at all beneficial for anyone else. If they were making something incredibly useful, you could probably treat them better for it.

Just to be clear. They are bad when they first get hired. They are good after being trained, which is why they leave. The thing is the pay system for them is weird because they are brought on at their current salary when they company is acquired. So even if you bumped them up 20k they would still be underpaid by industry standards.

Right, so as part of the training program offer them something like, "if you complete the training successfully you will get a $25k salary boost but will have to remain with us for 3 years." Companies do this all the time by offering to pay for an employees tuition in a graduate school program.

Yeah companies want them because they can't leave.

They can, though. There's some paperwork, but it's absolutely possible to change employers on an H-1B visa. It's not even that rare—in 2023, there were 76k approved change of employer petitions, down from something like 120k in 2022 (due to a slowdown in tech hiring generally).

That's higher than I thought, but I'm still tempted to call that "rare". 129k / 3 million = 4% per year (1/25 years), while the American average is more like 25% (1/4 years). There's some confounding for age and field, but a 6x change is still notable.

EDIT: nvm, bad source on the total. 600k means 20% per year, which is practically identical to the average.

Where did 3 million come from? There's only like 600k H1Bs in the country. https://www.epi.org/blog/tech-and-outsourcing-companies-continue-to-exploit-the-h-1b-visa-program-at-a-time-of-mass-layoffs-the-top-30-h-1b-employers-hired-34000-new-h-1b-workers-in-2022-and-laid-off-at-least-85000-workers/

From here:

There are close to 3 million H1B visa holders in the U.S. Of those 3 million, more than 65,000 are Indian H1

After a tiny bit more research, I have severe doubts about my source. Not least of which is because 3m total / 85k annual = 35 year average duration of a visa, which is nonsense. Thanks for the catch, I've edited in a correction.

rare

What percentage of the total population of total h1b would need to change employers before its rare?

they leave as soon as they had a better opportunity

Such a common complaint. Usually with new junior hires. You train them for a year or two and then they bail for a much higher paying job. So you employ them when they aren't very productive and lose them when they are. Such a bad deal for the employer.

Which means these employers aren't paying market rates for well-trained employees. A large bump after they are well-trained would make them less want to leave. The fact that they leave for higher pay is indisputable proof that they were making below market rate at their previous job.

The even crazier thing here is you often don't need huge wage bumps. In my experience, even a 10-15% raise is enough to keep people and keep them happy.

Job hopping brings with it a lot of unknowns, and most people would rather stay where they are comfortable, it's surprising companies don't take advantage of this. Give these persons a gesture of a wage increase and they will stay longer and be more picky in their hops.

Yeah, but that wage increase is going to come straight out of the manager's bonus - so they'll just import some indians instead, and by the time the company has been reduced to a smoking ruin the managers responsible will have gotten their bonus and moved on to do the same thing in another, larger company - after all, they oversaw some tremendous profitability increases during their tenure (just don't look at what happened when the consequences hit after they left).

The even crazier thing here is you often don't need huge wage bumps. In my experience, even a 10-15% raise is enough to keep people and keep them happy.

That's just not done. HR doctrine has annual raises much smaller than that within a band, and larger raises only with promotion to a new band. Promotions are spaced at a minimum of 2 years. (Of course there's exceptions, but fighting for them is likely harder than switching jobs). So unless you promote them immediately on being trained, they're underpaid.

This is why good CEOs crack down on HR

It's unfortunate that it doesn't. With the vast number of smaller tech companies, one would think a few would hit "defect" and do it, and gain even more long term employees.

My experience has been that those companies are fairly short lived, merging with or being acquired by larger less remunerative organizations.

Medium sized to large companies just don't have the agility to do it. Mostly as @Mantergeistmann notes, it's HR departments "working to the industry best practices", but there's probably also a feeling among management types that if the techies want more they should fight for it they way they (management types) do. The way it does work is imperfect but adequate; if you want more money you jump ship more often (up to a point, usually a minimum of 2 years at a stint). The companies complain, the employees who move don't care, the employees who don't move complain and the employers don't care.

It depends on the situation, but it can happen. Several years ago I got an unsolicited 20% salary increase. Due to a combination of market factors and bad culture, there was a max exodus at my firm. I was in oil and gas at the time, and the head of the title department plus 2 of 3 supervising associates left in the span of like 2 months, along with a number of regular associates. This is only a few months after we landed a major client the partners had spent years courting, and we were just starting to turn in work we did for them. I remember going into a supervisor's office to ask a general question and being told not just that she was leaving but how much I could be making if I followed her out the door, or even if I applied to one of the other firms that gave her an offer. I was about to follow suit myself when I got called into the head of the oil and gas division's office and was given an immediate 20% salary bump plus other little bonuses. A couple weeks later, someone from the Board of Trustees met with those of us who remained and acted as a sounding board for all the changes we wanted. That being said, this only happened because the oil market suddenly rebounded from being in a multi-year slump. The firm had agreed to a lot of long-term contracts that didn't pay a lot so they could stay in business, and always used that as an excuse for the long hours and low pay. I had said in the past that the worst thing to happen to them would be for oil to rebound, since they'd have a ton of work and no one to do it.

That's exactly the way my company works. Presumably our HR departments are comparing notes and "working to industry best practices" and "benchmarking against the median of competitors".

They can’t let individuals renegotiate salaries regularly since it (a) risks discrimination lawsuits and (b) leads to ballooning pay since senior managers at firms are usually charismatic and persuasive enough to make a good case for why they and their entire team should be paid more. Thus the bands system and benchmarking.

I work for a major tech company. Two managers have told me that HR looks at industry wages and pays us according to that. So yes, exactly how you explained it.

I can only speak to my own experience but I expect companies have a lot of incentive not to do this proactively (though it varies by company). The upside is increased retention of people who might have left for a better offer. The downside is paying a bunch more money to people who were not going to leave anyway. Depending on what your turnover looks like the balance could tip either way. Ideally companies would target these raises precisely to the people who would leave without them but identifying them is probably hard, unless they self identify by negotiating with you and another company at the same time. I got my largest raise ever doing something like that but it was definitely nerve wracking. Concerns about retaliation or adverse action even if I stayed. Would not be surprised if people just take outside offers and skip the further stress of negotiating.

The wildest part of the transaction situation, to me, is how many people feel personally wed to the corporation in a way that they're frustrated by colleagues preferring additional compensation to exercising the misguided loyalty of sticking with a company that will drop them as soon as their expected future marginal product is negative. Employer-employee relations are inherently an adversarial collaboration for any employee that doesn't have substantial ownership stake in the corporation. Forgetting this is incredibly foolish.

One disagreement I'm having with both sides in this debate is how they conceive of the labor market. The market is fixed from an individual perspective in the short-term, but flexible at the market level and in the longterm, and policy makers should keep the latter things in mind. But our supposed policy makers are only thinking and speaking from an individual perspective.

@Rov_Scam has a good summary below that points out that the disagreement is partly around a management vs employee understanding.

From the short term perspective of both an employer and an employee the labor market is mostly fixed. There are a set number of roles that need to be filled and a set number of jobs that can be found.

The problem is that in the long term the labor market is absolutely not fixed. It is very flexible. Lots of personal money and well-being, and lots of corporate money is on the line to eke as much efficiency out of the labor market as possible.

If conditions change way too quickly (like they often do when the Fed YoYos its monetary policy, or when you have big external shocks like covid) there is going to be a lot of pain and suffering in the transition. Workers are likely to suffer the brunt of this pain. It simply takes longer to train and reskill then it takes to fire someone that no longer makes monetary sense for the business. There are levers that the federal government has to lessen those burdens. They could make training expenses tax deductible. They could lower employer contributions to social security during economic shocks (though this would require the discipline to lower them once again during economic booms).

But stopping this transition from happening altogether is not a good thing. A flexible labor market is the goose that lays the golden egg in America. If you want a Western world economy with low labor market flexibility then Europe is the go to example. And I think a few decades ago when the split really became apparent and obvious it looked way better to live in Europe. But now, after a percentage point or two of higher growth in the US has had its time to work the magic, the European bargain doesn't look that great. They are about 20% poorer than the US on a per capita basis, and the labor problems became severe enough that they had to start importing large number of migrants to do the shit work. Europe raised a welfare loving underclass, and they got it good and hard. Their migrant crisis is made far worse by the fact that portions of their economy would be collapsing if not for that immigration.

Work vs Ceremony

American society, for better or worse, tends to intermix what a "job" is supposed to be. There are two definitions:

  1. A job is work to be done. Getting the work done provides something valuable to people. Its valuable enough to other people, that they will pay you money to do it. Pay is determined by the work done.
  2. A job is a ceremonial position designating your social status in society. It is to be rewarded to good people, or people you like. Yes there are some activities associated with the job that must be done by the job holder, but they aren't super important. Pay is determined by the social importance of the position, or people holding the position.

One of the major complaints about DEI in the workplace is that it turns every job into a ceremonial position, and that is just not a sustainable practice for a profit oriented company. Nearly all government jobs are ceremonial positions. Notice that all nearly all requests that teachers, firefighters, police officers, etc get paid more is because they do important things, and that we shouldn't let person doing important thing be poor. It is rarely suggested that these positions should get paid more, because they will do more work.

If you get deep enough in the bowels of the federal government and its myriad of agencies, you'll realize just about all of those jobs are ceremonial, and they contract out when actual work needs to get done. Which is why there is an absolute army of federal contractors and federal contracting businesses. It is very common for the federal government to attach ceremonial job type requirements to these contracts. They want veterans, women, or minority owned businesses to serve the contracts.

I think the "job as a ceremonial position" is a toxic idea for an individual to hold. It stagnates your skills, and makes you focus not on what you are adding to the world and to the economy, but on your personal characteristics that are often immutable.

I'd add that the whole "ceremonial work" idea works in the opposite direction, too. I first noticed it, subtly, during the early days of the fight for the $15 minimum wage. There are plenty of arguments you can make about whether the minimum wage should go up, or by how much, but I noticed a dumb line of argument that suggested that it shouldn't be $15 simply because the people working at these places didn't deserve $15. It was usually along the lines of:

Most Jobs like those found at McDonald's, Burger King, etc. were never meant to be SOLE jobs that could support a family, pay for a car, a home, etc. Originally it was students and maybe retired folks who worked at these places. Today many members of minorities do the work and are demanding pay increases that are on par with jobs that requite more training and head smarts.

After COVID, when labor shortages caused these places to raise their wages close to $15 without any prompting from the government, the argument morphed into something more along the lines of:

High pay increases for low skilled/no skilled workers is killing the country. It literally devalues skilled and tech labor. Considering they are offering $18-25 for techs and skilled labor, it is too much to pay someone who may not have even finished high school.

More recently, I've seen this among those in the building trades:

Kids these days don't want to work. I try to get labor and they're entitled enough to think they can get $25 bucks for it. $25! That's not much less than I'm paying my skilled guys. I'm sorry but I'm not paying that kind of money for someone to clean up and unload trucks. Any moron can do that.

These guys usually express a sense of entitlement themselves—they started carrying when they were 15 for 3 bucks an hour and were glad to get it, then spent the next several decades moving up, learning the trade, investing in a business, and now some kid off the street with no experience expects you to pay him much more than your 40 years of experience says he's worth. Every time I hear a small business owner say "no one wants to work anymore" I always think "well, not at what you're paying them, anyway".

A hundred years ago there were a lot of men with minimal skills who had nothing to offer but their labor. as the economy boomed after World War II and people had more educational opportunities, the labor pool was less of an end and more of where you started, hoping to work your way up to a skilled position. But in an economy where people aren't simply taking whatever work they can get, where apprenticeships for skilled trades are available immediately without years of playing kiss-ass to a union boss, and you can walk into any gas station and get $15/hour to push cash registers, basic day labor has become a specialty occupation you have to attract people to do.

The thing about a lot of unskilled jobs that is lost on some people is that they also suck. When I was in high school I worked at a grocery store, and while the conditions weren't bad, I had to wear a uniform to work, I had to work nights and weekends, I had to deal with bitchy customers, there was a lot of standing around staring into space, etc. Now I work as a lawyer and have lots of expensive education and training and a hard-to-obtain license and I make exponentially more now than I did as a cashier. But would I go back if I could make my current salary? Hell no. Yes, part of why I became a lawyer was so I could make more money but part of it also was so I didn't have to work in a grocery store. The same thing is true with labor. I did construction labor when I was in college and it sucks. Eventually they let me on to the painting crew and, though it paid more, I would have done it for less since I wouldn't have to sling buckets all day.

Have you considered how much of the upset about basic laborers making $20-$25/hr is driven by skilled laborers upset that they haven't received equivalent payraises?

I think I am lacking some clarity. When you make the decision to keep them on and train them as you migrate their infrastructure to the cloud is this a business decision or a charitable one? Would it be cheaper, for you, to fire them all and hire replacements/do the migration yourself? Or is training them as part of doing the migration also the correct business decision?

They usually get trained for two jobs. The first is to help with migrations to the cloud. We need more people since they are acquiring a lot of companies. Then they also get cross trained as sys admins or network engineers since we need more of those too. On top of that, they also stay at the site they are at and continue that job doing IT support. I don't think the guys running the show want to come in and fire people when they acquire the companies, so they keep them on to kind of show everyone at that site everything will be fine. But they have to do something with them because they don't have anything on prem anymore to support. So I think it's a charitable one in a way so they don't rock the boat. But it's also a business one because these guys are usually underpaid. If they had to hire someone to do this in a high cost of living area, the pay would be much higher. So if they're good, they get a cheap employee. But they also leave because of that.

I guess I'm not seeing the angle where the employees should be grateful to the company. This sounds like it's cheaper for you to train them than it would be to hire replacements and additionally you hope they'll accept a lower salary. Should they be grateful your business didn't waste money firing and replacing them?

I would agree with you here. I'd do the same thing to be honest.

I've got a question -- do the cloud migrations actually pencil out in the long run, or is this some kind of book-cooking hedge fund thing?

Because IME the painful part about on-prem is the upfront migration and hardware cost, plus getting enough minimally-competent IT folx to maintain the thing -- if the company in question already has these things, while I can well believe that the major cloud providers will "help out" with resources to make the migration seem attractive in the short term, do they not bleed one dry in the long run with escalating fees for various needed resources, data storage, egress, etc. as time goes by?

They probably cost more in the long run, but that’s opex, not capex. Accounting prefers opex (and they don’t have to deal with depreciation). And it means fewer IT employees, and their inscrutable need for health and dental insurance.

Just that is enough to explain many of the cloud migrations.

All true -- I've BTDT, both directions. But OP seems to be describing a case where the capex and IT employees were already in place, and the (profit-focussed, presumably) hedge fund chose to move cloudward.

I'm asking whether this was for pump-and-dump reasons, or actually seen as healthier for the business.

At a traditional company that pays for your continuing education and an advanced degree, you'll automatically get a pay raise once you get it because degree holders are on a different pay grade. I thought it was funny, that the company would pay for your school, just so they can pay more later.

But it actually makes a lot of sense. The opportunity for education is part of your compensation at the lower level, and employees will potentially take lower pay or worse conditions for this opportunity. But once you're more valuable on the job market, you'll automatically get more pay.

Of course, if you really want indentured servitude, I believe that clawback provisions on training costs are legal. Simply write a contract that throws the shackles on, though you'll have to be careful that the employees might simply say no and keep coasting on their old roles. https://www.business.com/hr/trap/

Theoretically legal? Yes. Practical? No, not really. You might as well put a sign out front that says "This place has high turnover. It sucks to work here and you could easily make more elsewhere." In a tight labor market all that's going to get you is people who need a job so badly that they couldn't imagine just leaving after a year anyway. In a tight job market it's probably not necessary in any event.

From a legal perspective, if I'm a company looking to hire someone subject to one of these, I'm considering two options:

  1. Hire the person and assume the old company won't enforce the agreement. This is the easiest thing to do, though it leaves open a lot of uncertainty. But agreements don't enforce themselves, and it's going to cost the old company a lot of money to try to win this in court.

  2. Offer the old company a couple hundred bucks to sign a release and threaten to sue for declarative judgment that the agreement is unenforceable if they refuse.

This is the more aggressive strategy, but it throws down the gauntlet early. It says "we don't think this is enforceable and we dare you to enforce it". I could argue unenforceability on a number of theories. Now, if the old company paid a third party vendor for classes or other training, I'd probably just pay up, but if they're trying to say the employee owes them ten grand for normal internal training then I'd argue that the clawback provision is intended as an illegal penalty clause to prevent the employee from leaving the company. The idea being that the training is given to me in consideration of remaining at the company for a certain period, and that by leaving the company I breached the contract and have to pay damages. Except the company can't prove damages to an amount certain, so in anticipation of this the parties have agreed upon damages at the formation stage.

The problem with this is that legitimate liquidated damages clauses have to be based on a reasonable approximation of actual damages, in this case, a reasonable approximation of training costs. Doing this requires putting all kinds of fun stuff out there like training guidelines, salaries of employees, estimates of how much the company is making per employee, etc. Of course, I'm requesting all of this stuff in discovery, and they can fight me over it if they want. An that's only one of the theories I'd put forth. Just giving it up is probably the easier option.

if the old company paid a third party vendor for classes or other training

This is almost always the case. Or, as @phailyoor mentioned, continuing education/advanced degrees. They're often doing things like tuition reimbursement programs.

This definitely creates some messed up incentives, because if you can, say, "partner" with a separate training company who is really just doing the stuff you'd be otherwise doing, then you can implement clawbacks for things you couldn't otherwise. Might cost a bit more up front, but you might be able to make it back on the employee retention. And I'm sure some big companies would be happy to set up basically fake "separate" training companies that aren't really separate and dare you to try to prove it.

I believe that clawback provisions on training costs are legal.

I work for a company that doesnt wipe its own arse without government approval signed in triplicate, as the saying goes, and we have something like this: if you get a degree with the company contributing money, you have to stay at least one year after completion, or you owe all that money back. Seems very reasonable.

I think it only applies to degrees/university courses, though, not other generic training/certificate opportunities (i.e. if I get reimbursed for getting my Project Management Professional certification, it doesnt matter if I leave the very next day after the reimbursement shows up in my account; I don't owe a dime of it back).

if you get a degree with the company contributing money, you have to stay at least one year after completion, or you owe all that money back. Seems very reasonable.

That doesn't seem very reasonable because the company gets to harm you in arbitrary ways for the next year as long as the harm caused to you is not greater than the value of the education.

If they arbitrarily harmed a worker then the worker could do the bare minimum. Workers can treat employers poorly too. Do a shitty job, don't document anything, "actually I'm busy this weekend", quit suddenly without a 2 week handoff period after the clawback period is finished.

I mean, by that logic it isn't reasonable for a company to have a 1-year reimbursement requirement for paying costs for you to relocate, either.

Yes. Actually the relocation is worse, because not only are there dollar costs to relocate, there are other costs.

Hlynka-watch. Multi-agent environment.

Employees think about their situation and make choices, too. If they think you're starting to treat them worse, they'll definitely start looking. Decent chance they'll get someone to pay off the clawback, or at least enough of a raise to overcome whatever delta is left.

Plus, when you start treating them poorly, it's not just a direct monetary thing. It's an emotional thing, which is often highly valued alongside money. That is, say that they would owe you $10k. You imagine that you're going to only arbitrarily harm them by $5k somehow. But their resentment is worth $7k to them, so they'd even be willing to eat the $10k and make a lateral move elsewhere. (In the same vein, good will and belief that they know you are a decent employer compared to the unknown elsewhere is a huge reason why people often stay at companies even if they think they could eek out a bit more money elsewhere.)

On top of that, they're likely to be less productive, which is a pure harm for the employer. Especially with only a year clawback (I don't know why, but it does seem like clawbacks tend to be only 1yr, while incentives are more likely to vest in 3yrs). Pretty much as soon as they get a whiff of you treating them more poorly in that time, it's easy for them to go into "coasting" mode, start looking for other work, and think, "I'm only going to stay here until the 1yr mark if I can find any other offer." I know of one guy (not where I work) who I don't even think was treated badly, wasn't even training-related, but he got a signing bonus with a 1yr clawback, dropped his resignation on exactly the one year and one day mark. I have to imagine that a good chunk of that time, he was hardly even trying to contribute to the company. He knew what his plan was, and he went through the motions that he had to go through.

Harming people in arbitrary ways is usually negative sum, and any business that lets too much of that creep in is likely to end up doomed sooner or later. You would really need a surprisingly good business case for how you're actually going to extract additional value by treating them poorly during something like a clawback period.

Businesses that harm employees in arbitrary ways usually do so either

  1. as part of a principal/agent problem
  2. as part of a policy at a high enough level that losses caused from individual employees are lost in the noise (we're going to do this 20 million dollar change in our marketing strategy, and who cares if it makes things terrible for 5 employees in Podunk). Or
  3. because the business is poorly managed but its death throes take a long time; the business can stay irrational longer than you can stay solvent.

Correct. There are all sorts of dysfunctions that happen in business. Generally, the businesses with more of those dysfunctions fail more. None of those are what you had implied by "the company gets to harm you in arbitrary ways". Now, you're saying that there's just a background of some companies harming people in arbitrary ways, which has nothing else to do with the topic at hand. Presumably all of those things occur regardless of whether you get a degree paid for by the company. Do you think that somehow choosing to not get a degree paid for by the company stops those three things? If so, how?

...would you even dismiss giving someone a raise on the same grounds? "Eh, raises seem sus, because then they can arbitrarily harm you by slightly less than that much..."

Presumably all of those things occur regardless of whether you get a degree paid for by the company. Do you think that somehow choosing to not get a degree paid for by the company stops those three things? If so, how?

It stops it because if you don't have to pay something back to the company, and the company mistreats you, you will leave. If you do have to pay the company, you won't leave unless the harm caused by what the company is doing to you is greater than the amount that you have to pay back.

I suppose technically that isn't arbitrary because it's not infinite, but if the amount you have to pay back is big, so is the harm that the company can get away with doing to you.

...would you even dismiss giving someone a raise on the same grounds?

If the company gives you a raise, and then harms you, that isn't going to stop you from leaving, unless the raise is to an amount above market rate.

How about deferred bonuses? ...how about just annual bonuses, where you typically expect a significant sum, such as in the financial industry? I'm really trying to figure out the nature of your problem.

...how about penalty clauses in many other contracts? When you're doing M&A, you often agree to something like, "...and if I pull out of the deal for anything other than [acceptable reasons], then I'll have to pay you a penalty." In real estate or other transactions, people often put money down in the same sort of way, basically just pre-paid. Are all these things absolutely terrible, because then the counterparty will just arbitrarily harm them? Why have they stuck around so long, even when there are sophisticated (and possibly well-capitalized) parties on both sides of the transaction?

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Of course, if you really want indentured servitude, I believe that clawback provisions on training costs are legal.

But even this is not sufficient to guarantee employee retention: the new employer could just offer to pay the employee’s clawed-back training costs when he leaves the old employer, perhaps with some clawback provisions of their own.

Indeed, this is how a lot of young Singaporeans in Big Tech got their start: they went to elite American universities to study CS on the (Singapore) government dime, but were obligated to go back and work in the civil service for a period of some years or else repay the cost of their education. FAANG was all too happy to foot that bill (with some strings attached, naturally) in exchange for that sweet, sweet engineering talent.

Well, of course. This is what buyouts are for. If I am a talented football coach and some small school offers me a job for $200k/year for 4 years and I go 12-0 and win a D2 national title, and the next year USC wants to hire me for $10 million/year that is how the cooky crumbles. What my small university should have done is put an appropriate buyout into my contract, say a couple million dollars, such that they can now basically pay the next 10 football coaches using my buyout money.

The downside is that if I suck, they still pay me. This is what companies in tech (and frankly many places) dont want to do and is what the OP is describing. They want a 1 sided agreement where if I suck I get fired and if I am awesome I get no raises. That is silly.

the new employer could just offer to pay the employee’s clawed-back training costs when he leaves the old employer, perhaps with some clawback provisions of their own.

Yep. It's pretty common practice at some levels for people to regularly update their personal accounting of these things (including things like not-yet-vested 401k/ESPP/etc.). You want to know what your expected comp actually is over time. You want to have a process worked out for how to compute all those things when necessary (maybe even so you just have an approximation in your head already), so you can negotiate quickly if anything comes up rather than having to scramble to pull it all together at the last minute. If you've really got value and a new company will give you that bundle of money up front to get you, it really is incumbent on your current employer to compete to keep you.

Another pretty simple thing that is done (rather than a claw back, allowing them to go above and beyond just the mere cost of the education or whatever), not always tied to a degree, often in the form of something like stock options, is just a delayed bonus. "You just got this degree. We'd like to offer you a big bonus. Only catch is that we sign the paperwork now, but it doesn't vest for three years." That way, it's harder for a competitor to plunk down enough money to take them, they plausibly do get compensated in accordance with their increased value, but you only have to pay out if they actually stick around and give you another three years of value.

Some people will absolutely jump ship for more money as soon as they’re trained, but it’s nowhere near that high. But, you work for a hedge fund- I’m wondering if these guy’s treatment got suddenly worse after an acquisition? It’s been known to happen.

So what's the problem here? These people worked for the company for years at a certain salary with certain skills. You decide they need additional skills that the market is telling you loud and clear merit higher pay, but you evidently don't want to pay them. It's as simple as that. Say I'm a property manager and I oversee staff categorized as "general maintenance" who do things like cut grass, shovel snow, change light bulbs, and do small repairs. I decide they're useless because they can't do any serious electrical work so I train them all as electricians. How shocked can I be when they leave to take higher paying jobs with electrical contractors? When I took over these people were all maintenance men and were being paid like maintenance men. It would be ridiculous of me to expect to have a staff full of certified electricians making maintenance man salaries.

Edit: Reading these comments in tandem with the discussion from earlier in the week has really helped my crystalize my thoughts on the matter, which I didn't really pay attention to until recently. I had asked for some clarification of "abuse" and @SubstantialFrivolity provided me with an example, but now I'm seeing how this works in practice. It helps frame the divide more clearly: On the one had you have Trump, Musk, MTG, Vivek, and others, the common thread among them being that they have owned businesses and know firsthand how hard it can be to get employees. On the other hand, you have Laura Loomer, Steve Bannon, the MAGA base and the Fox News comment section, most of whom don't won businesses and aren't in senior management, who know how hard it can be to find a job.

The sentiments I see expressed among the MAGA faithful are that, if there is specialized work to be done, we should be providing education and training to Americans so that they can fill these desirable jobs rather than simply importing labor from elsewhere. The sentiments I'm seeing on the left are largely echoing that but with the added wrinkle where they suggest that the problem isn't so much a shortage but a shortage at the rates employers want to pay. Like OP's comment above, if an IT head doesn't like that his staff are moving on as soon as they have the training he wants for the job, rather than pay a market rate, he instead cries shortage and imports someone at a lower wage who is tied to the employer by virtue of his immigration status. He gets around the whole "prevailing wage" issue by taking advantage of the lack of granularity: The relevant job category is probably something like "IT person", not "IT person with special training on x, y and z".

I am, however, sensitive to there being actual shortages in certain occupations that we can't just wait 10 years until there are enough qualified people available. It seems that the solution here is eliminating (or greatly restricting) temporary visas and replacing them with more permanent visas. If we're talking about truly exceptional people, the sponsoring company should be willing to take on the risk that they'll jump ship. They should also be willing to pay a relatively high application fee. In other words, hiring foreign workers should be more expensive than hiring native workers. If bringing over a single foreign worker requires a $25,000 nonrefundable application fee, legal fees, and no guarantee that the sponsored immigrant won't jump ship to a company that offers him more money, you're not bringing him over unless there really is a shortage and you're confident you can keep him.

In other words, hiring foreign workers should be more expensive than hiring native workers.

This is the entire sticking point and every single word I have heard from the Vivek/Elon crew is just squid ink trying to cover up this incredibly simple issue. If there aren't enough qualified domestic workers, you can pay a substantial premium to bring in these extremely talented geniuses from India or Haiti or whatever. This is such an insanely simple compromise that neatly answers all of their stated objections - but they'll never agree with it because their unstated motivations are directly opposed to it. I'm very firmly against the H1B program and equivalents like it in other countries (like the god-awful deal my country just signed with India), and I have zero trust for the people on the other side given that there's a perfectly acceptable compromise that accomplishes all of their stated goals which they refuse to touch. Why the fuck should I believe Elon when he says he needs to fly in a genius from Delhi when you can see that Tesla is actually hiring H1Bs for positions paying 75k?

I am, however, sensitive to there being actual shortages in certain occupations that we can't just wait 10 years until there are enough qualified people available.

I'm... less sensitive to this. I think these things almost never happen. Especially because very few occupations really take ten years to ramp up production unless there are significant restrictions in place (the occupation that comes closest in terms of number of years would be doctors, but when there are problems there, the absolute most likely explanation is supply restrictions). For the most part, we should probably just let the price system operate.

As mentioned in the linked comment, it is inherently a political decision as to whether the supply curve should be purely the domestic one or the world one. This is not necessarily an easy choice. You ask Bryan Caplan and he'll take gainz from trade every time; you ask the unions, and they'll take domestic salaries every time. But I think that we should just be honest that that is the political decision to be made, not hiding a political decision inside what would inevitably be a political determination of whether there is a "shortage".

In other words, hiring foreign workers should be more expensive than hiring native workers.

I sort of reject the idea that you can accomplish this by government fiat. Supply curves slope upwards. If the "current price" to hire a domestic employee is $X, but the gov't only allows you to hire a foreign employee for $X+Y, then just look back to the domestic supply curve. You could hire more domestic employees for $X+Y, which would bring the "equilibrium price" of hiring domestic employees up to $X+Y. Which, first, if the price mechanism is actually operating domestically, you don't actually want to do, because the market has already cleared. Second, if our plan is to always make it more expensive to hire foreign workers, it in turn requires the government to bring up the cost of hiring a foreign worker to $X+Y+Z. Rinse and repeat. Like, mayyyyyyybe someone could define a sense of "if the (I don't know) "medium run" supply curve has elasticity below some threshold, then..." but good luck estimating it or having a usable definition of "medium run" to use for your estimation.

If bringing over a single foreign worker requires a $25,000 nonrefundable application fee, legal fees, and no guarantee that the sponsored immigrant won't jump ship to a company that offers him more money, you're not bringing him over unless there really is a shortage and you're confident you can keep him.

I think this would be equivalent to just saying that we're going to choose the world supply curve... but with a tariff. It would essentially require adopting the meaning of "shortage" to be "with respect to the world supply curve". Of course, the tariff would still cause a ""shortage"" (not to be confused with "shortage") with respect to the world market clearing equilibrium that would be obtained without the tariff.

What you're asking for is loyalty, but can the employees expect that loyalty to be reciprocated? You're asking them to be suckers, and when they refuse you replace them with people who don't have a choice.

It seems to me the best situation is one where you have a relatively homogenous high-trust but still individualistic society where employees and employers basically treat each other like second-cousins. They have some sense of loyalty, but not too much. A kind of nepotism occurs on the margins, but it's no big deal. Employees have a sense of obligation to their employer, and vice versa. Fundamentally, they still perceive each other as members of the same tribe with a shared fate. They won't ignore their own self-interest, but they won't actively try to screw over the other just for some marginal short-run benefit. This is the sweet spot where capitalism is compatible with evolved human psychology, but it's quite precarious and unstable. Very few human groups throughout history have been able to maintain these kind of social arrangements for long at the kind of scale necessary for industrial civilization. Jews are really good at it (though partly just because they're more often literally second-cousins).

Go too individualist, too diverse, and too low trust, then there is no loyalty. Everyone defects, and they're not wrong to. The employees do not see the training as a reason to be more loyal to the company, and they're right not to. The company will betray them for mere convenience, and the only thing possibly standing in the way are government regulators. It's really difficult to unscramble egg, and most people are still furiously stirring it up as much as possible.

Employees have a sense of obligation to their employer, and vice versa. Fundamentally, they still perceive each other as members of the same tribe with a shared fate. They won't ignore their own self-interest, but they won't actively try to screw over the other just for some marginal short-run benefit.

That seems to be where line managers are incredibly important and influential. The differences I've seen (and felt) between "people are staying when they could leave for a slightly better offer because this manager is great to work for" and "people are leaving for a slightly worse offer because this manager is terrible" is... rather impressive.

I can speak from personal experience on this.

If my current manager ever retires(and he certainly has a plethora of opportunity to do so), I won't be out the door, but I'll definitely be hunting for a new job, given that the other managers in my company are less than stellar.

Well, unless they do something like spiral me off into my own department and let me manage everything on my lonesome(which I'm already doing, but, eh.)

And atleast one other person I work with feels similar, to the point where he's given me a scare moment when joking about looking for a new job.

You see a version of this internally in larger organizations. Some managers always seem to have an open requisition. I wouldn't want to work for most of them.

Acquisitions usually have a higher turnover rate than usual, but a 100% 50% annual turnover rate is insane very high and I'm very doubtful that half your workforce immediately bounced from a job they were happy with just because they got some experience. Some people will absolutely do this the first chance they get, but having half a company made up of these guys would have to be the worst luck I've ever heard of.

In the end it's just the internet so I can't fact-check what you say, but training your employees only brings so much goodwill and I suspect that either the acquisition made their job a lot shittier or the job already had high turnover and you got suckered on the purchase.

The timelines are also very short here which to me also points to something more than just people getting poached with a better offer. People who already have a job usually take some time to find a good option when looking for a new one. That 50% who left within half a year either started looking immediately or wanted out badly enough they took the first thing that gave them an offer. For some of them, probably both.

To get back to the point about H1B workers, your post shows the problem with H1Bs very well. Your company is unable or unwilling to provide sufficient benefits to retain US workers, so you turn to cheap foreign labor instead. This is bad for local workers' pay and erodes the local talent pool as less locals can find jobs where they can gain experience.

Edit: Lewis2 below pointed out that the turnover was 50% over a year (I read the post as 50% over 6 months). Edited to strike a section and make a couple changes, but I still think the rate is high enough to be indicative of other problems pushing employees away rather than them just gaining new options.

you turn to cheap foreign labor

Yes. And more insidiously, captive labor. If this foreign worker is fired then they are quickly deported, unless they can very quickly get a new job with the same title as their previous one. They can change jobs, but it again has to be approved as a comparable job with a comparable title and responsibilities. This specially skilled person with talents we cannot find in US workers is largely forbidden from growing and branching out in their career.

That friction in changing jobs and their precarious position in America is what I believe employers truly want. Americans and green card holders are free in their employment prospects. If this trained American in the anecdote is qualified for a new higher responsibility role and title at Google, then he'll go for it. His comparable H1B coworker will not and will be much more locked in. What employers wish they had were enforceable non-competes and captive workforces.

To get back to the point about H1B workers, your post shows the problem with H1Bs very well. Your company is unable or unwilling to provide sufficient benefits to retain US workers, so you turn to cheap foreign labor instead.

This. While I might be typically-minding here, I think there are significant costs to switching jobs. Interviews. Paperwork. A longer commute or possibly even a movement of residence. The risk that your new job will suck even more, or that you will get fired and find yourself unemployed. Loss of social relations at your current job.

I would expect that few will switch jobs for a few percentage points in gained utility, so if your workforce attrition is that high, you are clearly not a competitive employer. The libertarian/capitalist solution would be to either offer more utility to your workers or close up shop, not keep your company afloat using people whose participation in the labor market is constrained.

Also, I am a bit skeptical of this whole "from clueless windows admin to in-demand cloud specialist in a few months" story. I mean, you can train a button pusher to push new buttons, but at the end of the day you will still have a button pusher. Likewise, you can turn a bad/good programmer in one language into a bad/decent programmer in another language. This can all improve the immediate use of your worker, but there are no magic shortcuts. Going from "badly managing a few windows machines" to "working at Google" would imply that the employee had some further hidden skills, IMO.

Furthermore, I was under the impression that times are lean in the IT sector right now, with AI cutting into the lower end jobs.

Also, I am a bit skeptical of this whole "from clueless windows admin to in-demand cloud specialist in a few months" story. I mean, you can train a button pusher to push new buttons, but at the end of the day you will still have a button pusher.

Running a standard cloud installation is button-pushing. Building and running a nonstandard/bespoke datacenter, even if unwise, requires a lot more ability. So it's not a surprise the people doing the latter were able to learn to do the former. Now they're still high-ability, but know how to push an additional set of buttons, so they're worth more than either your run-of-the-mill button-pusher or what they were before.

running a nonstandard/bespoke datacenter, even if unwise, requires a lot more ability.

Total tangent, but a good story.

Early in my career, I was in a low level position that randomly physically placed me in the same room as four high-end infra guys. These dudes had been building complex system for decades and really knew their shit. They had a lot of opinions.

Two of them came up with a very nonstandard and bespoke way to manage the huge cluster we were running. The other two came up with a different very nonstandard and bespoke way to manage the huge cluster we were running.

The first group worked for at least the two years I was there to get permission from the higher-higher-higher ups to implement their solution. IIRC, they built like a mini deployment using old servers to demonstrate the feasibility. They wrote innumerable contingency and rollback plans. I left before it went live, but I heard they, eventually, got permission for a scaled down version of what they wanted. I think they got a kind of pat-on-the-head employee-of-the-month reward, as well as a paid trip to some cloud infra conference.

The second group left, raised some money for their idea, and then got their shit deployed across all of the operations of a massive specialty data center company. They're both giga-rich now with multiple layers of fuck you money.

To me, this is the triumph of markets of an individual firm. If your firm doesn't like your idea, but you have high enough conviction, it could be worth risking it to try to get your idea out there. Now, the odds of success are against you, but I find it far more disheartening to have the eventual mitigated success of the first two guys, rather than a potential start-up flame out.

The second group left, raised some money for their idea, and then got their shit deployed across all of the operations of a massive specialty data center company.

I design things. Anything I design on company time is company IP and supposedly they'd sue me if I left to make my business selling their IP.

Now, the odds of success are against you, but I find it far more disheartening to have the eventual mitigated success of the first two guys, rather than a potential start-up flame out.

Risk vs. Reward and all that, right? If I'm at a point in my life where I'm not responsible for others and have a bit of a safety net, the gamble is a great idea. If I'm the sole provider for others, well... maybe sticking with the safer route is better for me and those that rely on my income.

A hedge fund buying up small (and likely struggling) engineering firms and divesting them of their IT infrastructure to cut costs is likely not really a good place for existing employees to be. Them leaving once the transition is complete is probably what the management of the corporate raider wants anyway -- then they can hire cheap juniors who know nothing but the cloud in their place.

IT is well known to be a field where you almost always have to switch companies to get appropriate compensation. You graduate, get an entry level job, grind for a year, then ask for half of the 50% pay raise you would get for leaving and get it denied.

I think you misread whodatmiami’s comment. He said 50% left within a year, not that 50% left within six months and 100% within a year.

These are still very short timelines that point to something else going on... maybe a return to office mandate for a department that had been remote?

Good catch. I got mixed up between his mention of half leaving and timeframe of "gone in six months" to get an annualized 100% turnover. I'll edit my post to note that.

50% annual is better and a year makes the timelines a lot more reasonable for someone leaving post-training, but those numbers are still concerningly high.

What is your ideal situation here?

The implied trade is: I won’t immediately quit when you want to move everything to azure, and you will train me to use it. Eventually I’ll move on, and you hire a new junior.

This seems…totally healthy? This also seems like the exact type of cycle that H1B workers destroy.

the point is we trained these guys up in Azure and AWS, and instead of sticking around and thanking us for training them, they leave as soon as they had a better opportunity.

I'm sorry, but you kind of sound like you're not very good at business. Allow me to digress heavily.

Businesses compete, in many many ways. One of the ways they have to compete is to acquire labor and talent. This is an extremely underappreciated fact about capitalism and entrepreneurship, especially by the typical leftists who hate corporations. Most people have never even thought about trying to start an actual business. They've never even thought about the possibility of hiring employees for their business. They've never even thought about what that process looks like. Once you even start thinking about it, you have to start thinking, "Well, uh, where/how am I going to get my employees?" Let's start by imagining that you think you might be hiring for a low-skill position. You're thinking of starting a brand new business; you can't just pay them the farm; you have no money; you might not have even started the business yet; you're still just even thinking about it. Well, you might think, maybe you can get by with some teenagers working in the summer; you might not even need labor all year long yet; this could be a really good 'in' at relatively low cost, and as your business grows, you could think about having the money to hire more full-time, possibly more skilled folks. What then? Well, how are you going to convince a teenager to work for you for the summer? You have to think about them, their interests, their desires, their alternatives. Maybe they could work for a nearby grocery store or fast food joint instead. How much are those places paying them? What are those working conditions like? You've got to beat that. Not necessarily just in terms of price, but you've got to figure out a way to offer them a situation that they'd prefer.

This is the beauty of the entire thing. Rather than the caricature of employers just thinking about how they can screw over workers, it is imperative for prospective employers to think, "How can I package together a job that is attractive to a prospective employee?" At the same time, you also need to figure out how to make the economics work - they obviously need to create enough value as an employee to overcome the cost. And here is where it gets extra beautiful.

Imagine the world from the perspective of a low-skill individual, like that hypothetical teenager. They'd like the produce value for the world and make money for themselves, but they have no bloody clue how. The unfortunately all too common failure mode is to just rebel against the entire system, become a commie, and imagine that it will prevent them from needing to produce value or to even think about it. It's sort of amazing that this failure mode is so common, because the solution is already right there - we've mobilized millions of people across the country who are automatically, on their own accord, spending significant amounts of effort and brain power specifically for the purpose of figuring out how to create an economically-viable pathway for those folks to add value... in a way that is better for them than any other option they have in front of them! How incredible is that?! Without even lifting a finger, they have hoards of folks trying to figure out what types of things they want, how they can contribute, and how best to then deliver to them what they want. Of course, those hoards are going to take some cut for the work. If the individual goes about doing that work themselves, say, starting their own business, figuring out the value proposition, etc., they don't have to pay that cut.

It's easiest to think about this at the low-skill end, especially because that's where it's most stark, but it continues up a significant portion of the ladder.

Back to your job. Your job is much harder than the employee's. You have to do all that work! You have to figure out what they value, how you can provide them the best possible value, in a way that contributes to further value and which is economically viable. That's a damn difficult job. If you don't do it well, you will lose the competition. Someone else will take your employees, make them even more productive, and give them even more of what they value. You may try to kick against the goads and complain that you're actually providing them extra value in terms of skills. It doesn't really matter. Figure it out. Lots of schemes have been used over time to handle this sort of situation. Otherwise, consider that perhaps your business isn't as viable as you thought... or maybe you're just bad at it and losing to the competition.

You're saying H1b allows you to chronically underpay native labor such that it instantly leaves the minute it can?

Might not be the argument to float here.

You may not be very online so you are forgiven for missing this, but part of the H1-B debate memes is whites are complaining that companies won't train them for roles that they are hiring H1-Bs for.

OP is arguing his company is in fact training white people to bring them up to speed instead of laying them off immediately after the acquisitions.

Yes, I get that.

But he isn't paying people what the market will bear for those skills. The only way he can keep workers is if they're legally tied to his company after they are trained.

So he isn't paying market rate for those jobs. That's how people can leave for more money. If he were paying the going rate, his newly trained ungrateful american workers would have nowhere to go.

Those other companies apparently value those workers much higher than OP does.

Hmmm, fair points. Need more info. OP did any of the trained people get raises?

They are training them, but then not paying them market rates.

The Americans that they could train to perform the functions they are having the H1Bs perform are an order of magnitude, or more, less talented than the people he is describing training.

Yes there is a problem of American companies not training people. That is partially because of H1B, but also is about them not being smart about contracts. Not every employee should be able to quit on 2 weeks notice, but also they shouldn't be fireable on 2 weeks notice. Sometimes the ideal relationship is one where both parties are bound for a longer duration. This is an obvious example. Just sign them to a longer contract that guarantees their salary for multiple years. The problem is trying to have your cake (easy firing) and eat it too (retain said people you can fire on a whim). Pick a lane.

But isn’t the point that H1-B visas disincentivise US companies from investing in and training up native talent… which OP’s comment seems to support?

yes? I parsed the point of OP's comment as "and this is why we won't train you fucking retards it's a waste of money if you actually improve you just leave"

But how can they just leave if they're being paid market wage for those skills?

Wouldn't it be difficult to find work at a significantly higher wage?

The solution is to train them and pay them more so they won't leave.

Maybe you have reversed causality here? H1bs can be kept on payroll without having to offer them anything more, you can keep salaries down with no complaints. Americans who learn new skills and gain more experience want to increase their earnings, but companies don't invest in wage growth so people have learned you need to jump ship regularly to keep earning. This is not just an American software thing either, across the Western world salaried employees seem to have learned the lesson that you need to change jobs every 2-4 years to actually make serious progress in earnings

You're not taking into account that these people aren't learning new skills on their own, it's due to the hedge fund's efforts and support that they learn stuff. And how do they repay this generosity (remember, the hedge fund could just have summarily dismissed them which based on "these people have no idea how a domain controller works" basically seems like the right decision)? They leave as soon as they have new skills so they can go off and be mediocre in another higher paying job.

  • -14

Solved problem. Given them a long contract based on completion of the training.

how do they repay this generosity

I owe absolutely nothing to a hedge fund. Less than nothing. They are perfectly unloyal to me and me to them. In this maximally mercenary relationship they will pay me enough to stay or they won't. And if they think employing me is a bad deal then they'll fire and my whole department without a care.

The above is not hypothetical. I worked for a company that was purchased. Not by a hedge fund but by a larger company. After my new stock vested I bailed within a few weeks. They made the vesting period too short and I got a lot a lot of it in a year. Later they fired most of my department since the company wasn't profitable enough and I worked for R&D which was first on the chopping block. Our lack of loyalty to each other was so well balanced.

And how do they repay this generosity (remember, the hedge fund could just have summarily dismissed them which based on "these people have no idea how a domain controller works" basically seems like the right decision)?

It's not generosity, it is a business decision. The chances are these smaller shops have got some kind of weird IT kludge mess of stuff going on that only the people running it know how it works. You could fire them and bring someone else in but then they have to untangle someone else's work, which will take time, and money. Training someone isn't that expensive and allows you to hit the ground running from day 1.

That some of the employees will then leverage that training into a better job is just the cost of doing business. It's not a friendship it's a transactional relationship. The hedge fund wasn't providing training out of the goodness of their heart it was based upon the cost/benefit. They got 6 months of time where the IT person was keeping everything running, presumably starting to apply their new skills. The employee owes them nothing beyond the work they were paid for. And if the hedge fund can get someone else in for less than the IT person would stay for later it's a win win. They got through the transition period (which is the toughest part with all new IT staff, when assimilating a new company/branch) successfully.

Successful hedge funds aren't stupid, if they are using this model it is because in general it is maximizing the chances of success.

Alternatively the hedge fund could actually choose to buy up companies with employees who do know how a domain controller works.

Those companies tend to be well run and thus more likely to be profitable and likely to be correctly valued. There's nowhere near as much alpha in buying up a company like that.

And the flip side of this is that as soon as a worker is negative EV or whatever the appropriate metric is, they're liable to be laid off. This is just the equilibrium where neither party can trust the other and there is at will employment. I imagine economists like it and would say that the employee who moves and gets a raise or a company laying off unproductive workers is more efficient, and what do I know, maybe they're right.

I was chatting with a Japanese employee of a large company with offices in both Japan and the US. He says that rather than layoffs, they get put on 'career improvement plans.' In his case, it involved completely retraining his specialty and moving his family to the US, but he kept his job and stayed at the same company. We could probably have this situation if we wanted, but I'm unsure it's actually superior.

sticking around and thanking us for training them

Why should they? What reason did you give them to? Do you think their attitude is worse than yours?

Half of them within a year have left to take senior admin jobs.

They're gone in 6 months. As soon as you train an American, they are gone.

So what is it? Half, or all?

What reason did you give them to?

This reason:

training them

It's almost certainly better to just fire low performing staff and get in high performing staff, even if they have to be paid more. American mediocrity has been given free reign for the last few decades and desperately needs to be put back into its place. Giving these people training just means they know more stuff, it doesn't fix the fundamental problem with them that they are mediocre. For that replacement is the only solution.

EDIT: Actually thinking more about it, training them so they leave of their own volition and go be mediocre at your competitors so you can then hire higher caliber humans may well be cheaper than redundancy etc. so maybe it's not so bad an idea after all...

  • -16

training them so they leave of their own volition and go be mediocre at your competitors so you can then hire higher caliber humans may well be cheaper than redundancy

The old joke goes that if you want to get rid of someone without firing them, give them awards and hope they can parlay that into a new gig somewhere else. Sometimes, even getting them poached by some other division within the same company is sufficient to get them out of your hair, if you're into perverse middle-management incentives.

Does the hedge fund thank employees who stick around?

I agree but for a different reason. Basically job hopping is endemic to the American labor market. Nobody trains because you aren’t going to keep the guy you trained, he’s just going to take that certificate and put it on his resume and be gone long before you recoup the costs of training him.

I used to work at a nursing home and it was this all day long. They foolishly had a training program for CNAs. People would take the trading and be gone within a month because they had something on their resume that was valued in the market. They go to a hospital and make the same money or sometimes more, have fewer patients and more PTO. It was stupid, especially since the company couldn’t protect itself from that kind of thing. Labor laws are such that you can’t insist that people you train stick around long enough to pay back at least the cost of the training. They were basically training the nurses for the hospitals around them for free. And this happens all the time. You train someone, and he gets poached. Then everyone stops trying to train and focuses on poaching from places that are still foolish enough to waste money training. Everybody then complains that entry level work doesn’t exist, but takes full advantage of the few entry level jobs out there.

Labor laws are such that you can’t insist that people you train stick around long enough to pay back at least the cost of the training.

Agreed with @Botond173. You can absolutely do this. Well, not "insist", but you can include either clawback provisions (retrospective "if you leave within X years, you have to pay us back for the training", which they have to agree to when they sign up for the training program) or delayed comp that only vests after some number of years (prospective, acknowledging that they're worth more now, but you only have to actually pay it out if they stick around for X years). They're both pretty common.

Disagree: other employers can pay the clawback (probably with their own terms and conditions attached) or buy out deferred comp.

They can, but a) it makes it more expensive for them, and thus somewhat less likely and b) it provides you with some form of protection/compensation.

There’s a $20 bill on the sidewalk for people who can solve this coordination problem.

My money is on the Amish.

Capitalism is the best alignment strategy known to mankind.

Pay people less while they are still in training, then once trained provide them (slightly less) pay and benefits as compared to what they could find elsewhere with their new skills and all your retention issues largely disappear.

If nursing homes are all on the brink of insolvency or something then perhaps we need a larger discussion on how nursing homes are funded, but that's hardly a good reason not to train people if those are skills you require.

Labor laws are such that you can’t insist that people you train stick around long enough to pay back at least the cost of the training.

Why?

Given that apparently the majority of these guys picked up the necessary skills quickly and managed to get better jobs elsewhere it's hardly charitable to call them all mediocre based on the very little you know about them.

To the OP, I think you've buried the lede in your post: somehow the majority of your workforce have all managed to find better jobs in a short span of time. Make your job roughly (or even slightly less) attractive than the "better" jobs they have and you'll have much less churn, people as a rule of thumb prefer stability and don't want to pay the costs of switching jobs if their alternatives are all about the same.

If you don't want to compete as an employer that's your prerogative, but it's no mystery why people would leave if apparently nearly every job is a better alternative to yours.

Because if my salary is 90k before I learn AWS, it will be 91k after I learn AWS and get my annual 1% raise. But $COMPETITOR is looking for AWS skill and is paying 105k. I'd probably stay at your company and take 100k, but I'm sure that asking a raise will either get me laughed at, or I will be successful but will get marked as "greedy"/"not a team player"/. So instead of dealing with the drama and politics, I'll just jump ship. Why did you make me do this? I would have been happy to continue working at your company if you had only been willing to recognize my increased value as an employee.

FWIW, I'm a manager and I deal with this issue all the time. I actually push to pay ambitious engineers more and do my best to make their work lives rewarding. It's a lot more expensive (in money and time) to replace a skilled employee than to simply give an existing employee a 10% raise. But alas, not everyone realizes this.

Aren't you assuming the employer was positioned to pay $105k in the first place? It may be, but not every company is capable of paying employees their market price.

Employees that work 10% harder don't necessarily create 10% more value.

If they can't pay 105k, they either don't really need that employee or they're in dire financial straits. Consider the cost of an $15k/year to retain a competent, productive employee willing to upskill, versus the saving $15k/year but incurring the cost of:

[a team short one engineer for 3-6 months (time to become fully productive, maybe more) + X months to find and vet a suitable candidate + >90k salary because the last guy negotiates his salary two years ago and the market raise has risen since then]

Not to mention you're taking a gamble on the new hire, who despite vetting may turn out to be incompetent, lazy, and/or an asshole. Maybe I'm missing something, but it sure seems easier to just pay 15k and avoid all that pain, plus you might even get some loyalty in return. Certain members of my team are fairly loyal to me since I go to bat for them regularly.

Hiring and onboarding is expensive. If you can't pay an employee 10% more then you certainly can't afford to replace them.

If you can't pay an employee 10% more then you certainly can't afford to replace them.

There are two different meanings of "can't" here, as the exiting worker likely intuits. It turns out companies can often afford to hire replacements when they "can't" give raises to existing employees. This is because when they're hiring replacements they're considering the consequences of not getting the work done versus the cost of the replacemenet, whereas when they're considering raises they're considering the consequences of paying more money versus just... not.

It may be, but not every company is capable of paying employees their market price.

Then that's their problem. There are a lot of things I can't afford at the market price; I don't buy them. Being able to pay market wages is part of running a business, the same as being able to buy inputs and deliver products to customers. Companies that are able to do this make money and companies that aren't go out of business. It's basic free market economics.

Of course.

That said, jobs aren't really fungible though? People take jobs for all sorts of reasons, including pay.

People take jobs for all sorts of reasons, including pay.

"Management was recently taken over by a bloodsucking hedge fund" is unlikely to create very many reasons to stay though -- if the also won't pay (the newly trained) market value, it's probably just the cherry on top.

It doesn't matter to the employee whether it's worth it to the employer to pay him the $105k. As long as someone else is willing to pay it, it makes sense for the employee to leave.

But the phenomenon of "I can make 1.03X by staying, and 1.20X by leaving" is so common in tech (and often applies to employees going both ways between similar jobs in two companies) that most of the time it probably is employers taking advantage of employee reluctance to switch jobs rather than employee cost exceeding value.

It doesn't matter to the employee whether it's worth it to the employer to pay him the $105k. As long as someone else is willing to pay it, it makes sense for the employee to leave.

Yes, I was not quibbling with that at all.

But the phenomenon of "I can make 1.03X by staying, and 1.20X by leaving" is so common in tech (and often applies to employees going both ways between similar jobs in two companies) that most of the time it probably is employers taking advantage of employee reluctance to switch jobs rather than employee cost exceeding value.

That's plausible but I guess I'm not sure it's that common. A lot of employers are just bad at making money, and this is the norm, and they're not positioned to pay people their market value.

Whenever I've been privy to this sort of discussion (which is not often to be fair), the thinking from management was "why should we pay him $x, we already have him for $y" (where x > y). They were happy to pay a new employee the higher rate, but disliked paying market rate for an employee they already had.

If you need an AWS capable employee for your business but can't afford to pay close to market wages for one you can hardly expect them to stay out of the goodness of their heart, and should probably re-evaluate your business model.

Migrating them to our Azure tenant is pretty easy, but we are stuck with a bunch of useless IT people (initially), usually White. It's nothing agains them, but they usually know nothing. I don't want to bore anyone with the details, but these people have no idea how a domain controller works, let alone anything in the cloud.

There is far greater demand for IT people and software developers than there are competent IT people and developers. The median software dev is an idiot, being baseline competent puts you in the top quintile of tech workers (if not higher) in my estimation. Even more H1Bs won't really fix this because for every actually good foreign dev there are several dozen borderline retarded Indians with the same credentials and qualifications (but not the actual competence).

Also, likely not coincidentally, most of the competent foreign devs I've worked with are either Eastern European or East Asian. Hispanic devs seem half decent, at least in comparison to Indians.

I've had good experiences with Koreans and Mexicans. Not that I have a huge sample size, but so far so good.

After hiring numerous developers during the last month I have concluded that a big portion of the difference between the competent devs and the incompetent ones is that the competent ones are always learning. It isn't necessarily an IQ thing, it is largely an attitude thing. For example some devs with 10+ years experience type extremely slow on a keyboard and don't use any keyboard shortcuts. They can't use git from the terminal and simply fail basic tasks outside their narrow niche. Their attitude is that they just learned how to complete certain tasks and they do those tasks on repeat.

The best ones are trying new things and learning. The better devs often have some strange flavour of linux, like obscure programming languages etc. This isn't because these tools are productive, it is because they learned these tools out of curiosity. To be a solid developer one has to be curious, trying to do things in new ways, trying to understand why things are the way they are and trying to improve.

The Indians have a bad rep because they are the epitome of developers who became developers wthout any passion. Their parents told them to be developers and they grew up in a country in which making money is a priority. They learned a Java version in college and every problem can be solved with the one tool they know. They often work hard but the attitude is solve the task with the simplest possible solution without much engineering skill. When all you have is a hammer the world looks like it is made of nails.

There are of course passionate devs in India but they are fewer as so many people with no interest were pushed in. The irony of Indian devs is that they don't focus on the art side of development but on the hustle side. In practice the people who make a lot of money are those who focus on programming as an art. The lack of Indian open source projects Indians in more niche communities such as functional programming etc says a lot about the attitude.

The best career advice for devs is to not just do what you know but to try new things and learn. Constantly try to do things faster, better, with other tools and from another perspective.

The best career advice for devs is to not just do what you know but to try new things and learn. Constantly try to do things faster, better, with other tools and from another perspective.

notices your username is functor

checks out

Trust a category theorist to give that particular bit of advice...

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