Their market value probably isn't $111k, hence their existing employer being unwilling to match competitors' salary offering for a trained member of staff and pick up the tab for the training.
Person currently earns $80k. Training costs $20k.
Rival company will be willing to pay $90k salary after training to poach the developer, which means the current employer may end up forced to counter offer with $91k salary after paying for the training. 91k + $20k in training fees = $111k
Competitor does not pay $111k because competitor does not pay for training. Which was the entire point of the exchanges above
You could of course question why a company would train their employee at all if the market rate for an already trained member of staff was about $90k. Because retaining an existing member of staff at an $80k salary after paying $20k for their training happens to pay for itself after 2 years. Its quite sad I feel I have to post the calculation to avoid further downvotes, but its:
(($80k * 2) + 20k)/2 = $90k
Nobody is asking how to add numbers together. I just think you're missing the point.
Whatever a competitor is willing to pay, the company that provided the training can just pay that and not risk their employees being poached. Additionally, it isn't free to poach employees, they will have training costs no matter what. In other words, after training you raise their salary.
> Whatever a competitor is willing to pay, the company that provided the training can just pay that and not risk their employees being poached.
Yes they can, if they want to go out of business.
If I spend $20k to train a new employee, I can afford to pay them their value to me - $20k (less than that if I want to make a profit, but this is the maximum that allows me to stay in business). Meanwhile, my competitor waits 4 weeks for me to do the training and offers their full value. Now I can either let them go, or match the offer - but either way I'm down $20k, while my competitor comes out even.
So you can imagine why I might not want to spend money on training.
Given your other points, this is only a problem is the cost of the portion of the training that is transferable is more than the extra cost of poaching (over that of hiring a fresh employee). As the job market becomes more liquid (decreasing that poaching cost), this becomes the case more and more.
It isn't free to poach and onboard employees, but it's less than the cost of training in a huge number of industries, especially if the training comes with a recognised professional qualification attached to it. If I spend a large fraction of their annual salary on supporting them through a qualification I might well give them a pay rise afterwards, but a competitor able to extract similar revenue per head from trained staff can always afford to offer them a bigger pay rise after I've picked up the tab for their training. I'm only in profit whilst providing training if I can pay my staff less than their marginal revenue product for long enough to cover that overhead; ideally it would be before they've finished and got the certificate but that's not always possible.
And hence, in the original example, the company providing the training ending up spending $111k on their member of staff over the course of the year to head off a competitor's $90k offer, even if the employee isn't worth $111k (Considering your original contribution to the thread was to argue the competitor wouldn't pay $111k, I think accusing me of missing the point is a bit rich...)
