[ameister14]

I agree, the yield would be a major problem.

In order to solve the problems you mentioned, it's confidence and a particular mindset you need, not simply skill. I had overlooked that.

I think you could actually keep employees, though, with the right management. There are lots of reasons she would wait six months before the giant raise. Money isn't actually the main motivator for a lot of people, and with the knowledge that she is appreciated and people depend on her as well as the fact that she will be better paid upon contract negotiation at end of term, she's more likely to stay.

Oddly enough, lots of people want to have a career. They just don't expect to get loyalty from a company anymore and so don't give a company theirs.

If training is specialized, why not pay for people to go through some external training program in exchange for contract? I know some companies do this now for Rails and it's common for other skills.

Master craftsmen have apprentices. It's a model that works, that's all I'm saying.

[rmc]

So you're suggesting that the company change how it does employment to have more old fashioned, long term employment. But how do you convince someone of that? Everyone is saying "We're different, we'll look after you!".

You could do it with contracts & law. Offer 10 year salaries-index-linked-at-a-minimum employment contracts. Employment contracts that specifically state the employer won't do things like outsource, (or if you're in USA won't do 'at will'). Employment contract that'll give 5 times the legal minimum of redundancy leave. Require that upper level management/directors don't get bonuses if there's been any pay freezes or pay cuts. Lots and lots of little things like that might be a way.

This will (obviously) restrict the business, and limit its resaleability. ("Come buy us out, you just have to pay 50 people for the next 8 years").

[ameister14]

To be honest, a lot of it is about the character and credibility of management. If you work for a guy who is openly against outsourcing, you can generally expect them not to outsource. If you work for someone who was hired by the board to cut costs, you can expect them to do that in any way possible, even if it harms the company long-term.

Yes, contracts play a role in this and it would definitely limit a business' sale price. But the thing is, if you're looking long-term, why would your exit strategy be acquisition?

Money is the main motivator in financial services. People don't really have any other metric to use for their performance, so they are paid a lot. In other industries, though, you have many alternatives to pure financial reward, and people are actually happier.

I don't know if this would entirely work or not. I'm just saying that it makes sense to me and that many people value stability and appreciation for their skill a great deal.

[rmc]

Sure, the management matters, but how do you convince a prospective new hire of what the manager believe? You are then limiting your possibilities for new management hires.

Other non-financial industries use money aswell. Doctors for one.

[ameister14]

That's where brand management and PR come in. Plus if you foster a certain environment in your company when someone comes in they can feel it.

Actually the medical profession is an interesting example. Doctors get paid very little initially and don't move often.