Comments on: Unemployment Today: The Marginal Efficiency of Capital http://hrringleader.com/2009/12/21/unemployment-today-the-marginal-efficiency-of-capital/?utm_source=rss&utm_medium=rss&utm_campaign=unemployment-today-the-marginal-efficiency-of-capital Leading, Coaching, & Innovating with Trish McFarlane Fri, 18 May 2012 14:26:38 +0000 hourly 1 http://wordpress.org/?v=3.3.2 By: Trish http://hrringleader.com/2009/12/21/unemployment-today-the-marginal-efficiency-of-capital/comment-page-1/#comment-948 Trish Sun, 03 Jan 2010 21:30:21 +0000 http://hrringleader.com/?p=1227#comment-948 @Paul- You didn't do too bad for a Monday morning. I realize that applying the theory in the fashion I did is not exactly what Keynes had in mind, however, it was an interesting question. I enjoyed your comparison of both sides; keeping the high performers vs. the low performers. Always love your contribution to the discussion here.. @Margo- Thank you and I am sorry it made you sad. It is reality thought that certain companies value employees more than others. The challenge is to find on that values the skills you bring. I know you'll find that in 2010 my friend. @Joni- I love throwing ideas out that can spark a debate in opinion. I want to thank you for adding some meaningful stats to the discussion. Very interesting to hear that the large companies you track are tending to continue to hire more experienced pros instead of opting for more junior, less expensive candidates. Thanks for joining the discussion. @Kevin- You're right- performance is the variable that is important here that economics cannot account for. That's why there are marketing and HR gurus. :-) Thanks for commenting. And, what's this about Family Ties?!?! @Mike- Aren't you glad I asked you to post about flexibility and not economics?? @Paul- You didn’t do too bad for a Monday morning. I realize that applying the theory in the fashion I did is not exactly what Keynes had in mind, however, it was an interesting question. I enjoyed your comparison of both sides; keeping the high performers vs. the low performers. Always love your contribution to the discussion here..

@Margo- Thank you and I am sorry it made you sad. It is reality thought that certain companies value employees more than others. The challenge is to find on that values the skills you bring. I know you’ll find that in 2010 my friend.

@Joni- I love throwing ideas out that can spark a debate in opinion. I want to thank you for adding some meaningful stats to the discussion. Very interesting to hear that the large companies you track are tending to continue to hire more experienced pros instead of opting for more junior, less expensive candidates. Thanks for joining the discussion.

@Kevin- You’re right- performance is the variable that is important here that economics cannot account for. That’s why there are marketing and HR gurus. :-) Thanks for commenting. And, what’s this about Family Ties?!?!

@Mike- Aren’t you glad I asked you to post about flexibility and not economics??

]]> By: @HRMargo http://hrringleader.com/2009/12/21/unemployment-today-the-marginal-efficiency-of-capital/comment-page-1/#comment-808 @HRMargo Mon, 21 Dec 2009 23:23:36 +0000 http://hrringleader.com/?p=1227#comment-808 I concur with my colleagues who commented. Trish, this post is an interesting intellectual think piece. It is well researched, and extremely well written. Your post made me feel sad. Having taken the unemployment hit, I know how painful it is to recover from the blow. The two bullet points you cited above really say it all. The cost to replace an unemployed person is either high or low depending on your rank and value to the organization. I think what Americans need is hope for a better future. I concur with my colleagues who commented. Trish, this post is an interesting intellectual think piece. It is well researched, and extremely well written. Your post made me feel sad. Having taken the unemployment hit, I know how painful it is to recover from the blow. The two bullet points you cited above really say it all. The cost to replace an unemployed person is either high or low depending on your rank and value to the organization. I think what Americans need is hope for a better future.

]]> By: Michael VanDervort http://hrringleader.com/2009/12/21/unemployment-today-the-marginal-efficiency-of-capital/comment-page-1/#comment-805 Michael VanDervort Mon, 21 Dec 2009 14:41:12 +0000 http://hrringleader.com/?p=1227#comment-805 I can't even begin to comment on this. I am writing a Work/Life post for you. I am too busy trying to go on vacation to consider the cost/benefit analysis of human capital in Kynesian terms! Therefore, I <strong>choose</strong> not to. ;-) I can’t even begin to comment on this. I am writing a Work/Life post for you. I am too busy trying to go on vacation to consider the cost/benefit analysis of human capital in Kynesian terms!

Therefore, I choose not to. ;-)

]]> By: Kevin W. Grossman http://hrringleader.com/2009/12/21/unemployment-today-the-marginal-efficiency-of-capital/comment-page-1/#comment-804 Kevin W. Grossman Mon, 21 Dec 2009 14:34:44 +0000 http://hrringleader.com/?p=1227#comment-804 I really dig Keynesian economics, but in addressing human capital, and I know many folks hate that term, it's more messy and contextual. And although booms and busts come and go and the level or knowledge needed for any given position varies from industry to industry, I believe the constant in the equation is the average replacement cost with the long-term variable being performance. Consider: - Knowledge capital lost (whether from keeping a poor performer too long or losing a top performer) - Sourcing costs (still have to the right candidate with the right skills) - Recruiting costs (narrowing the field and making offers) - On-boarding and ramp training costs - Employee development and long-term training and retention costs More isn't better. The key here is identifying, hiring and retaining the top performers, but then again, that's why I'm in marketing and have only played an economist on an old episode Family Ties. ;) I really dig Keynesian economics, but in addressing human capital, and I know many folks hate that term, it’s more messy and contextual. And although booms and busts come and go and the level or knowledge needed for any given position varies from industry to industry, I believe the constant in the equation is the average replacement cost with the long-term variable being performance.

Consider:

- Knowledge capital lost (whether from keeping a poor performer too long or losing a top performer)
- Sourcing costs (still have to the right candidate with the right skills)
- Recruiting costs (narrowing the field and making offers)
- On-boarding and ramp training costs
- Employee development and long-term training and retention costs

More isn’t better. The key here is identifying, hiring and retaining the top performers, but then again, that’s why I’m in marketing and have only played an economist on an old episode Family Ties. ;)

]]> By: Joni Thomas Doolin http://hrringleader.com/2009/12/21/unemployment-today-the-marginal-efficiency-of-capital/comment-page-1/#comment-803 Joni Thomas Doolin Mon, 21 Dec 2009 13:13:31 +0000 http://hrringleader.com/?p=1227#comment-803 Trish - Paul is right - you are really challenging us on a cold December Monday morning - I had to reach for that third cup of coffee. I suspect that some of the analysts on our team will have some wildly divergent views on your excellent questions (although it is hard to find a Keynesian to admit it publicly). I'll leave the debate to them - but will share that we have been tracking a very specific trend over the past two years of companies terminating a higher percentage of management employees for reasons of performance, currently rolling at over 1/3 of all involuntary terminations - up from just about 10% at the beginning of the recession. As voluntary terminations have dropped, for obvious reasons, it appears that the large companies that we track in People Report are taking the opportunity to deepen their bench and add some talent. Average years of experience and years of education have also increased. While we track the foodservice industry specifically, my best guess is that you would see the same pattern in large big box or specialty retailers, banks and grocery. Joni Trish – Paul is right – you are really challenging us on a cold December Monday morning – I had to reach for that third cup of coffee. I suspect that some of the analysts on our team will have some wildly divergent views on your excellent questions (although it is hard to find a Keynesian to admit it publicly).

I’ll leave the debate to them – but will share that we have been tracking a very specific trend over the past two years of companies terminating a higher percentage of management employees for reasons of performance, currently rolling at over 1/3 of all involuntary terminations – up from just about 10% at the beginning of the recession. As voluntary terminations have dropped, for obvious reasons, it appears that the large companies that we track in People Report are taking the opportunity to deepen their bench and add some talent. Average years of experience and years of education have also increased.

While we track the foodservice industry specifically, my best guess is that you would see the same pattern in large big box or specialty retailers, banks and grocery.

Joni

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