Imagine a perfect labor market where doing anything takes an employee 5 years. Ie if they don’t stay 5 years, the output value is 0, salary is sunk cost. Imagine employees are perfectly mercenary and will switch instantly if offered a better salary.
How does this market evolve?
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Contracts with end-of-term bonuses and clawbacks of salary, and universal non-compete agreements with large-ish timelines.
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So cost of poaching = match salary + npv of bonus as signing bonus + a separate new bonus?
Bonus arms race...
Do stock options approximate this cheaply? To the extent that a rocketship recognized as one creates a preferential attachment as options lottery win becomes more certain by attracting talent. So cheap bonus arms race where risk is externalized from investors to employees? 🤔
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