A more flexible labour market would be one of the most powerful tools. This is not just because the people with poor fits can be let go (and might move to other jobs where they are more suitable). But when employers know they can get rid of poor performers easily they are more likely to take risks on people who might be good; if they can't, they're more likely to fall back on qualifications, credentials, experience or word of mouth recommendations.
Of course our legislative framework overall is fairly flexible. But there are large sections of the economy - i.e. most of the public sector - where this is not the case and it is very hard to dismiss people. Changing this would help.
Good point! And potentially scope to make greater use of a spectrum of activities like work trials and probation periods.
Equally, though, that highlights how inescapable some of these frictions are. As an employer in a small organisation, the sunk cost of a recent hire and the prospect of having being short handed while you do another recruitment process is pretty big deterrent to letting them go. And from the worker side, do I want to give up my safe comfortable 7/10 job for something that could be 9/10 or could end in tears in three months' time?
A more flexible labour market would be one of the most powerful tools. This is not just because the people with poor fits can be let go (and might move to other jobs where they are more suitable). But when employers know they can get rid of poor performers easily they are more likely to take risks on people who might be good; if they can't, they're more likely to fall back on qualifications, credentials, experience or word of mouth recommendations.
Of course our legislative framework overall is fairly flexible. But there are large sections of the economy - i.e. most of the public sector - where this is not the case and it is very hard to dismiss people. Changing this would help.
Good point! And potentially scope to make greater use of a spectrum of activities like work trials and probation periods.
Equally, though, that highlights how inescapable some of these frictions are. As an employer in a small organisation, the sunk cost of a recent hire and the prospect of having being short handed while you do another recruitment process is pretty big deterrent to letting them go. And from the worker side, do I want to give up my safe comfortable 7/10 job for something that could be 9/10 or could end in tears in three months' time?
Talent is not a generic property that one has such as weight or height.
Different people are good at different very specific tasks.
Plus there is a significant level of on the job learning.
Gary Becker caught this with his concept of firm specific human capital.
Talent allocation is matchmaking to jobs where you have not seen the candidate in action
And can not see how the candidate will do in two years.
So there is a lot of vain hope here.