With Employer-Paid Training, Workers have the Potential to Become More Productive

Question: With employer-paid training, workers have the potential to become more productive not only in their present employment but also in any number of jobs with different employers. To increase the productivity of their workforce, many firms are planning to maintain or even increase their investments in worker training. But some training experts object that if a trained worker is hired away by another firm, the employer that paid for the training has merely subsidised a competitor. They note that such hiring has been on the rise in recent years.

Which of the following would, if true, contribute most to defeating the training experts’ objection to the firms’ strategy?

1. Firms that promise opportunities for advancement to their employees get, on average, somewhat larger numbers of job applications from untrained workers than do firms that make no such promise.
2. In many industries, employees who take continuing-education courses are more competitive in the job market.
3. More and more educational and training institutions are offering reduced tuition fees to firms that subsidise worker training.
4. Research shows that workers whose training is wholly or partially subsidised by their employer tend to get at least as much training as do workers who pay for all their own training.
5. For most firms that invest in training their employees, the value added by that investment in employees who stay exceeds the value lost through other employees’ leaving to work for other companies

Answer: E

Explanation:

A GMAT Critical Reasoning section comprises some facts and arguments. GMAT critical reasoning tests the reasoning, logical and analytical thinking abilities of the candidate. The candidate has to deduce the correct option by finding the logically correct argument or by eliminating the irrelevant arguments.

The statement states - With employer-paid training, workers have the potential to become more productive not only in their present employment but also in any number of jobs with different employers. To increase the productivity of their workforce, many firms are planning to maintain or even increase their investments in worker training. But some training experts object that if a trained worker is hired away by another firm, the employer that paid for the training has merely subsidised a competitor. They note that such hiring has been on the rise in recent years.

Which of the following would, if true, contribute most to defeating the training experts’ objection to the firms’ strategy?

1. Wrong answer. Suppose they get a larger number of untrained workers. In that case, more money needs to be invested in training them (and very likely these people after receiving the training move on to competitor companies). This strengthens the training experts' objection.
2. This is not the correct answer. more competitive => more likely to switch to other companies. this also strengthens the argument.
3. But still, the investment that the firms made is lost if employees jump jobs. This is incorrect.
4. If they get the same amount of training, companies could ask the employees to fund their own training. No need to invest in worker training. Wrong
5. The correct answer, this means that even if some employees quit, the investment generates some positive value. This directly attacks the training experts' conclusion that investment in worker training is pointless.

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