What impact would staffing have on your investment decision?

professional profile

February 28, 2022

by a professional from University of Illinois at Urbana-Champaign in Indianapolis, IN, USA

To ask the question more precisely - how would it impact your view of a candidate company if they were having trouble attracting talent? Granted, it has become a problem across a number of sectors, but is it a fact of life or does it suggest flaws in their hiring process or their view of human capital?

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Reply by a professional
from University of Akron in Charlotte, NC, USA
This is actually a vital criteria I use when determining industries to invest in.I look at what I call "Operational Viscosity" or how easily/smoothly a business operates.The higher the friction inherent in a business the less desirable it is as an investment.The foundational element for an organization/industry's operational viscosity normally centers around the workforce required to provide the labor for the revenue producing product/service.When that workforce is transient, low pay workers, it typically makes for a lot of friction within the organization and causes it to be a nightmare to own / operate.Even if you have "managers", they will feel it that stress / friction and it will cause turnover / issues within the management structure.Labor is the foundation.Best to have a great labor foundation than a labor foundation build on sand.
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Reply by a searcher
from Harvard University in Boston, MA, USA
My knee-jerk reaction is that it could be an opportunity for value creation.The first question I guess would be to identify the why behind the trouble? Is it the geography? a boring product? the managers? Assuming a sound company otherwise,it seems like a change in management would give the opportunity to correct those issues.
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