At the end of the work day, Chief Nyquist finally left their company. Ves hadn't seen anything of note, but the observations he made earlier gave him plenty of ammunition as long as he submitted his report fast enough.
As Ves was ready to return to base, he turned to Jeff for one more question. "Say, if Mr. Stoddard advances to Journeyman one day, will he still decide to work under Kadar and Neyvis? What stops him from parting ways with his employers and start his own business?"
"Oh, the KNG already signed an MTA-enforced contract with Mr. Stoddard that offers several options in the event of his advancement." The relations manager answered. "It is a very standard contract in the mech industry. I'm surprised you haven't heard of it yet. Many major mech manufacturers attract design talents with these contracts."
"What do these contracts entail?"
"Upon event of the advancement of a mech designer to Journeyman, they receive at least two options. The first option would be to continue to work for the company. Newly-advanced Journeyman not only receive better treatment to fit their new status, they are also offered a certain amount of shares, usually ten percent or more depending on their commitment."
"Ah, I have heard of those kinds of arrangements, just not as concrete." Ves replied. A favorable advancement contract like this used to be so far away from him that he never looked into it. "Ten percent sounds kind of small though."
"That is just the standard minimum convention in the industry. Both the mech designer and the company can negotiate a different proportion of shares if they like. Also, it is very fair considering that a newly-advanced Journeyman has taken none of the risks and contributed very little in the startup, growth and maturation of the mech company.
Every new Journeyman starts with around ten percent shares, and slowly builds up as they contribute more in the company."
"They are being paid in shares?"
"Yes." Jeff nodded. "A newly advanced Journeymen is not that much better than an Apprentice, but after a decade or so of seasoning they would usually be able to match the prowess of an older generation Journeyman. It is fair to remunerate them with a greater stake in the company they increasingly help build up. This is also a good way to keep a promising Journeyman committed to the company.
In some cases, the older Journeyman relinquishes more shares to the younger Journeyman in order to provide the company with continuity."
That sounded like a very far-sighted arrangement to Ves. "The younger Journeyman essentially inherits the company from his former boss when the latter dies or retires."
The pivotal role of Journeyman Mech Designers meant that they wouldn't be resigned to work for just salary when working at a company being led by an older Journeyman.
At the very least, working for a Senior Mech Designer allowed them to enjoy the tutelage of a superior in the profession, but working for another Journeyman yielded very little benefits to someone of the same rank.
Therefore, offering these talented and independently capable mech designers a stake in the company was essential to retain these talents!
A mech company headed by one or two Journeyman like the KNG owed all of their success to them. This worked fine when Kadar and Neyvis still had at least half a century or more time to lead their company.
Yet what happened after they became too old to work? The KNG would stagnate and decline until it eventually collapsed after it failed to design new mechs that equalled their older products.
Therefore, continuity became a very serious issue to mech companies highly dependent on a small number of mech designers for success.
As Jeff explained, it was no use for the founders and owners of a thriving mech company to hold fifty percent of its shares when the value of that company eventually dropped down to zero!
Therefore, instances where the first-generation mech designers slowly sold or rewarded their shares to a promising second-generation mech designer happened frequently. The older mech designers only kept enough shares in the company for their own heirs to live on, but not much more than that!
Of course, it would be best if the second-generation mech designer was part of the same family as the first-generation mech designer! Yet the odds weren't optimistic, as very few mech designers ever advanced to Journeyman to begin with. Therefore, it did not surprise Ves that Kadar and Neyvis treated Stoddard favorable to the point of eyeing him as a possible heir to lead the KNG in the future.
Still, most mech companies failed to provide for continuity. Ves heard of many successful mech companies shuttering their doors because their lead designers died but failed to attract a successor.
"What is the other option that Stoddard can pick if he rejects the offer of a stake in the company?"
"Oh, he is still free to found his own company or work for someone else. It is just that in the event of setting up a company, he's obliged to offer at least ten percent of its shares or more to the KNG. Our company did spend a lot of time and effort on nurturing him to become a Journeyman. It is only fair for him to pay something back.
If he works for something else, he'll have to hand over twenty percent to fifty percent of his earnings, depending on a complex formula. It's mainly heftier in order to compensate for the fact that he might work for a potential competitor."
All in all, these kinds of contracts all aimed to have the younger mech designer pay something back to the older one. To be honest, Ves didn't find them very favorable to the younger mech designers, but if they didn't sign them the company would focus their efforts on nurturing a more pliable young talent instead!
These considerations only applied to mech companies led by Journeyman or higher. Companies led by Apprentices and lower like the LMC didn't merit such considerations. So many companies at this level already existed that they constantly rose and fell by the hundreds each year.
Finding a replacement mech designer to take over for the older one was also a lot more trivial because so many Apprentices would jump at the opportunity to take over the helm of an established mech company!
"Is Stoddard the most promising mech designer at the KNG?"
"Oh, who can predict if an Apprentice can grow to a Journeyman?" Jeff replied sheepishly. "You know better than me how difficult it is to take that leap. The KNG employs many Apprentices, and we've put three more colleagues of Mr. Stoddard in charge of the other manufacturing complexes."
A rotation also existed to give other promising Apprentices of the KNG a chance to get close to a major manufacturing site. Stoddard wouldn't preside over the Mosville Complex for longer than a couple of years. At that time, some other fresh-faced Apprentice would take over, and the entire learning progress began anew.
While such an arrangement helped a larger number of mech designers enrich their understanding and feel for mechs, the gaps were equally as evident.
The effective degree of supervision they could provide was practically minimal if hotshot mech designers constantly shuttled in and out after spending only a year or two to hold a position they needed at least that much time to become competent enough to properly discharge their responsibilities!
As a business owner who might one day be in the same position as Kadar and Neyvis, he understood their position. In a free labor market where mech designers could work for anyone they wanted or work for themselves by starting their own businesses, it was really difficult to attract capable and talented mech designers.
Therefore, Kadar and Neyvis essentially had to bend over backwards to an extent to retain promising talents. Mech designers with value mostly knew how desirable they were. Employers who wanted to hold on to them not only needed to treat them with respect, but also take a step further and treat them like princes!
They had no other choice. It would be far too difficult and costly to hire an existing Journeyman Mech Designer who in most cases were already their competitors.
So the most practical solution is the approach adopted by many companies and institutions. Ves knew that many of them scouted and brought in talents early. While their employers nurtured and invested into the development of these talents, they simultaneously indoctrinated them in order to capture their loyalty and affection.
Companies and institutions went through all of this trouble because it was one of the most cost-effective if time-consuming means of providing for continuity!
Having observed and heard from Jeff how the KNG managed continuity, Ves again reflected on how the LMC should approach the same issue.
Eventually, it came down to his own capabilities. Ves bet that Senior Mech Designers didn't have to worry that much about this issue, at least when it came to hiring Journeymen to join their design teams.
The difference between a Senior and Journeyman was that the latter didn't have much to offer to other Journeymen. Therefore, to compensate for the lack of benefits in terms of tutoring and guidance from a superior in the profession, they wanted to be paid with shares in the company instead!
Ves disliked the latter option for multiple reasons. Who wanted to dilute their own control over the company they founded and raised by their own efforts?
Also, the more Journeymen he hired, the more he had to dilute his own share in his company!
This simple truth probably prevented most companies from accumulating too many Journeymen!
Only a large government institution such as the Mech Corps dared to employ hundreds of Journeyman Mech Designers without offering shares. Even then, the military only got away with it because they partnered up with a large amount of Senior Mech Designers, each of which offered valuable learning opportunities to many Journeymen!
A low-ranking Novice Mech Designer like Ketis didn't deserve this kind of consideration. There were so many of them that some on the government even thought their numbers needed culling every now and then!
Yet any mech company that tried to make it big couldn't grow without a sufficient amount of talented and high-ranking mech designers to support their expansion. And these mech designers were all self-serving in a way and would never work for peanuts as pay. The more promise they held, the more benefits they demanded.
Ves also saw the solution to the LMC's dilemma. As long as Ves improved far enough to be considered as an authority in the field, some Journeymen would love to work under him as long as they received his tutelage.
"Perhaps this is also another reason why so many high-ranking mech designers become professors at various universities."
Any mech designer capable enough to instruct students in their profession gained a reputation for good instruction. The more prestigious the school they taught at, the greater the attraction!
In this way, all of those mech designers who worked as professors as a side job would be able to attract talented mech designers into working for them with much less compensation than in a purely commercial setting!
What a slick arrangement!
There were quite a lot of advantages to giving back to the profession by becoming a teacher. However, it wasn't so easy to become a professor at a decent university. Ves could forget about becoming a teacher for prestigious institutions such as the Ansel University of Mech Design or the Leemar Institute of Technology.
Yet it was exactly those kinds of teachers that attracted hundreds of ambitious Journeymen to come work for them for free!
Ves shook his head. He was too far away from reaching those heights. Right now, the LMC already did brisk business with Apprentice-level mech designs so Ves saw no need to attract expensive talents to come work for his company for the time being.
"Thank you for enlightening me on the KNG's policies regarding continuity. You've taught me a lot of useful insights."
"No problem, Ves." Jeff smiled at him. "Mrs. Kadar and Mr. Neyvis has personally instructed me to accommodate you to an extent. We hope to build an enduring relationship with you. A future partnership or cooperation isn't out of the question once you end your military service."
Any ordinary Apprentice Mech Designer would whoop and jump at such an attractive offer! Yet to Ves, he saw no merit to cooperate with a company that would soon be tarnished by the report he planned to submit!