Soccer Academies and Professional Development

Why don’t companies develop talent like professional soccer teams do?

In European soccer, clubs have youth teams and academies that bring on and develop young players. The top young players are recruited and brought to an academy in their early teens.

For more on how this system works check out: https://www.nytimes.com/2010/06/06/magazine/06Soccer-t.html

But outside of athletics, talent is not as sought after or developed by organizations that can profit from that talent. This is understandable in some sense because inherent athletic talent plays a less important role in business, but you could imagine it being valuable for large companies to take over the development of talent from organizations that prove ineffective.

A difference in Incentives

Business recruit talent in a way that is much more similar to North American sports teams.

In the NHL, where a draft and minimum age disallows the youth academy system, there are various developmental leagues. The Canadian Hockey League, an under-21 league in Canada produces ~50% of the NHL players drafted every year. NCAA colleges and pro-teams in Europe account for the rest. If the Canadian Hockey League didn’t actually help players get better, or get drafted and succeed in the NHL, all the best players would stop playing there. They would go to Europe or NCAA teams.

This is a similar system to football and basketball, where teams sign players that they expect to contribute on the pro level in less than a couple years.

These different systems lead to different incentives when it comes to player development.

In the CHL, clubs want to win in the short term. They support the development of players only so much as it helps them win.

In the academy system, the goal is the long-term development of players. The team benefits most when the player reaches his full peak as a pro and helps the big club win. By linking their fates together, they create the possibility of a more mutually beneficial relationship.

Why don’t companies recruit 15-year-olds?

Soccer clubs want to bring in young players for two reasons:

• They retain their playing rights (and build loyalty), which means those talented players will create value for them when they go pro.
• They get to guide the development of those players to make sure they reach their potential and learn to play in a style that is in-line with the main club.

Companies support “learn to code initiatives” and donate to local business schools as a way to improve recruiting. Large companies typically have management training programs that focus on developing new and younger hires. But these efforts almost exclusively start with post university graduates.

This doesn’t happen in business for a couple reasons:

• You can’t sign 16-year-olds to 10-year exclusive employment contracts.
• In sports, it is easier to see and assess athletic talent. When you see a 13-year-old Sydney Crosby skating circles around 16 year-olds, you have a pretty high degree of certainty that he will be able to play in the NHL. But there isn’t the equivalent for business skills (coding would be the most likely).
• They don’t know how to develop them. There is a belief that the school and college system are actually valuable to people, despite evidence to the contrary.

Due to the uncertainty, a company would need to have a reasonable expectation of your ability to create value in the future. If you can leave and go to another company as soon as you get offered more money, they are not going to invest the time and money in extensive development.

Due to employment laws, which make it almost impossible for companies to secure exclusivity from employees (non-compete is the only real option), investment in training is a gamble. You are faced with a situation where the best people you develop are likely to leave and go to companies that pay more (because they have extra capital that they are not investing in development) and you are left with the ones that don’t create enough value to be worth the investment. Freedom to sign long-term contracts would allow for companies to mitigate this, but they are young people don’t have the right to enter voluntary contracts.

At a young age, it is very uncertain about who will develop into a valuable contributor in the future. Signing and developing talent is only profitable in soccer because clubs can hold onto many players into their productive years. If clubs we not allowed to retain the playing rights of players, there would be a much lower incentive to develop the player. Loyalty only runs so deep.

Most people would view the employment law that prevents young people from signing long-term contracts as a good thing, but in many ways, it eliminates the potential for valuable and focused educational experiences that could otherwise exist.

Attempts by companies to develop profit-maximizing education programs for young people would probably not work out well they would likely tend to be to rigid about pushing them into the same boxes as schools do today, but the mutual incentive would almost certainly work out better than government schools today.

Most people would look forward to corporate youth training as dystopian, but I for one look forward to our corporate overlords starting their own youth academies.