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ABC Day Spa Will Cover the Cost for Its Employees

Question 123

Multiple Choice

ABC Day Spa will cover the cost for its employees to receive advanced esthetics training as long as they sign a contract that they will not work for another firm in the same industry for at least two years upon completion of their training. Why do firms use noncompete contracts when the cost of on-the-job-training is covered by the firm?


A) They want to be the only firm with highly trained employees.
B) It lowers the firm's costs.
C) It increases the likelihood that the employees who receive the training will remain with the firm long enough for the firm to see a return on its investment in their human capital.
D) It conveys to the employees that they must be highly productive to keep their jobs.

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