Resurfacing an old related post.
The calculation of the unique correct pair (how_much_should_I_bid_to_hire_this_guy, how_long_should_I_keep_him_after_hiring) can be found numerically for any desired amortized (i.e. average over time) weekly cost.
Essentially, if you decide how much you want to spend weekly on average and the level of the staff member, which is a natural starting point when looking to hire staff ("I want to be paying $10k/week on average"), there is a unique value of the bidding fee that you should pay and an associated optimal retention period after buying (independent of speciality, of staff type).
There are two pieces if anyone wants to implement this:
(1) Use the amortized cost formula mentioned above, i.e.
$$A(S,T,L) = \frac{h}{T} + \frac{S}{T} \cdot \frac{(1+g(L))^{T+1}-1}{g(L)}$$
where:
- $S$ = Starting salary
- $T$ = Duration (weeks)
- $L$ = staff level (1-7)
- $g(L)$ = Weekly Fractional Growth: 0.01 + (L-1) \times 0.0025
- $h$ = Hiring cost
We are trying to find optimal values for (T, h).
Note that the optimal retention time T_opt can be inferred for a given (S, L, h) by simply checking numerically what is the integer value of T between [1, 100] that minimizes A(S, T, L, h). Let's denote the associated optimal amortized cost A_opt(S, L, h). The remaining task is to invert this relation and solve for h.
(2) Choose the level L of staff that you want to buy. Choose an array of reasonable starting salaries S for that level e.g. for level 4 it might be [$7000, $7100, ..., $10900, $11000]. Now use bisection search to find the hiring fee that leads to the desired A_opt.
Some preliminary results below (sorry, I don't know how to format tables here - you can load it in a CSV ->Spreadsheet). First column has the starting salary.
How to read these tables: If you want to be spend on average no more than $11000/week on a level 4 staff, and you see an available level 4 in the market with starting salary $8000, do not bid more than $20000 (rounding from the table value of $19506). If you pay $20000, then you should keep him for 18 weeks. (If you end up paying less, you should keep him a little less.)
Level 4 Bidding price:
Salary,$9000/week,$10000/week,$11000/week,$12000/week,$13000/week,$14000/week
7000,7097,24170,47035,75145,108071,145387
7500,,12981,31853,55968,84900,118253
8000,,4354,19506,39901,65084,94778
8500,,,9628,26548,48255,74413
9000,,,1976,15573,33987,56852
9500,,,,6762,22036,41792
10000,,,,,12189,28987
10500,,,,,4201,18195
11000,,,,,,9201
Level 4 Retention Duration (Weeks):
Salary,$9000/week,$10000/week,$11000/week,$12000/week,$13000/week,$14000/week
7000,14,20,26,31,35,39
7500,,16,22,27,31,35
8000,,12,18,23,27,32
8500,,,14,19,24,28
9000,,,11,16,21,25
9500,,,,13,18,22
10000,,,,,15,19
10500,,,,,12,16
11000,,,,,,13
Last edited by Maatsaas at 7/31/2025 2:22:23 AM