Can we afford their “bus fare”?
Jim Collins, in his iconic business book “Good to Great”, discusses getting the right people on the bus and in the correct seats.
That’s all well and good but, before we do this, can we afford to add new employees right now?
The answer to this question resides within another question. What is the business plan for this potential new team member, i.e., if we add this person, will the resulting increase in sales or decrease in costs, at a minimum, cover the added incremental expenses we’ve just added to the organization? This is a great first step to answering the hiring question.
Another question to answer is can we afford not to hire them? The best companies are always looking for great candidates, people who embody the organization’s culture, have a positive attitude, who have the specific skillsets and talents needed for the position and company, regardless of budgets. Growing organizations always need good people who can grow with the organization. Companies with the strongest balance sheets are best positioned to take advantage of these hiring opportunities.
And finally, adding key talent may be a long play to a strategy whose outcome will not be realized for a couple years. With all these considerations, any new hire ultimately needs to not only pay for themselves, but needs to, at a minimum, contribute typical profits to the bottom line.
The highest-performing companies will improve their profitability as they add personnel.
Here are some questions to ponder:
- Is this hire a defensive move, keeping them from my competitor?
- If we have a budget, are the assumptions still valid for hiring this candidate?
- What return will we receive by hiring this person? How soon will we break even with this investment? How long before we’ll be realizing our typical return for an investment in overhead of this amount?
- Is there someone on the bus who should be asked to leave as part of this hiring process? If yes, team performance can be improved without adding significant expense or additional headcount.
- Will this hire pay for themselves and ultimately enhance the organization’s financial performance?
- Is this potential addition a defensive move needed to shore up our performance to keep the business we have?
