Is Hiring Always The Answer?

For countless years now, a bedrock principle in the business world has been: Growth means quantity.  You grow a business by adding staff... adding locations... adding more product lines... anything and everything that leads to an uptick in quantity.  This "wisdom" is so rarely questioned that it seems no-one ever considers whether it is really still applicable.
Even with the use of technology which allows distributed operations and enables companies to utilize a global network of call centers or manufacturing facilities, plus allows people to work at home, there seems to be an acceptance: that, in order to grow, you must ADD quantity of some sort.

Back when I was running my companies, which were in services, not products, I, too, thought that I had to grow by adding.  In the context of a service business, this usually meant adding people.  However, if I was going to do it all again, I don't think I would take this approach.  For one thing, for many services firm owners - consultants and the like - the skills being offered by the owner represent a unique set and cannot be replicated on the job market.  While it's possible to hire a few support staff - people to answer phones or to do the filing or deal with the correspondence etc. - the core consulting competency rests on such a unique blend of the owner's skills and experience that it is not replicable.

This was actually my situation - had I bothered to step back and look at it - and I would always counsel anyone in a similar position to think carefully before trying to grow in a conventional way by adding people with skill sets theoretically close to yours.  In hindsight, what I should have done is raise my rates and cut down on the volume of work coming into my firms.  Over time, this would have meant slower growth in dollars and volume of accounts, but it would have given me a nice life, free from a lot of headaches!

This is why small business owners need to consider what growth means in terms of quality:
Growing qualitatively means you have a good income, but free time... the opportunity to only do work that is really meaningful to you... the time to look at other ways to contribute to society, such as volunteer work... and a deepening of your own skill and knowledge base.

If you doubt me, consider one of the definitions of the word "grow" in the Merriam-Webster dictionary: "to have an increasing influence". Sometimes, a pre-eminent stature and the influence that goes with it, even if you are close to being a one-man (or woman) band, is worth far more than all the quantitative size you can muster.

If you find yourself at a crossroads where the only way to handle the volume of work and
keep the business afloat seems to be to add more people, take another look and see how a qualitative approach to growth might provide better solutions.

Copyright Deborah C. Sawyer

My latest book (available in print and e-book formats), Other People's Problems:
Why You Need To Go On Interviewing Your Employees- After You Hire Them is available via the following link  http://www.lulu.com/content/paperback-book/other_peoples_problems/9268001

Paid sick leave may make you ill!

Sick leave and the perils of offering paid sick leave at a smaller firm is one of the topics I covered in my book  Other People's Problems.

I recently also answered a question on LinkedIn on this subject and one of my ideas was quoted in an article in Canadian Business.  www.canadianbusiness.com/article/26210-the-sick-day-dilemma

Most smaller firms are usually very tightly budgeted, and there isn't a lot of room for frills.  While many would argue that providing someone who is ill with the peace of mind, that they will not go without income, is not a frill, given that there is always a percentage of the population who takes advantage of every benefit possible, I always recommend that smaller firms do not offer paid sick leave, unless they are mandated to do this by law.

If you do offer paid sick leave - and let us suppose you have five employees - under the right circumstances, you could find three of those five employees deciding to take a day or two off, leaving you and the other two employees scrambling to cover deadlines to meet client demand.  Even worse, if all your employees have called in sick at your expense, as the owner you might find yourself working all the hours God gave to satisfy customers and keep the business as a going-concern.  (Funny, but a lot of employees don't like to be reminded that the company's revenues are tied to their performance of their job duties). Under these circumstances, not only do you end up out-of-pocket for the money you had to pay the workers who are off sick, your own health will probably take a hit from working those punishing hours.  And, when you're sick, who pays for your sick leave?

Before you agree to pay any benefit, you always need to look at whether you, as the owner, will be equally able to enjoy the benefit.  If, instead, you are the one sitting there paying all the bills and not enjoying the benefit, you may need to revisit the subject and think of a different approach.

For example, rather than have paid sick days off, instead offer a wellness bonus for anyone who works all the days they are supposed to work in a month.  Even if it's only amounts of $50 or $100 a month - paid in cash - it's enough to keep people who are conscientious on the job and then, if they need time off when they're unwell, you can always argue they should have banked the wellness bonuses as a reserve against being sick.  With sick leave, it's always a good idea to try and find ways to make sure the conscientious workers are protected and the slackers don't get something for nothing.  This is why a wellness bonus works..

Such approaches will also help you sort the wheat from the chaff when it comes to workers you want to keep, and the employees you're better off without.  Over time, the conscientious hard workers will stick around because they know there's a reward for their efforts (the wellness bonus) while the slackers will migrate to "greener" pastures (companies that will actually reward them, via paid sick leave, for not working).

Other options with sick leave are to have defined limits as to how long a person may be off without penalties such as losing their job, for different types of ailment.  Rather than leaving this vague, it's a good idea to spell out the length of time, such as two weeks for a tonsillectomy, eight weeks for a hysterectomy and similar parameters for different but common ailments that occur. (You will be amazed at how many people think their in-grown toenails are worthy of lavish amounts of paid time off to "recuperate" from a procedure!)

Or, suggest in your policy and procedures manual that time off for illness and recovery is at management discretion.  This way, you can structure according to the individual's need but also make sure that the genuine cases get your support, while the not-so-genuine do not.

Copyright Deborah C. Sawyer



To order my book, in either e-book or hard copy format, go to this link

http://www.lulu.com/content/paperback-book/other_peoples_problems/9268001

Part 3: Training - For Who's Benefit?

The title of this blog post might just as easily have been.  "Why won't people invest in themselves?"

One of the interesting phenomena I observed in my many years as an employer was the number of people who professed that they wanted to get ahead, but weren't prepared to invest a single nickel into doing anything about it!  In their world, all the investment was to be borne by someone else, such as their employer.

This brings us back to that whole issue of: For whose benefit is training undertaken and who should pay for it?  In Parts 1 and 2 of my blog posts on the subject of training, I had suggested that smaller employers are well justified in placing some restrictions on how they pay for training.  If your small company only has $500 or $1000 per year to invest in training, if you do send somebody on a course and, three weeks later, the person quits, there goes your training budget for the whole year!  Most small companies cannot afford to operate this way.

That's why, in those first two posts on training, I had suggested that reimbursing people once they've taken the training and remained with the company for a certain amount of time was a perfectly valid policy.

Another approach, of course, is to list educational programs and training courses that the company considers important for people who want to be promoted.  After all, if someone wants to get promoted, meaning they would get increased compensation, it's not unreasonable to expect them to invest in the training program themselves, assuming the financial investment is relatively modest.  The important thing then, for the company - once the person has taken the training - is to follow through with the appropriate promotions or increases in responsibility that will bring the employee a higher compensation level.

Whatever approach your company takes, the fact remains: the person taking the course is the person who gets the greatest benefit from it.  The knowledge is theirs to do with, as they please, and they can easily take it to another place of employment.  Small companies particularly need to have policies in place to protect themselves from continually being ripped off.

For more details about the fallout from training in a small company and other topics, read my book, which is currently available via this link http://www.lulu.com/content/paperback-book/other_peoples_problems/9268001

Copyright Deborah C. Sawyer
To contact the author go to www.deborahcsawyer.com/dcs_005.htm

Part 2: Training - For Who's Benefit?

My last blog post, about policies around training costs and possible reimbursement by the company, prompted one entrepreneur to say to me: "Two years... that's a lot!"

As I pointed out to her, all such policies should include a phrase about management being able to waive the policy, if they want.  As a manager, you should always be aware of the difference between an employee who's been on a training course and then has to leave the company, shortly thereafter, due to some factor like a spousal job transfer, and an employee who takes the course and then, three months later, waltzes out the door to a better paying job, bolstered by the training you just paid for.

Another approach is to have a list of courses that the company recommends employees take, if they want to advance, and then have deferred reimbursement to the employee.  That is, if the employee goes ahead, takes the course and pays for it themselves, after a certain amount of time, when you can see the training has had some effect, you can then reimburse the employee.  The list of courses can include a schedule of when the company would reimburse.  Remember, again, small companies rarely have lavish amounts of funds floating around anyway and wanting to see the benefit before shelling out the bucks is perfectly reasonable.

This way, if an employee takes a course, and is quickly able to leverage the skills to get a better paying job, you will not be out of pocket if they leave before they are entitled to reimbursement.

One of the other issues to consider, with all this talk about reimbursing training, is whether or not you will have the money when the employee seeks reimbursement.  Given all the ups and downs of the economy, the best of intentions can often go awry.  Cash flow issues dog most small companies all their lives, and before you set up any policies around training and who pays for it, you may want to consider what you can afford based on your historical worst months or quarters.  That's why another good idea is to put a cap on how much the company will contribute for courses employees take.  Setting up a scale might save you a lot of anguish down the road.

Copyright Deborah C. Sawyer

Deborah C. Sawyer is the author of Other People's Problems:  Why you need to go on interviewing your employees - after you hire them!

http://www.lulu.com/content/paperback-book/other_peoples_problems/9268001

You can also purchase a digital file (e-book) via the same link.

Training - For Who's Benefit?

Criticisms are often leveled at businesses around the issue of training, that not enough companies invest in their staff via education and training programs.  But what happens if your investment in training walks out the door?

For a small business, it can mean the entire year's training budget has been wasted.  This was what happened to one small firm when Bonnie quit, three weeks after completing a training program.  The objective of sending Bonnie on the course had been to provide her with skills she needed to do her current job.  In discussions with her manager, it had been agreed that certain aspects of the job were not familiar enough to her and in order for her to perform well, a course would be a good idea.

At the time, the firm was making less than $250,000 a year and, after paying salaries for five staff people, overheads for offices, equipment and the like, insurance and benefits, and whatnot, there wasn't a substantial amount of money left over for things like training.  This is why in many companies - as 95% of businesses in America have five or fewer employees, most companies are considered small - there is no training budget.

Bonnie's employer considered that, if she quit three weeks after taking the course, she was probably more or less decided before she agreed to go on training that she wasn't going to be sticking around.  The company therefore decided to implement a policy around course-taking.  In the future, the business owner decided they would not get burned by employee behaviors such as Bonnie's.  The policy, which management could choose to waive if they wanted, allowed that if a staff member quit within three months of taking a course valued at $200 or less, the departing employee would have to reimburse the company for the training.  The greater the cost of the course, the longer the reimbursement period.  So if an employee accepted going on an out-of-town course costing $2,000 more, the company could ask for reimbursement up to 2 years later for a voluntary departure.

(Issues like this and more are covered in my book, Other People's Problems: Why You Need To Go On Interviewing Your Employees - After You Hire Them! http://www.lulu.com/content/paperback-book/other_peoples_problems/9268001


Copyright Deborah C. Sawyer

When Your Hiring Practices Help The Other Guy!

It's one thing to seek out people to hire with the expertises you need, in order to gain competitive advantage for your business, it's entirely another matter if the competitive advantage goes, not to your firm, but to your competitors! 

In my book, Other People's Problems, I talk about all the extracurricular baggage a person can bring into the workplace. One of the worst things you can do is to hire somebody and not find out as much as possible about them, not just as a worker, but as a person, so you can detect trouble on the horizon.

When you hire someone, their personal life - their divorce, their juvenile delinquent kid, their gambling habit, their criminal activities, etc.-can introduce a real drag on your firm's fitness to compete. This is why it's often a good idea to hire people on a contract or for a project. Not only can you see how they handle their job duties, you can also get to know them a bit as a person. This way, you will be in the position to offer permanent employment only to those people who will not be bringing personal problems into the workplace.

In a small firm, there is no way you can stay competitive if your personnel are on the phone a third of the time, wrangling with their bank manager or with the lawyer for their ex-spouse.You just don't have the resources, either human or financial, to counteract the damage. Because sadly, if the people you hire are distracted by their domestic and other personal troubles, the only companies who will benefit are those you compete with.

Copyright Deborah C. Sawyer

To some, work is a four-letter word!

Success in the workplace is often as much about expectations as effort. In my book, Other People's Problems, there is a chapter entitled "There's Work And Then There's... Work!" (www.lulu.com/content/paperback-book/other_peoples_problems/9268001)
In this chapter, I look at one of the biggest obstacles you will face in hiring for your small business, namely, that what people have done in the past, for the dollars they earn, may be completely at odds with what you expect for the same or similar dollars.  Conversely, people who have been relatively well paid for not doing that much over the course of the day, will be seriously shocked when you require them to work a full eight hour day.

Of course, this is not a problem confined to smaller companies. Several years ago, a client,  who was Senior Vice President at a major insurance company, told me how, after he came on board, his secretary - whom he had inherited from his predecessor - came and complained: Since you joined the company, I'm having to work from 8:30 a.m. to 4:30 p.m. every day!  He had simply looked at her and replied: "But those are your hours..."

It's very rare in any small company that there will be so little to do that people can move at a snail's pace or sit around and chat. While it's not a given in large organizations and bureaucracies, such as government, that people have nothing to do, if you've ever been in these environments and observed quietly what goes on, you will often see a slower rate of effort being put forth by the employees.

This is why, when hiring for smaller firms, it's a good idea - as much as is possible or allowed under the law - to hire people on some sort of contract or for a shorter-term period, so you can try them out and see how they work. Many times, people will be seeking out employment in a smaller environment precisely because they like to be busy and want the time to go quickly - one of the benefits of having a busy workplace.

However, not everyone feels this way about work, which is why it's important to find ways to sort those who consider 'work' a synonym for joy from those who consider work to be a four-letter word!

Copyright Deborah C. Sawyer