Are You Buying Your Help At K-Mart?

Do you often bemoan the fact that, "We just can't get good people!"

You cannot expect superstars to work for below average wages.  However, because many CEOs have occasionally gotten a bargain on an excellent employee, they make their pay strategy the “Buy-The Help-At-K-Mart" strategy.

REAL-LIFE EXAMPLE
Sue prided herself on her bargain hunting ability.  This spilled over into her employment searches.  When Sue needed an administrative assistant, she thought to herself, “This is an easy job.  It really isn’t much more than a glorified clerk; I can train him/her up - no problem.”  She figured she could get a good person for $8/hour.  Sound familiar?

Sue did find a “qualified” person for $8/hour.  But training this new admin took a bit longer than Sue figured, but - hey, she was getting a $12/hour person for $8/hour!

Over time, the admin became an important resource for Sue.  Soon, the admin’s attendance became spotty.  Whenever she needed her the most was when she missed work.  Sue  began to feel like firing this admin, but how could she find someone else for only $8/hour?  So she tolerated the spotty attendance.  Eventually, the admin took a job for $12/hour at another firm.   Sue ended up having to pay the $12.00 an hour for the next person anyway...

In her The How To Double Your Profit System, we discussed that if you fill your business up with mediocre performers, good performers will not want to work for you.  Winners attract winners.  One of Sue's fellow members mentioned that  he'd "been there, done that" on this one.  He said, "You will spend a tremendous amount of energy training mediocre people and turning them into good performers only to have them leave for more money."

Here is the most important point the group imparted to Sue: Your time as the CEO is the most valuable time in the organization.  Don't waste it on poor people.  Your business can only move at the speed you move. Anchoring yourself down with poor people hinders your ability to make your business something special.

SOLUTION
Start the upgrade process today.  You may need to replace your poor performers with better ones.  Pay what you need to pay to get the talent you need.  Use your limited funds on better talent.  In the end you will be able to reduce headcount.  One terrific employee can do the work of two to three poor ones!

Comments

[John R. Ingrisano]

Henri, this is right on the money. I've made that mistake in my younger days, trying to pay $10 per hour for help, but then expecting $50 an hour worth of work. All I got were desperate people who bolted when a better offer came along.

I ended up spending tons of time and money looking for good help and wondering where the loyalty had gone.

The bottom line: Don't expect loyalty and a good day's work from employees if you treat them like dirt.

Pay them $5 an hour...and you'll get what you paid for.

-- JRIngrisano