When it comes time to hire. Be it for a permanent position or a one time job. Don’t let price be your determining factor. It can prove to be more costly in the long run.
Take hiring an employee for an example.
You need the skills of a guy that is outside of your budget. You decide to go with another person just because he fits within your budget, but he doesn’t really meet your needs. You feel that he is a quick learner and will become a valuable asset with a short ramp up.
You never considered what this short ramp up period is costing since productivity is not where it should be.
Since this person is learning on the job. There are just some things that only come with experience. These are learned by making mistakes along the way, recognizing similar situations and avoiding the mistakes the 2nd, 3rd, nth time around.
You never considered what these mistakes are going to cost.
After some time. The less expensive employee finally gets a few notches on his belt. He knows how to side step catastrophes (because he had a few on your dime already) and possess the skills you were seeking in the first place. He takes a step back, looks at his paycheck and realizes that something isn’t right. Now you have an employee that has out grown his pay grade. He will find another job, or stay there and be miserable.
Take a look at the above situation. There is more money being spent than first conceived. We must look at TCO.
Instead of hiring a cut rate person. Re-evaluate the budget. Factor in the lost time. Factor in the lost profit from this time lost. If it still doesn’t make sense, drop some needs. The fact is, if the money brought in by the properly experienced worker isn’t exceeding his paycheck, then your business model sucks. It’s a loser.
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{ 2 comments… read them below or add one }
So what’s the solution? Only hire experienced people (who will realize that the job is beneath them much quicker than the less experienced hire.)
Hiring inexperienced employees isn’t for everyone. It takes skill to train, it takes time to mentor, and it takes incentive to keep them from leaving when they see greener pastures elsewhere.
You can hire middle of the road “experienced” bodies looking to settle in, or you can seek out, nurture, and grow top candidates early in their career. But you’ve got to be a top employer to keep them, and you’ve got to take the risk that you might lose them if you don’t keep them satisfied.
Turning down this kind of long term potential is short sighted. Trying to save a few bucks over a few months (or even years) by being unwilling to take a chance on fresh blood leads to stagnation.
Even if you can’t keep the star employees long, if you get a reputation for hiring rookie Michael Jordans, people will start thinking you’ve got something going.
I agree on some counts. If you have the means to train… and the time, then I think that is a good asset. Not everyone possesses those qualities. I personally like to see a good mix of employees and encourage mentorship.
What I was really addressing, is the selection of a contractor/employee based on price alone. If you require a certain experience level or qualifications to be successful for the task at hand. Don’t hire the guy that isn’t going to get it done, but costs what you’re willing to pay. You’ll end up paying more in the long run.
In short, hire the right person for the situation.