Friday, July 16, 2004

The Company Hiring Paradox

I have been reading a number of business books lately. and it brought to the fore of my mind that there seems to be a paradox in the way companies hire.

There are two basic schools of thought when it comes to hiring: hire the best and hire the cheapest. Now there are good points for going with one or the other.

Hiring the Best
If you hire the best they will likely outperform the average by 10 or 100 times, they will also cost a similar amount. The best have a major advantage they do not need much in the way of management. They are able to do things very naturally that many people cannot do without a lot of training and work up. They do need support so that they can spend the vast majority of their time on high value activities, like designing or selling or doing brain surgery. So giving them assistants, interns, secretaries and office managers to do the lower-value things like go through the mail, run errands, put paper in the copier, fix the computer and take out the trash.

Hiring the Cheapest
If you are hiring the cheapest you have the advantage of low cost of labor. This can be a good thing, but a major disadvantage is that they will need lots of management and supervision. They will also be limited in the tasks that they will be able to do, if you have a set of straightforward tasks that is part of your business then they will be a great to have to do those things. This usually described as unskilled labor.

The Crazy Company
There are plenty of companies that want the best but only want to pay for the cheapest. They can get around this a little by finding someone who is ignorant of their potential. Lots of companies hire students straight out of college and high school if they show talent and enthusiasm, they often work cheap only because they don't yet know how much they are worth. They will jump ship once they put the pieces together and you haven't gotten them up to parity with their peers.

The other way is to get the best and then have them do essentially menial labor by doing a lot of simple tasks that anyone can do. That is such a waste of money. It would be like paying Julia Child to work the grill in McDonalds.

Try to match up the task to the type of person needed for it.

No comments: