Part of the reason I decided to join the world of staffing and recruiting was because I realized how important it is to invest in people.
In a period of four years, I was promoted from a worker bee who managed no one to a regional director overseeing 55 employees. As I was promoted, I began to learn quickly the importance of delegating. I also learned that my three most important jobs were:
-Hiring the right people.
-Developing the employees you have.
-Taking very good care of your current employees.
It occurred to me that my bosses and the corporate office liked to talk about numbers, spreadsheets, and meeting revenue goals.
I also noticed that the parts of the company that were performing the best had the lowest staff turnover and the best employees.
I often wondered: What if we decided to talk less about revenue goals and instead talked more about recruiting and retention? In other words, what if we talked more about people and less about numbers?
A Harvard Business Review article broaches this subject. It notes that borrowing capital is at an all-time low rate, so your CFO had better be good at finding good deals for loans. Actually, the after-tax cost of borrowing for many companies is at or near inflation, making the real cost of borrowing close to nothing. The CFO’s job is relatively easy. He or she just needs to follow spreadsheets and markets.
Managing people is much harder! That’s why a good HR manager should be more valuable than a good CFO and should ultimately earn more.
You could invest thousands of dollars and many hours investing in someone, only to see them leave for another company. Some employees could cause tremendous damage to the company. They may embezzle money, run off good employees, or require more training than they’re worth. And people are much more unpredictable than numbers on a spreadsheet!
The Harvard Business Review article mentioned above notes that companies consider only about 15% of its employees to be difference makers, and less than one in eight are inspired. My advice to companies: find out who your true difference makers and, and take really good care of them.
The tendency is to spend more time with poor performers that we overlook our best employees. But what if employees were treated like stocks or investments? Would we invest the most time in our poorest performing stocks? No, we would probably sell those stocks before they caused more damage. Likewise, we would probably spend more money investing in our highest performing stocks. We need to be sure to invest in our top employees. This “investment” could come in encouragement, support, or … yes, more money. Believe me, a small pay raise or a bonus for a good employee is much cheaper than the cost of turnover.
I once saw this quote: “If you’re having a bad day, just remember in 1976 Ronald Wayne sold his 10% stake in Apple for $2,300. It is now worth $59,565,410,30.”
Some good employees are like that Apple stock. You would lose out a lot on them if you don’t invest in them.
The problem is, you often don’t know who those good employees will be. So the best you can do is be fair and try to invest in every employee. You’ll be able to tell soon enough if your investment is paying off.