The Hiring Trap: Why Headcount Isn't Always the Solution

Hello everyone, and welcome back to this month's edition of Building Value. There are a lot of mistakes that a business owner can make, some more harmful than others, but one of the most damaging mistakes that any business owner can make is trying to solve a problem with headcount, or hiring. Overhead or payroll is often the biggest expense for most businesses, and therefore it's the thing that we're most likely to have derail our overall profitability, especially in the face of more difficult economic times for your business. And don't get me wrong, there are times that your absolute best next move is to hire someone. But if you think that this will lead to you instantly becoming more efficient, it won't. If you think it will instantly generate more revenue or profits, it won't. And if you think that you will instantly be getting more time back in your day, you won't. This is often because the problems that lie at the root of your issues have nothing to do with headcount, or the lack thereof.

So instead of the decision being 'let's go out and make a hire,' I would recommend you spend a few minutes to review your processes, your people, and your profitability. As it relates to your processes, review how you are approaching your day-to-day. Are there areas that you could streamline? Or is someone spending time on a task or tasks that should be delegated, automated, or even eliminated? And as it relates to your people, ask yourself: do we have the right people in the right seats? Or do we need to reconfigure who is doing what, or who's on the team in general? Sometimes you end up with people on the team that are just not a great fit, or perhaps they were at one time, but the business has grown beyond them and their current skill set, or perhaps they're not a great fit culturally and are constantly causing distractions, or worse, dragging others down with them.

And lastly, review your profitability. Are you spending time on the truly meaningful aspects of your business, the areas that drive profitability, or are you and your team focusing on staying busy while avoiding difficult tasks, difficult problems, and difficult decisions that are more likely to increase the bottom line? Once you have a chance to review those potential trouble areas and correct as needed, then, and only then, revisit the problem to see if the next best step is to truly hire. Thanks for joining me everyone. Until next month, keep building value.