The other day, while waiting for the programme I wanted to watch, I was watching a programme about a guy and his restaurant that he was about to open, and he was at the stage of hiring staff.
He had a major argument with his partner about how to hire staff.
“Let’s see what expertise candidates have and what value they can bring to the table, we adjust the compensation package accordingly.”
“I don’t care about expertise and this value bullshit. This is what I’m willing to pay. Take it or leave it.”
Many IT companies are paddling in the same boat.
In their career ads they call themselves industry leaders and are looking for high-calibre professionals with significant expertise and experience, but when it comes to compensation, they can’t even pay industrial averages.
The typical example of Dom Perignon taste and cheap warm beer budget.
And at this point recruiters fall into two categories:
One group are the forward thinkers. They plan for unknown outcomes with rigidly defined resources. Hence, it doesn’t matter what the person can help the company to achieve, the person’s compensation is carved in stone. They shrink their dreams according to their budget.
The other group is the backwards thinkers. They plan for specific outcomes and adjust their resources and tactics as necessary. They expand their budgets to accommodate their their dreams.
The forward thinkers hire competitive(ly cheap) marketing people for $15 per hour, and tell them that their job is to take the company from $20 million annual revenue to $40 million within one year. Of course, at the end of the year, the business owner gets rather disappointed.
The backwards thinkers hire real marketing professionals for real professional compensation and tell them about the company’s the company wants to achieve with the help and support of this person.
No, nothing is guaranteed in this world except death and taxes, but in my experience the backwards thinkers have a better chance to build high-performance organisations than forward thinkers. They simply have higher calibre people to do the work.
In his book, The Politically Incorrect Guide To Capitalism, Dr. Robert P. Murphy uses the example of slavery about compensation…
“According to liberal economist, Ludwig Von Miesses, the price paid for the purchase of a slave is determined by the net yield expected from his employment. Just like the price of a cow is determined by the net yield expected from her utilisation.
If you treat your people like cattle, you can’t expect anything but cattle-like performance. But guarding and feeding a slave is more expensive than guarding and feeding cattle. If you expect human performance, you have to provide human inducements.”
In the case of a business, the upfront investment in the person gives the business owner the right to expect anything of that person at all. Without upfront investment, the owner has the right only to hope but not to expect.
So, what sort of thinker are you?
A forward thinker shrinking your vision and objectives to your current budget?
Or a backward thinker expanding your budget according to your vision and objectives?