I was approached by a coaching client getting ready for a job interview. Their main concern was to come up with a narrative of what they could do in a position that had become vacant within their current employers’ organization.
My questions to the client:
- What do they need?
- How will they measure your success?
- Why wasn’t the previous employee a success?
- What tools & support will the company offer to help you be successful?
- What expectations are there for 90-days, 6-months, and a year?
I wasn’t shocked to find that the client had no idea what the answers were. What’s as shocking is that neither did the employer. Keep in mind, that this lesson is for both the employee and employer.
- Employers: don’t hire them if you cannot detail your expectations.
- Employees: don’t take a new job if you don’t have those details.
Employers
Those of you who have read my blog for a while know that I am an old-fashioned MBO type of manager/leader. What are the management objectives? What results do you want out of these new hires or positions? Can it be quantified? It is your responsibility in leadership to clearly define those expectations. You don’t just want an increase in revenue, you need to know what is needed to justify your hiring decision. The market rate for an employee’s pay is one thing, but it all boils down to those famous 3 letters.
R - O - I … Return on Investment
Once you know what the objectives are for a new hire, you can easily assign a value to that position. You can set expectations that they can be measured by. Your formula for success will be clear. This is not a difficult formula.
Let us assume that you have a list of prospects that realistically can provide an additional $100,000 in revenue by adding a new team member. Assume that you have a 50% Gross Margin. Simple math tells me that you can’t afford to pay this new person more than $50,000. We don’t care that the market rate for a new salesperson is $65,000 - you simply can’t afford it. It may be wise to eliminate those prospects for now. Spend your time being more efficient and effective with the clients you have.
The same formula goes for operations, accounting, finance, and staff positions. What value, in old-fashioned dollars and sense, do these bring to your organization? If you have a supervisor screaming for more labor on the floor, ask them what it means to the bottom line. Do they need a $40/hour employee plus benefits to help meet the needs of one customer that has a $30/hour benefit to the company? It may be wiser to eliminate the customer than hire a new employee. Sometimes less is more.
Financial Literacy
April has been financial literacy month. It is amazing how few of the clients I run into understand business basics.
Let’s all remember what the purpose of an organization or corporation is. It is to increase value for the investors/shareholders. Forget for now community stakeholders and all of the other ESG movements. Corporations are not sustainable if they are not profitable and continue to increase in value.
When you hire someone, you owe it to them to provide a pathway to success. You owe it to your organization and investors that it will add value to the company. Before you post your next job opportunity, dive into those financials and justify that decision. As you interview candidates for this new position you will be confident when you list their objectives. Then you can ask - Can you do this for us? Please tell me how or what experiences you have had to make us more comfortable in our hiring decision?
Or you can stick with the same old question everyone asks - What can you do for me?
It’s not easy finding and assigning value to every position in your organization. Once you put in that hard work today, you will have a better tomorrow. If you need help in defining those formulas, let Kole Performance Group lend a hand!
