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People make your business function!  Prominent business writers like Jim Collins say that the first step for a successful business is to "get the right people on the bus".  This menu collects distilled wisdom on staffing related issues.

Hiring staff

Chances are you are already familiar with hiring staff but, if not, or if your want to get a fresh opinion, consider our Hiring staff Recipe.

"Getting the right people on the bus" is an oft quoted business saying deserving of consideration.  Spending a bit more time selecting the right person, versus a quick decision just to fill the position, is likely to result in a more effective business team.

Staff Bonus Plans

Getting the right people on the bus is the first step but retaining and motivating the best people also needs attention. One way to do this is through merit bonuses.  If they are designed to reward the "right" behavior - whatever that might be for your business - they can help drive the bus in the right direction.  See Staff Bonus Plans Recipe

Reality check staff productivity

Even the best staff will slowly drift from best performance over time unless you periodically do a reality check on their productivity.

Some of the Profit Savvy tools in this area include:

  • Multitasking:  having people do multiple tasks simultaneously is sometimes thought to be a virtue but that is far from the truth.  Multitasking can lead to extended completion times, wasted 'switchover' time between tasks, inter-departmental friction and general burnout.  Check out the Multitasking Tool for how to spot time-wasting multitasking and ways to address the problem.
  • Peter Principle: promotion to incompetency: in a company with more than a few staff, it is entirely probable that some of them have been promoted too far or put into the wrong 'slots'.  If you leave them there, they are, by definition, less than competent and dragging your business back.  They are probably miserable as well. 
  • Parkinson's Law:  says that work will expand to fill the time available.  Are your staff busy being productive or just busy?  Consider this Tool to find out.
  • The Amazing 80/20 Rule:  says that 80 percent of your productivity will be done by 20 percent of your people.  Do you know who they are? Are you looking after these valuable assets?  Alternatively, 20% of your staff time is producing 80% of the results.  How much better could you do with the same staff if you focused on growing the 20% of maximum productive time.  See more on 80/20 staffing in the various sections of the 80/20 Rule Menu.

Metrics

As with all elements of business, you need a few reliable measures of how your staffing is going.  Read more on metrics at the Metrics Recipe.

Some staff related metrics might include:

Labour Productivity Ratio

Staff costs divided by profit will give the average profit generated by each staff member.  

It is not much use as a once off metric but if you measure it (say) every six months, you will get a trend line that is much more informative.  Very often the trend will go down over time due to:

  • More expensive 'manager' staff brought on board without a commensurate improvement in productivity.
  • The issues raised in the Reality Check topic above.

If you aspire to be a fast growing company, or at least an efficient one, you should be trying to get the labour productivity ratio trending up rather than down.  After all, any reduction in this efficiency means lost profits and they come out of your business-owner pocket.

 

 

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