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+++ title = "A kind view of business" publishDate = 2024-01-25T00:00:00+01:00 lastmod = 2024-11-18T18:12:26+01:00 tags = ["mindset", "rant"] categories = ["business"] draft = false meta = true type = "list" [menu] [menu.posts] weight = 3002 identifier = "a-kind-view-of-business" +++
Scrolling LinkedIn today, I saw a post talking about the entitled attitude of business owners when hiring{{}}Sorry for not linking to it, I can't morally support that platform.{{}}.
The post's point was that most businesses are not providing sufficient compensation for the skills and effort they are asking for when hiring.
And... I can't help but agree. But I would also like to voice a bit of my thoughts about the matter, because I feel like it needs a little bit more context and explanation.
A business has one goal: to make money.
To maximize the amount of money a business or enterprise can bring in, a business has to... stay in business.
What follows from that is that the business has to be structured in a way that's resilient to adversity, but also allows for increasing its potential in several ways:
- Sales/ Marketing
- Production/ Services
- Logistics/ Infrastructure
- HR/ Legal
The important part about these is, they're all departments that are run by humans.
Hiring an employee is no different from signing a service agreement. Your employee agrees to perform certain actions for a certain amount of compensation.
It is an adverse relationship, because while the owner of the business wants to get the most out of the employee for the given price, the employee wants to get the most compensation for the least amount of work.
And this is an important point. Fundamentally, an employer is on equal grounds with the employee at every point - the business can lay them off, and the employee can quit.
But... the employer can actually put themselves at a severe disadvantage, if they neglect the real value skilled people can bring to their business.
- Institutional knowledge{{}}I.e. all the things about your business that only they know, such as the way your systems interact with each-other, side-effects certain actions may have, etc.{{}}
- A practical understanding of the systems and processes in place{{}}The ability to rapidly solve issues as they appear, while keeping the big picture in mind, so as not to break anything.{{}}.
- The mood and culture in the company that facilitates teamwork and collaboration{{}}Seeing people leave makes their friends sad, and that decreases their trust and emotional investment in the workplace{{}}.
If the business doesn't understand just how valuable these contributions are, and doesn't compensate employees for their real contributions... churn starts.
Employees start realizing that their presence isn't appreciated, and that their contributions will be valued more highly elsewhere.
In my experience, it's rare that an employee quits because of a specific event at work. In most cases, it's the culture, attitude and mindset enforced top-down by the business owner/ CEO/ management.
And fundamentally, this is an incentives problem. People work better when they see that their efforts are being rewarded.
"Why should I work hard, performing duties and tasks that would easily warrant $40+/h,
when I'm only being paid $12/h?"
So then when employees are leaving, or being fired for bringing up issues{{}}Yes, there is a juicy story there, and the company in question isn't in my resumé because of that.{{}}, this not only creates an exodus (because employees start questioning the value and stability of their employment), but also strips the businses of established, knowledgable, skilled talent.
Which means new employees must be trained and brought up to speed. This is a significant expense to the business, often far outweighing the cost of compromising with existing employees, and giving them better working conditions.
If you're a micro-small business owner, you don't have the leverage, the power to compensate talent that bigger businesses have. You're not in a position to ask for a laundry list of skills that would put your applicants in the top 10%.
As an applicant{{}}I am actively searching for a job as of this writing.{{}}, when I see a laundry list of very in-demand and valued skills for a position, such as...{{}}This is pulled from the jobs page of a company I worked for.{{}}
- Be a top-rated CRM specialist
- Responsible for:
- managing customer data
- automating marketing campaigns
- creating effective sales funnels
- streamlining the CRM management process
- ensure seamless automations
- optimizing funnels
- designing engaging landing pages
- automating personalized email campaigns
[Follows a list of very undescriptive and vague "benefits", such as 'opportunities for rate increases', 'rates based on project requirements', 'we're here to support you' and such.]
Give me a guess... how much do you think this company is willing to pay for this kind of skill-set?
For reference, Glassdoor gives a bracket of $59k to $100k. That translates to about $28/h.
The real pay for this position is about $10-11/h, not accounting for the 'other duties as assigned' trick that American companies try to get away with.
So this person may end up not only managing the CRM, but also working on documentation, unrelated automations, project management, and a number of other things that are outside of their skillset.
Of course, the position is paid hourly under the pretense of the employee (by IRS standards) being a contractor. And so the business doesn't offer any insurance, worker's comp, PTO, or anything of the sort, because it's preying on international hires being 'invisible' in the system, and for whom these conditions are better than what they can get locally.
Many of them are amazing people. Kind, skilled, enthusiastic and very willing to learn, because as it turns out - life is hard when you're broke, so you do what you have to do.
And the same applies to American workers, too. Ironically, they have much fewer protections than the rest of the world has, and so they're getting exploited and manipulated by their condition to settle for less than their labor is truly worth.
With the rising wave of awareness about these topics (as we see on Reddit, BlueSky, Mastodon), businesses that want to find a point of stability from which they can grow have to start accounting for the human element.
Most of us are not happy with human-on-human violence, or violence in general. And violence isn't limited to fists, knives or guns. It's also the lack of respect for each-other as members of the same species.
The work an employee performs is what's on sale. Trying to get a better price is okay in my mind, but there are limits one shouldn't cross, such as compensation not meeting the needs of the employee.
Google can afford to take their employees all the way through the stages of Maslow's hierarchy of needs.
Small businesses often can't, but they should still strive to, because not doing so automatically undermines workplace stability, and increases costs.
It's not rare to see one skilled, established employee be let go, only to be replaced by two or three new hires, who not only cost more, but don't have the institutional knowledge necessary for them to be effective and efficient at the job.
So then, what can a small business do?
Focus on maintaining few highly skilled employees who are happy and fulfilled working for you. You can hire cheap and help newbies grow, but even then, compensation has to follow the market, if you want to keep them long-term.
Because if you don't, all those skills and knowledge go to your competition.
If you're a CEO/owner, and you're looking for help to get the daily stuff out of the way (communication, scheduling, task management, team coordination), get a good assistant. They're pricy, but you really get what you pay for.{{}}An assistant with some technical skills can often handle the entire back-end of your business on their own (fulfillment and deliverables excluded), and as your business grows, they'll be the perfect person to step into the COO position.{{}}
TL;DR: Be kind, and think a little bit about what each of your employees needs. Creating internal tension in your business, between management and employees is the perfect way to ruin long-term prospects, both for the business, and the people it consists of.
Thanks for reading my venty rant.