More Money Doesn’t Mean More Employees

For some reason, businesses love to flaunt their employee numbers. In September, Google announced that it would be hiring around 2,000 of HTC’s engineers for some new hardware, and you can check out the article at recode.net for more information. To many tech enthusiasts, it was obvious what this was. 2,000 engineers from one of the world’s leading smartphone manufacturers? Sure enough, when October swung around the Google Pixel 2 and the Google Pixel 2 XL were announced. These new flagship smartphones had a huge impact on the smartphone market and marked Google’s return to the hardware side of the industry.

Source

 

The Problem With Overhiring

 

However, have you ever wondered how many of those 2,000 engineers are actually working? Let’s use a different example to illustrate this point. Picture your past workplace or the current office that you work at. How many people actually work hard? How many keep their heads down and “do work” to be worth their salary? The answer is likely not many. Even you might be guilty of not actually doing much work in the office. Perhaps you’ll be at the computer typing for a total of 2 hours a day, or maybe you’ll spend the rest of it delaying your work and being chased by your boss for some reports. Either way, it’s obvious that many employees in large companies don’t actually work as hard as they claim.

 

In Google’s situation, it’s difficult to determine how much work those 2,000 engineers are actually doing. Even if you were able to calculate that those 2,000 engineers are working at 50% efficiency, that doesn’t mean only 1,000 of those engineers are working. It could mean that every engineer is just putting in half the work they should be, or it could mean that some of those engineers simply don’t have much work to do, and thus, sit around twiddling their thumbs doing nothing.

 

You might think that culling these numbers is perhaps the best way to save money and retain the same level of productivity, but the problem goes deeper than that. Instead of picturing it as half lazy half hard-working employees, picture it as 2,000 talented engineers that are simply not being tested to the best of their abilities.

 

When hiring talent, it’s important to understand that everyone has the capacity to make incredible changes to your company. Engineers, programmers and developers all have the ability to transform your business, but it’s just a matter of being able to utilise their talent to the fullest. As a startup, you need to understand that throwing more employees at a problem isn’t going to solve it.

 

Let’s use a rather silly, but honest, analogy to demonstrate this point. Imagine you hired an employee to fit a light bulb, but they couldn’t because there was no ladder to climb up. Would you hire more employees? Absolutely not. It doesn’t matter how many employees you throw into the room to fit a light bulb, they can’t reach it because they don’t have a ladder. Eventually, one of those employees is going to realise that they should probably get a ladder so they can climb up and fit the light bulb and complete the job. However, most of those employees are going to be sitting comfortably eating up your salary while having an easy time of basically doing nothing. Hiring more people to tackle a problem isn’t the best solution.

Source

 

Some examples of business with few employees

 

Let’s take a look at some examples of business that made it big with few employees.

 

First of all, Craigslist, one of the most well-known classified advertisements websites in the world. It serves over 57,000 cities across 70 countries and had a net income of $500 million USD in 2016. The number of employees? 50. Yes, that’s the number of employees in 2017, just 50. How, you ask? It’s to do with Craigslists’ implementation. They can serve thousands of cities because their business hosts classified ads. They charge a small fee for you to post an advertisement and that’s where their money comes from. They don’t need to travel to 57,000 cities, they just need to manage some of the advertisements and allow users to post them. In terms of actual work, they don’t need that many employees.

 

Next, let’s take a look at the ever-popular video game, Minecraft. With fewer than 30 employees, Markus Persson sold Minecraft for a staggering $2.5 billion to Microsoft back in 2014. If you’re interested, more information about the transaction can be found at businessinsider.com. How could a bedroom developer create a video game, explode in popularity, create their own company and then sell it to Microsoft for $2.5 billion in the span of just 5 years? Simple: it appeals to people. Minecraft as a game appeals to a young and impressionable fanbase but also tickles the fancy of older gamers too due to its simplicity and charm. Thanks to social media and content creators spreading the game all across the world, it quickly became a global phenomenon that is growing to this day. Since it’s a digital piece of software, it doesn’t require an investment to produce copies of it. You simply generate a software code out of thin air then sell it to the customer—you have an infinite supply.

Source

 

Stop overhiring for your company

 

If you’re operating your own company, then it’s important to pay attention to the needs and wants of your audience and your employees in order to stop overhiring and wasting both talent and money.

 

If you feel like you’re having a difficult time managing your own employees, then check out services such as getsling.com that will help you schedule employee working hours and track them with simple to use applications. This will help you monitor how effective your employees are, and it will prevent you from hiring too many to a point that you don’t know what to do with them.

 

Another way to prevent overhiring is to give your employees room to grow. The more work your employees have, the more they feel like they’re a part of your company instead of a disposable worker. Let them face challenges, help them overcome problems and give them space to improve their skills. Only then will your employees build a healthy work ethic and also grow to feel like part of your company. Let your employees suggest ideas that could turn into completely new products or strategies to run your business.

 

Overhiring can also lead to frequent layoffs that will demoralise your staff. The last thing your employees want to see is half of the company being fired. It doesn’t promote employee loyalty and it could even discourage people from joining your company in the future. The last thing you want to do is overhire. It’s not good for the economy and it’s certainly not good for your business.

 

This article should have given you plenty of good examples of why more money doesn’t mean hiring more employees. Yes, there are times when hiring a stronger workforce can benefit your business. However, there are plenty of companies that are operating today with huge revenue sums and low employee counts. The type of business you run plays a big part in this, but the lesson to learn here is that you don’t need an army to start a war—a small group of talented workers is all you need to disrupt the industry and become successful.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s