Can You Afford to Hire Another Team Member?

I hear this from business owners all the time.
Chris, I need help. I know I need help, but I don't know if I can afford to hire somebody yet.

And here's the problem: if you wait until you're drowning, you're gonna hire out of desperation.
And desperate leaders make really expensive hiring decisions.

Welcome to the Chris LoCurto Show, where we discuss leadership and life and discover that business is what you do, not who you are.
Welcome to the show, folks. I hope you're having a fabulous day wherever you are.

Today isn't should you scale your workforce?
It's the four questions to answer before you add payroll so you hire on purpose instead of in a panic, which, by the way, tends to be how so many business leaders hire nowadays.

You know, if you have done this, and I'm sure you have, you are no different than most business leaders and business owners.
It happens all the time.

So don't start with who do I hire?
Start with what's the problem I'm trying to solve.

Am I trying to solve a problem? Do I have an issue?
You know, most owners jump straight to a job title.

I need an assistant, I need a salesperson, and that's the solution that comes up in their mind.
But here's what I want you to do.

I want you to back up and name the constraint first.
Where is there a constraint in your business?

Is it in sales?
Is it in capacity anywhere in the business trying to get things done?

Is it operations is missing, you know, some aspect of HR or accounting or whatever?
Is it any other type of administration? Is it leadership?

The thing is, a person isn't a strategy.
If you haven't identified the problem, then you're just adding payroll to confusion.

So here's my question for you.
If you hired someone tomorrow, what specific problem would be gone in 90 days?

If you can't answer that, if you're not sure, if you're not certain, then we really need to reconsider hiring somebody.
We've got to focus on hiring for the right reasons.

Now, maybe there's a people shortage, maybe there's a systems problem.
But before you add a person, find out whether you actually need more hands, or better use of the hands that you've got on your team.

Fix the System Before You Add to It (02:23)

Adding someone to a broken process just gives you bigger broken processes.
And I will tell you, this happens all the time.

The funny thing is that when we hire somebody who, you know, like say a salesperson, a marketing person, and so much of their pay is dependent upon what they produce, that's an easier hire.
If you hire a salesperson that's a hundred percent commission, well, that's an easy one.

They don't sell something, they don't eat, right? They don't get paid.
But we are always, always looking for more administrative people.

And administrative people are fixed expenses. They tend to be a fixed expense.
So when you think of hiring somebody and it's like, well, we've got this broken area, or we're not getting these things done correctly, or we're not getting these things done fast enough.

If we just threw another person at it, and I will tell you, many times you will hear from your team, we just need another person.
There's so much work, we're overwhelmed.

And so a good leader goes to, well, I've got to hire another person.
Folks, I'm going to suggest that is not the correct answer.

The correct answer is, how is the process working?
Have we spent time troubleshooting our current process to find out if the system is broken?

So many times I've seen leaders hire extra people because the process was broken and they had no clue.
And so all you're doing is putting more people in place, spending more money.

And if you would have actually spent some time fixing the process, then you would have set the person up for success who's currently doing it.
So many times, strat plan, coaching leaders, whatever it is, we've discovered places where people are not operating a system well.

And when we sat down and really ripped it apart, we discovered we didn't need more people.
We didn't need more payroll.

We actually could reduce payroll or move people around or put them in better spots because we had broken systems.
And that is something that you have to focus on.

How's the system? How's it operating?
Or have somebody help you take a hard look at it, somebody who can rip it apart and see is it operating well?

Five Questions to Ask Before Adding Payroll (04:48)

Another thing you should ask yourself, you know, here's five things I want you to ask yourself.
What are people doing that shouldn't be done at all?

Is there anything in your business that you should not be doing?
Now, when I ask that, probably most everybody listening to this is gonna say, why would we have people doing things that they shouldn't be doing?

That's a legit question. I hear you.
Here's the problem.

So many times leaders and business owners are so blinkered and so covered up with so much stuff that they believe every rule, even the one they started five, ten years ago, needs to be in place without understanding it's actually not helping the cause or it's not helping us get to our vision.
Or worse, and we find this all the time, it's actually leading us in what we would call a shotgun approach.

We have people going in different directions and not going towards a laser focused direction.
So our resources are being utilized in the wrong way.

We're spending more money on a team to accomplish a whole lot of stuff.
And some of those things literally shouldn't be jobs anymore because maybe it had a good place at some point, but it doesn't anymore.

Another question to ask: What is being duplicated in our processes, in our team, in our resources?
Now, for me, I'm always going to say start with leadership and ask yourself the question: how can you duplicate the leader, the business owner to get stuff off of that person, things that are being successful, things that are working, things that are cost justifying?

How can we get those things off of that person so that we know another person can step in and we can create more revenue?
Well, what if that person's doing admin? Fantastic.

If that admin is cost justifying, then it's cost justifying somebody else who's bringing in money, somebody who's selling, somebody who's marketing.
Every single role should be lifting the business up in a way that allows us to make more money.

If it does not, why not?
So are we actually duplicating in areas?

That's an area that we want to really focus on and ask ourselves: can we?
I'm always looking to duplicate myself or my leaders.

Because there's heavy duty things on their shoulders that if we take that off, then we allow them to step up and do something else while somebody runs with those pieces that were bringing us more money or allowing us to make more money.
Another question, and let me tell you, especially in today's age, this is an incredibly important question that you should be asking all the time.

What can be automated?
What do you have in your business, in your systems, on your team that can be automated?

Now listen, you are not going to replace your entire team with AI. That's not going to happen.
You have to have people, especially when it comes to leadership, that's an absolute must.

You have to have leaders leading people to make things work.
But are there ways of automating anything?

Is there any system that you can put in place that automates what's currently being done?
Another important question to ask, all of these are important questions, right?

Is the current team working in the right roles?
Now, I will tell you that a lot of people discovered when COVID hit and they had to move people around, you know, and it was scary for some folks.

I can tell you we had somebody who was a vital part of our team that we didn't need in that role, but I didn't want to stop paying him.
I wanted to put him somewhere.

So I moved him into another area.
And the crazy thing is, even though personality style wise, this is not something he wanted to do, he actually excelled at it because it tapped into an important motivator in him that allowed him to express himself through writing and stuff.

And it helped by allowing us to create more content for our clients in a way that blessed them.
So maybe you have some people working in areas and they're not the right roles.

Should you be adjusting, folks?
Is there somebody stronger that could be in a role that maybe is floundering?

Spend some time digging in, finding out.
Another question is: is the owner still holding work that belongs elsewhere?

And I will tell you before you even look into this, the answer is yes.
Unless you've gone through our killing the leadership crazy cycle and worked on that like crazy, you're definitely holding things that could go somewhere else.

You're still doing things and paying yourself your salary for stuff that you could spread out into team members, people that you're paying administrative dollars.
So in other words, let me flip this for you.

You're doing things at a rate that you shouldn't be paying somebody to do.
You have people that you can push this to, or you can hire people.

And then you should be doing things that are worth the rate that you're getting paid for.
I'm not saying that you're not doing those things. I'm saying that's a great place to be checking in on.

We do this through a process we call Love Hate Delegate, very powerful way of getting things off of your plate and setting people up for success so that you can focus on higher level things that you are needed for.
And believe it or not, your team wants you focused on the higher level things.

So as an owner, I want you to realize that it is quite possible that you're a quasi-bottleneck in an area because you're doing things that somebody else should be doing.
Right.

On top of that, if you have any aspect of helping to bring in revenue, whether you're a product for your own company, whether you sell stuff, whether you focus on networking with certain people, then every bit of administrative stuff that you could be paying somebody else to do at a lesser salary is keeping you from getting that revenue in the door that allows you to hire more people in the first place.
So really focus on whether or not there are things on your plate.

And I'm telling you there is. We would love to help you discover it.
It's not difficult. We do this all the time.

But when you do, once you get those things off of your plate, you will be blown away by how much it frees you up to do higher level, more important things.
Sometimes you don't need another person. You need the people you have doing the right work.

Now, let's get into one of the most important aspects of this entire conversation.
This is huge for me because things that we do, things that we focus on, we do a lot of work that's very expensive to us.

Because our number one focus is worshiping God with our work.

Know What Changes Because This Person Exists (11:59)

Our number two focus is helping people, helping them with their business, helping them with their lives, their marriage, raising their kiddos, whatever it is.
Our goal is to help people as much as we possibly can.

Our third motivating factor is profit.
So we are definitely profitable, but that's not our highest motivating factor.

So we always have to make sure, and if it was our number one motivating factor, this conversation would still be the same.
We're always trying to make sure how do we cost justify a position.

So a hire either directly produces revenue or it frees somebody else to produce more valuable work.
So let's kind of walk this math out loud.

If you spend $70,000 fully loaded on a role, what changes because that person exists?
It doesn't have to be 70, it could be 30,000. It could be 40,000.

If you hire a role that you're thinking of hiring, whatever the salary it is that you spend on it, then ask yourself this question: is it going to bring in revenue?
So obviously, if it is a salesperson, if it's a marketing person that is directly connected to bringing in, you know, leads for revenue, whatever that is, that's an easy one to answer.

But something that people don't realize, they go, well, I've got all this administrative work, and no, of course it's not going to cost justify.
Well, my first question to that would be do we need to be doing all that administrative work?

Can we automate it? Those questions that I asked earlier.
But here's what I want you to think about.

If you freed up a producer, so let's say you've got a salesperson that's heavily doing sales, but also heavily doing administrative work.
Now, please hear me on this.

Every salesperson doesn't want to do administrative work.
If it's part of their role, it's part of their role.

But I want you to go with me on this.
Let's say you had somebody that was overloaded with stuff.

Maybe they're doing part estimating and sales and doing all the administrative tasks and all these different pieces, right?
And you were to hire somebody to take off certain aspects of that administration, not making sure that they get all of the sales information correct.

That always has to land on the salesperson. So don't hear me saying that.
But let's say they were doing other stuff that they shouldn't be doing.

And you brought somebody in at, I don't know, 36,000, 40,000, 50,000, whatever it is.
And they took that administrative work off of that person, and that person was able to produce $200,000 more.

The question is, would that be worth it?
Obviously you have to understand your P&L.

But that's a pretty good deal if you were able to drop $50,000 on somebody and allow somebody else to produce $200,000, which obviously over time it's probably going to be more than that.
That's a pretty decent trade-off here, folks. You have to think about that.

If you can hire and free up a producer, free up a salesperson, free up a networker that brings in, you know, the whales, whatever it is, what does that look like?
Also, does it give capacity?

Another thing that people make a massive mistake on is they hire salespeople.
And then sales are coming in and they're missing, you know, they're not getting to all their leads and all this stuff.

And so they're like, we need more salespeople because more salespeople would close more leads.
Guess what they don't focus on?

Do we have the capacity to actually service all of the sales?
And folks, this happens way more than you can imagine.

People will focus too heavily on hiring salespeople, and they don't bring up the capacity of the team to actually produce what's being sold.
If you're somebody that trades time for money, then you know exactly what I'm talking about.

You can only give so much time.
You only have so much time that you can actually do something.

I'm somebody who trades time for money because so much of my time is spent in strat plans and coaching and Next Level Lives and quarterly retreats and our Next Level Leadership Live event, in doing episodes, you know, doing podcasts, doing shows.
So for me, my time, so much of it is spent on spending time with clients to solve big problems.

And I mean big stuff, right?
So capacity is vitally important on our team.

We need to make sure that we can create capacity and that we don't outsell our capacity.
Another area I want you to focus on is costly errors.

So think of areas that perhaps your team is making mistakes.
Think of areas, and this is something that people do not calculate enough.

How many times is your team having to rework something, redo something?
So let's say you're a manufacturer and you're producing something.

How many times do they have to go back and fix something because something was done incorrectly or a process was messed up or they don't have the skills or the correct tools?
Or how many times if you're in construction or painting or, you know, pest control, whatever it is, that somebody goes out to a job site and doesn't do it correctly, and you have to send somebody back out again, or that person back out.

And that's costing you money, that's costing you resources.
Or maybe it's even costing you clients because clients stop paying you.

All of these opportunities, freeing up a producer, adding capacity, preventing costly errors, these are huge for you if you will spend time digging in.
It doesn't have to be a dollar for dollar revenue.

In fact, I would love it to be considerably more than just dollar for dollar, right?
And sometimes maybe it's spending more on somebody that it's going to build a greater, you know, revenue stream from freeing somebody up.

But there should be an answer to those three questions.
You should spend time on this asking yourself, what does this look like?

It's something that we spend a lot of time with business owners and business leaders doing, you know, getting them away from their distractions and being able to focus on walking through these processes and digging in and finding money and revenue and stuff that they weren't even thinking about.
To get them to have the right hires and make the right decisions.

Next thing I want you to focus on is making sure that you hire before desperation changes your standards.
Now, when you're drowning, you lower the bar. It's a natural thing.

You skip steps, you rush the process, you know, you compromise culture just so that you can fill a seat.
And then you spend a year paying for it.

Hire Before Desperation Changes Your Standards (19:11)

So many times people are like, my gosh, we're behind. We just need a warm body in the seat.
Get somebody hired.

You interview three people and you hire the person that laughed at your jokes.
That is a terrible, terrible process.

The NFIB reported in September that 56% of small business owners had hired or tried to hire in August, while 35% had openings that they couldn't fill.
So waiting until you're in crisis to start looking is especially risky when qualified people aren't easy to find.

So think about it.
If you keep waiting and waiting and waiting and then rush a process, guess who you're gonna get?

You're gonna get whoever's available.
What if you spent more time?

What if you could spend time seeing this coming and instead started the hiring process?
And because you had plenty of time, you were able to be super picky and you were able to wait for the right person.

Do not wait until you're drowning.
When you're drowning, anybody with a pulse starts looking qualified.

And let me just ask you, have you ever hired somebody just to fill a seat?
Right now I could hear people all over driving in their cars, sitting at home, riding on their lawnmowers, going, yep. I've done that.

I made that mistake.
I know in my early days I did.

My early years of leadership, I just needed a warm body.
And so I made that mistake, which cost me a lot and became a large part of my adjusting how I did leadership and how I ran business to make sure I never made that mistake again.

That's why our interview process is so long.
Our interview process is deep.

We interview out the things that we don't want in our business, right?
So make sure you're not hiring out of desperation.

And before you post another job, before you put anything out there, I want you to write down four things.
Number one, the problem this position exists to solve is.

Number two, the result it must create.
Number three, how you will measure the result.

Because if you don't actually measure the result, you could have somebody working for you for an incredibly long time before you find out they're not doing exactly what you wanted them to do and it's not making you what you wanted it to make.
And number four, how does this role cost justify?

If you can't answer those four things, you are not ready to hire right now.
And if you're still thinking, Chris, I know I need help, but I'm not even sure what I'd hand off and it still has to run through me.

Well, that's exactly where I'd start.
Because maybe you're the bottleneck the new hire is supposed to fix.

Maybe you're still holding work that belongs to somebody else.
Maybe every single decision does still have to come through you.

If so, the question is does it have to stay that way?
Now we have created a free owner dependency assessment that'll help you see how dependent your business really is on you, and where that dependency is coming from.

That only takes a few minutes, and the link is right there in the description.
So do yourself a favor. Take the assessment and look at the results honestly.

Answer it honestly. Look at the results honestly.
Because knowing how and who to hire starts with knowing what your business can't do without you.

So hire on purpose, not in a panic.
Name the problem before the person.

Fix the system before you add to it.
Know what changes because this person exists.

And start before you're desperate so you don't lower the bar.
Folks, share this information.

Send this to a business owner you know who keeps saying, I need help and I don't know if I can afford it.
There's plenty of folks that need to hear this today so that they make the next right decision.

Well, hopefully this has helped you today.
As always, take this information, change your leadership, change your business, change your life, and join us on the next episode.