In an Inc.
Magazine article on the hot-button topic of job-creation, by veteran
entrepreneur and contributing editor Norm Brodsky, Brodsky's position is that,
while he and all good business owners are happy when they can give people jobs,
creating new jobs isn't -- and shouldn't be -- a goal. I'm a long-time fan of
Brodsky and his down-to-earth advice, and an admirer of his tremendous business
accomplishments. But I don't fully agree with his argument, or at least the way
he frames it.
In his piece,
Brodsky focuses on job-creation as it relates to overhead and productivity. He
says "no one operates a company with the goal of maximizing labor
costs," and of course in that regard he is right. We business owners
naturally want -- and are generally obliged -- to generate the highest possible
return on every dollar we spend. That means getting the most we can out of our
real estate, machinery and people. Certainly no one has "increase
rent" as a business goal, and Brodsky is saying the same thing in his
labor cost argument. He is looking at the expense angle (the very conservative
approach with which I almost always agree), rather than the investment view of
hiring.
Let’s look at it
a different way, and I don't think it is semantics or nuance. To my mind,
creating jobs is a legitimate and even important goal, based on the reasonable
assumption that a good businessperson knows not only what is best for the
business today, but also what will make it grow tomorrow. All businesses are
limited by their available resources, with money and time (people) being at the
top of the list. For most, growth beyond a certain point requires more of both.
An article, “Veterans'
unemployment -- a national disgrace 6 keys to your employees hearts” Google
pays dead employees - can you beat that?
Going back to
the rent analogy, no business owner wants to increase his occupancy costs when
all other things are equal. But many dream of a bigger factory, warehouse or
office that will allow them to increase capacity, offer new products and
services, and otherwise take them to the next level. Yes, it's a
chicken-and-egg thing: It's incumbent on us to do the most we possibly can with
our existing resources, yet those resources also create limitations.
As Brodsky says,
we must "constantly search for ways to maximize the productivity of the
people we have, rather than adding to head count." Again, he's right if
you look only at today's results. But if you know (or at least believe) that adding
a new sales manager, shift supervisor or driver will put your business in a
different, better place, creating those jobs should be a very real goal.
Some people will
say I am confusing a want with a need -- in other words, you hire people
because the growth of the business requires it; "backfilling" rather
than "paying it forward," if you will. But the two aren't mutually
exclusive. Yes, on a day-to-day basis you should try to hire optimally, in sync
with your business, and maybe for some businesses that's enough. I fully
respect Mr. Brodsky's financially disciplined argument and his acumen, and his
successes speak for themselves. But sometimes it's wise not to count every
single bean.
For many of us,
having job creation, as a goal is not altruistic, it's critical. How many small
business people have said "if I only had someone to..." knowing that
creating that new job would make new things happen, open new doors. I can't
hire people every day, but not a day goes by that I don't want to, and I assure
you it's not because I want to make less money.
Adding employees
is unquestionably a double-edged sword. On one hand, it is a risk like any
other investment: If the employee doesn't produce results that justify the
hire, productivity is diluted, and her job (and perhaps others) may not last
long. Turnover is painful and expensive. But on the other hand, making the
right forward-looking hires at the right time, and accepting the initial
overhead impact, can be critical to growing your business, so I submit that creating
new jobs can and should be a legitimate business goal.
I could get into
much broader, philosophical arguments, like the long-term value of helping to
grow the consumer base by putting money in people's pockets. Hiring supports a
healthy business "ecosystem" for all of us, and unemployed people
don't buy what we sell. But that's a very big and very different discussion.
Finally, though
you won't find it in any business book, I think that as long as your business
is healthy and can meet its existing responsibilities, creating jobs is, well,
good karma. It's one of the great privileges and rewards of owning a business.
And even if you don't buy the "what goes around comes around" angle,
you should know that the value of hiring goes beyond getting more work done. It
also contributes to a positive culture and reputation, and it's good PR, all of
which have very real worth.
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