I. Businessman. (Part 11)
People define an organization. They can take your business to new heights. Or bring about its demise.
Getting your staffing right, is therefore one of the most important steps while setting up.
And while factoring in your projected cost on manpower, as a businessman, keep this in mind:
Learning No: 13
You will pay more for less
A large organization always attracts good people. People join these companies to work, earn and most importantly improve the value of their CVs. Typically a large organization, which is coveted and sought after, pays lower than industry standards. People working there don’t mind because, the value they derive is not only the pay, but also advancement of their careers with an established company.
The salary expectation of a potential employee is inversely proportional to the reputation of a company. And a startup has none.
So, the only reason that these very same people will join a startup, is higher pay.
The classic mistake people make when planning to set up, is to peg their projected expenses against industry norms. Once you start off and look at recruiting, you end up realizing that the budget you have allocated towards a profile is almost always insufficient.
So you end up making a compromise.
Either you compromise on the quality of people you hire, leading to a lowering of the productivity and quality delivered by your organization, or you end up paying more to have good people on board.
Either way you suffer.
In the first case your revenue potential gets affected, as you are able to do only so much with the team on board. In the second, your profitability projections get affected, because it now costs you more than planned to run the organization.
So while making your plan, it is better to err on the higher side, when it comes to staffing cost projections.
It is easy to find people who suit your budget.
But it is difficult to find people within your budget, who suit your need!
TO BE CONTINUED…
(This is part 11 of a series of blogs on my learnings as an entrepreneur )
Read Part 12 here