Gini Dietrich

Doing More with Less: Is It Time to Begin Hiring Again?

By: Gini Dietrich | May 16, 2010 | 

Last week Ann Dwyer told me she’s been thinking about what the last 18 to 24 months have done to the mental state of entrepreneurs and whether or not they’ll be hiring again soon. Small businesses are such an important driver of employment and economic growth . . . it’s up to us to create jobs and deplete unemployment.

But it seems for more than a year, the mantra is “doing more with less.” Fewer employees, tighter budgets, less credit, lower customer spending . . . even less motivation, in some cases. In fact, Vistage International did a survey last quarter and asked its members if they are doing more with less. Eighty-six percent said yes.

That’s exactly what we’re doing.

We had to do two rounds of layoffs last year. Worst experience of my life. Granted, I get too emotionally attached to employees, which is a huge weakness, but regardless of being attached, it isn’t fun to have to let people go. And now I’m gun shy. We’re using freelancers to do tactical work. The idea of hiring another full-time person (which we haven’t done in nearly two years) scares me to death. I over-think and over-analyze hiring decisions. Two years ago, if it felt right in my gut, I hired, sometimes, on the spot. Now I bring in people close to me to help me with the interview process, to get a full 360-degree view. And I look for reasons that the hire couldn’t possibly work . . . until I’ve talked myself out of it.

Overkill, I think. It’s time to begin creating jobs again, and I’m a much more savvy business leader because of the past 19 months.

We are taking everything into account as we look at job creation. We’re looking at profitability of existing employees, average days of positive cash flow, debt-to-equity ratios, capacity as compared to realization, and we’re hiring extremely slowly. In most cases, we’re hiring only from our freelancer pool because we have experience working with them, know which seat on the bus they are best suited for, and know what kinds of results they drive.

It’s still a game of chance. You don’t know how anyone will fit into your culture or if they are going to make the transition from freelance to full-time (having a boss) well. But I’d like to think the very systematic approach means more thought, fewer mistakes, and less risk. Hopefully it will also mean no more layoffs!

What signs are you looking for to reassure yourself that now is the right time to hire again?

About Gini Dietrich

Gini Dietrich is the founder and CEO of Arment Dietrich, an integrated marketing communications firm. She is the author of Spin Sucks, co-author of Marketing in the Round, and co-host of Inside PR. She also is the lead blogger at Spin Sucks and is the founder of Spin Sucks Pro. Join the Spin Sucks   community!

  • Gini, there’s nothing wrong with the way you’re doing things. You’re making very smart business decisions, based on experience and knowledge. Don’t stop doing what you’re doing.

  • I’ve been in both the small and large business position coming out of deep recessions. It’s an interesting situation.

    The #1 priority when I ran a small business was cash flow. Investing for long-term growth and the like are important, but funding the operations of the business is always at the top of the list. I didn’t have the luxury of deep reserves, so bringing on talent out of the recession wasn’t an option.

    For an established, large business, the priority changes based on where the recession stands. Profitability is key at the beginning of the recession, which leads many companies to cut costs (including payroll). As the economy bottoms, some firms decide to make strategic investments (including personnel). Most large organizations are still positioned with sufficient reserves to weather out a recession. A large organization that cuts costs and really focuses on serving core customers can be positioned to come out of the recession faster than its’ competitors.

    This is where I think small businesses are disadvantaged to large businesses. My current employer never stopped hiring during the recession (we did cut back). We have always recruited top talent, but for each job we had listed in the recession we had 3-4X the number of top caliber applicants that we would have received prior.

    I think a savvy small business will take a few chances on key personnel hires early coming out of the recession, in order to help ignite new business.

  • My business partner always says the best thing to do is hire slow (and fire fast). And always hire people smarter than you.

  • Deb Dobson

    Gini, I so love your honesty. It is painful to lay employees off. I had to lay off several before it was me who got laid off. I truly understood what a painful decision it was for my former firm, and I understand that it was for you. It is not a weakness that you become attached to your employees…it simply means you care. Perhaps what the economy has taught us is to reflect on what we are doing, analyze how we can do things better and be cautious at growth in the future. If this is true, well, then perhaps the journey has been worth it.

  • I agree with Deb, I love your honesty. As someone in the career world myself, it can be so difficult to find the best talent out there and unfortunately, have to let some go. Our nation’s talent is constantly shifting around – with the average time in a job now 2-3 yrs. Outsourcing and freelancing just make so much sense for our times – less risk. I do think we are headed for a hiring turn, however, and look forward to some much-needed economic growth.

    I think sometimes hiring comes to you as opposed to seeking out talent for a position. I could keep rambling…. such a great topic, Gini!

  • Gini,

    We have been in the get additional good people on the bus mode for a little while (we tried to begin again a little before things started turning up to get a head start) Your points in this post are extremely valid and well covered. One thing we do a little different is have each candidate interview with EVERY member of the team they are applying to join (which sometimes can mean up to 15 individual interviews) and get appraisals from each. This is time consuming and laborious but it certainly brings the cream to the top. Some candidates find it arduous but most, or certainly those with the mentality we are looking for, find it refreshing and enlightening. This first set of interviews serves to refer the best for a second interview with executives and management and I have found that the young stars on our team are extremely conscientious of who they refer as potential team mates.

  • Dan, I like your approach. We also do the same thing…and it’s really interesting to get different perspectives.

    I’m pretty gun shy, but I also know I’m being MUCH smarter than I was two years ago about hiring people. Now it’s all about goals and incentives tied to exceeding goals vs. a base salary that changes only when the company does well. And take Abbie’s advice…hire people smarter than you.

  • Somebody already said it: Hire slow, fire fast.
    As someone currently seeking a job, I don’t much like this policy, but I understand it from a business perspective.

    And I know getting emotionally attached to your employees isn’t always the best idea, but I’d personally rather have a boss who was invested. Just sayin’.

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