Value Added – Hiring Pt. 1

If you’re a regular Value Added listener, you’ve no doubt discovered that Jarod and Jonathan agree on a lot of things.

Such as why having an agency is the worst idea and the benefits of partnerships over white labeling of services.

Well, for this week’s episode, the gloves come off…

Hiring the right people is an essential component for the success of almost any business.

And for once, Jonathan and Jarod don’t see eye to eye.

It’s no steel cage deathmatch, but it is an opportunity to hear your hosts debate the merits of their own unique hiring approaches — one of the most challenging aspects of operating any company.

Key Takeaways

• The “right” time to hire someone is:
  • A) When you can afford to
  • B) When you need someone with a skill set you don’t possess
  • C) To free up your own time to concentrate on scaling the business
• A common approach to deciding when the time is right to hire someone — and how much to pay them — involves estimating your own effective hourly rate. This is easier said than done—people are notoriously bad at accurately assessing how much money their time is worth.

“You can bullshit all you want… but just because Matt Diggity’s SEO consulting rate is $2000 an hour or whatever, doesn’t mean your time is worth that because you think you’ve got a similar skill set.”Jonathan Kiekbusch

• The easiest (and most accurate) way to calculate your actual hourly rate is to take the total amount you pay yourself from the business each month and divide that by the number of hours you work. For example, if you pay yourself $1000 a month and you work 160 hours – your actual hourly rate is $6.25:
  (Monthly Salary/Total Hours Worked = Actual Hourly Rate)

“If you can hire someone to do what’s eating up your time for less money per hour than what you cost the business, then great!

What you really want to do is start buying your time back.

For me, the really, really big thing is identifying where I’m spending a bunch of my time and how much it’s going to cost the business to buy that time back for me. So I can work on higher-level things.”Jonathan Kiekbusch

• Jonathan and Jarod agree that your first hires should be a bookkeeper and a lawyer.
• Hiring a bookkeeper will start saving you time and money right away. Hiring a lawyer is likely to save you money in the long term as opposed to relying on online templates and dubious information.
• Jarod recommends having an on-call developer as a “value add,” to help clients without in-house IT resources solve relatively simple technical issues with their websites.
• For Jarod, hiring is a last resort:

“Hiring is the last thing I want to do. Payroll is the number one expense of any service-based business — on average, it’s 60%. My first tendency is to study and streamline processes, and then to look at automation.

Automation doesn’t mitigate time, it eliminates it. I want to eliminate the time that tasks take as much as possible, not just move the responsibility on to someone else’s plate”Jarod Spiewak

• Automating even “simple” tasks can not only save time and money, it can also boost team happiness by reducing repetitive and “mindless” chores.
• As the owner, you need an in-depth understanding of the role you’re hiring for. Otherwise, you may be placing your clients (and therefore your business) at risk.

“It’s really important not just to hire and walk away and hope for the best.

Even if you’re hiring someone for a position you’re not qualified for.

Even if the hire has 25,000 years of experience because they’re immortal.

You can’t just leave them to their own devices and hope for the best”Jarod Spiewak

• Look to “scale people up” within your existing team first before hiring anyone new.
• Jonathan shared one of his favorite scaling hacks:

“If you get stuck trying to grow a part of your business, never hesitate to reach out to thought leaders that have already figured the problem out.

Offer to buy a few hours of their time to give you real insight into the things you need help with.”Jonathan Kiekbusch

• No matter how long you think it will take to get a new hire fully integrated into your systems and company culture, double it!
• Just because someone is brilliant at their job, doesn’t mean they will be brilliant (or even acceptable) at managing or mentoring other team members.

Don’t miss part two of Jarod and Jonathan sharing their hiring tips and strategies — coming up next!

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