Lean and Clean Staffing

Whether you are launching a new business or growing an existing one, the biggest run on money is often the HR costs. While the HR administration on average costs less than 1% of operating expense, the people expense itself can be 33% of operating expenses or more. It is imperative to staff carefully as you launch and build your business.

Spartina’s philosophy, echoed by successful entrepreneurs, is: Keep it small.

Benefits of Small Staffing

A small staff saves money and cuts down communication overhead. It makes decision making simpler. Administration is less, and in general, things can happen faster with all the focus on product rather than on the people. As one leading and successful technology leader stated, with a small but successful company, you can call your own shots, and run at your own pace.

Staffing Models

We know some start-ups that have basically one employee— the founder, visionary and implementer. Using outside resources allows him to keep the focus on the product until such time as he needs to bring in other players.

Another model is to create a small core operating team. The visionary or CEO might bring in one person to create the product, and another to drive the marketing. Bringing in high-level competent people at the start reduces the risk and increases chances for success. If this is an internet or software company, the team might have a product person, a coder and the CEO or business manager. If it were a company such as a winery, you might have the winemaker, product/marketing manager and CEO.

Finally, some of the more successful Internet start-ups have not only started small but remained so even while becoming highly profitable. One is example is 37Signals, Rather than looking for venture capital and growing their company by hiring more and more people, they use a subscription business model that brings in great revenue. For a look at their philosophy, see their video listed in our video links.

How Big to Grow?

As you expand your staff, and your revenue, keep an eye on your effectiveness. One measure of HR effectiveness/sizing is either revenue per person or income per person. One report suggests that the revenue per person target for an average US company should be about $465K. Likewise, the income per person should be around $45K. These goals may double or be cut in half depending on your industry and company size. For more on HR Metrics, see our web articles.

Clean Staffing

What do we mean by clean, rather than ‘mean’ staffing? At Spartina, we feel that a successful business depends on people who know how to balance work with life. Mean people tend to resort to mean tactics; clean people treat everyone as family, even while making difficult or strategic decisions. They can go home at the end of the day with a clean conscience. As you look for staff to start or expand your business, keep in mind that your values, your company philosophy and your way of life will shape the kind of people you attract. Keep it clean and lean, and you can find the success you dream of. For more about the kind of staff you might want to hire, look at the video from entrepreneur expert, Guy Kawasaki, called Be a Mensch.

Resources

For more information about Staffing expenses, see our articles about

• Compensation
• Relocation Expense
• Recruitment
• Staff Training
• Termination Packages
• HR Admin
• Health & Safety

Also review our other hand-selected excellent web articles.