You Get What You Pay For

This economy has turned us all into a bunch of cheapskates.  Companies are tight fisted with dollars, which causes employees, also known as consumers, to be tight fisted with their dollars, and that feeds back to companies being tight with their dollars and we just keep going around in this circle. And just like consumers, now that some companies are looking to hire again, they seem only willing to buy if they can get a bargain. 

But while times have changed, the old adage is still true, you get what you pay for.  Low priced items save you money upfront, but cost you in the end because they do not perform well and often need to be replaced.  You’ll have the same problem with bargain hires – you’re either hiring mediocrity (oh, the hidden costs of mediocrity!) or you are truly getting a bargain but that person will leave (and need to be replaced) when they are offered fair market value for their talent.

I get it, you’ve got limited dollars to spend on hiring and budgets are tight.  But that doesn’t mean you should buy junk.  Junk doesn’t perform well and has to be replaced eventually.  High quality products cost more, but they have more value and last longer.  And if you ask someone to discount their price, they are likely to apply that discount to their work performance as well, to keep the deal “fair”.  You’re kidding yourself if you think you’re getting a good deal because you aren’t factoring in the hidden costs of low or “discounted” performance and the inevitable replacement costs that come with bargains.

If you want a top quality workforce, and you want the kind of people who are going to add value to your business, you will need to invest in good people.  Sure, just like property values have dropped, salaries have lost some ground in this market too.  But there is still such a thing as fair market value.  If you’re hiring someone at a fair price in today’s market, you had better be prepared to adjust their salary upwards as conditions change, or risk losing them to a competitor when the market improves. 

We’re not talking about getting the best price on a kitchen appliance or gallon of gasoline where doing some bargain and comparison shopping might make sense.  We’re talking about people here – and people can make a real and meaningful impact on your business, customers, and bottom line.  When it comes to people, don’t focus on price, focus on value.  And remember, you get what you pay for.