The answer, really, is obvious: getting the right people. Just ask Kevin Ryan, a man who has founded several successful Internet companies, including Business Insider.
In a recent interview with Inc, Ryan said the first thing an aspiring-entrepreneur should do (after they have an idea) is figure out exactly what type of employees the startup is going to need to have and then spend time finding the exact right people to fill those roles.
“You need to think of (hiring) as really the biggest decision,” Ryan told Inc. “Because most businesses now are really just about people.”
It’s Worth Splurging On The Best
According to a study by Dr. John Sullivan, a well-respected voice and longtime researcher in the recruiting space, a top-performing employee returns at least 14 times their annual salary. That means that a $50,000 employee who is exceptional brings in $700,000 annually to your company!
Contrast that with a disastrous hire, which the US Department of Labor estimates costs up to 30 percent of their annual salary. That’s a $715,000 annual difference between a great $50,000-a-year employee compared to a terrible employee!
Most employees will fall in the middle somewhere, but Ryan, in his interview with Inc, said it is always worth to pay a little more to get someone fantastic.
“A good person in a job is much, much better, two times, three times better than someone who is not very good,” Ryan told Inc. “And even though that good person only needs to be paid 10 percent more, 20 percent more. In my mind they are always cheaper than a mediocre employee.”
Bottom line: no company can overcome bad people. And spending another $10,000 or so on someone great is probably the best investment a company can make.