Stop Buying the Business (people)
Buying the business isn’t anything new. Everything from sales to promotions to discounting that one, pivotal client who always seems to have a referral funnel that is packed to the brim all contribute to a shrinking of margins at the expense of increased velocity. This in itself isn’t a bad thing and, in many cases, it can be quite a shot in the arm for a sales team. There are, of course, downsides to investing too heavily short term into ventures whose outcomes aren’t always certain. This is a calculated risk that is right for some companies in certain situations, but less commonly viewed through this lens are matters of human resources and internal operations.
Silicon Valley Comp Plans
By now you’ve probably heard of the aggressive hiring tactics of some of the world’s fastest growing companies. With increasing valuations and venture-backing that is placed on the expectation of exponential growth, the pressure to recruit talent is just as high as it is to gain market share. But it’s not all the overnight unicorn that needs talent, even established powerhouses like Apple and Tesla have been making waves with their recruitment wars. The most recent development in the life and times of the technocrati elite isn’t about what it takes to get talent to join a company, but rather what it take to keep them there.
High Stakes For Staying
It costs big bucks to get the best talent through the door in the first place, so big that many companies simply can’t afford to match the offers of the largest company in the running. What happens then, when it’s time to consider losing that talent well in advance of these huge investments panning out? The Yahoo empire is coming to a rather bleak crossroads right now but, based on the robust nature of the contract for their CEO, Marissa Mayer, what could be Yahoo’s downfall would be Mayer’s windfall. A severance package made of unobtainium aside, Twitter is making moves to stop brain-drain before it starts. In a highly unconventional move, the social media giant has actually been reported to pay out anywhere from $50,000-$200,000 to entice workers to stay for the next 6-12 months! These measures are being met with mixed reviews from pundits but what is sure is that between increasingly common layoffs and dwindling supply of investment capital to go around, tech companies are in need of some big changes.
Paying for Service vs. Service That Pays
We’ve spoken about the, “ready, fire, aim!” brand of spending strategies that appear to be rampant in Silicon Valley before. Without assuming that these HR investments won’t be successful for the above companies, it is safe to say that some companies have taken different approaches to growth that may prove to be preemptive side-steps to problems like this. Reducing operating costs isn’t just about slashing and burning or eliminating any of the benefits that employees value, it’s about choosing how to spend only what you have to on the services that give you the most bang for your buck. Simple, but not easy.
For starters, never assume that your team is aware of all of the options out there for some of traditionally predictable business expenses. Telephone service, for example, is one that many companies just assume they need to have, so they go to what they know; The telephone companies. While that logic is completely understandable, ending a search there won’t pass muster anymore. With a hosted VoIP telephone service you get the same enterprise-grade features that even the most robust on-premises systems provide but for a fraction of the price. In fact, advanced unified communications options aren’t really even comparable to traditional phone systems anymore because they accomplish so much more that their predecessors could only dream of. Everything from intelligent call routing to universal device compatibility separates systems like Dash from the expensive and cumbersome alternatives.
Succeeding in business is never going to be easy, especially not in the crowded, talented, and competitive Silicon Valley market. Choosing the right service partners shouldn’t add to that challenge, but rather it should position your company for greater success. After comparing the pros and cons of a hosted telephone system versus an on-site option, the biggest hurdle remaining is just picking the right Dash Plan for your business. Plus, when you build your business on a solid, healthy foundation you’ll attract more top talent than if you’re a sinking ship, so save all of those retention bonuses for something sweet. Like a new foosball table, obviously.