For finance leaders, when does effective performance management mean hiring new staff? Here's what you need to know.
Recently, Facebook had a problem with harmful posts that violate the social giant's terms of service making their way onto the two billion strong network, causing problems for users and law enforcement alike. As noted by Tech Crunch, the organization plans to address the issue through a combination of technology and performance management spending — 3,000 people will be added to its operations team, joining 4,500 already in place. Even for a tech leader like Facebook, this is a big investment, but one it must make to address emerging media issues. But what happens when challenges aren't so easy to spot? How do finance leaders find the ideal staff/spend balance for their organization?
3 Universal Pain Points
While every business faces unique challenges there are universal pain points, which are problems or opportunities that suggest that hiring new staff is the ideal path to effective management.
1. Stressed-Out Staff
Is your staff showing signs of overwork? They may not come to managers directly, but keep an eye on sudden spikes in sick days and vacation time taken, along with an ear to the ground at the water cooler — if there's general dissatisfaction about working conditions, find out why. Often, the problem is tech-based: IT services aren't working as intended or there's frustration around access requirements. But if finance leaders can verify that staff have been putting in extra hours and still can't keep pace with demand, it's time to consider hiring new employees.
2. Evolving Expectations
As noted by the Sun Sentinel, fast-food giant McDonald's is adding 1,000 workers to its South Florida locations over the next month. Why? A significant shift in strategy. While the business is rolling out more touchscreen kiosks, options for curbside delivery and mobile app improvements, they're also looking to enhance customer service by adding table service and reducing total wait times. Much like Facebook, it's a two-prong approach: Technology to improve agility and more staff to put a human face on upcoming changes.
3. Pervasive Problems
Sometimes, problems happen. In the case of Facebook, its massive user base and global reach put the network at risk of handling and displaying inappropriate content. And while most finance leaders won't come up against something quite so far-reaching, social media remains a good example. If customer concerns aren't being addressed quickly enough, or if your website has become a haven for Internet "trolls," investment in more human oversight may be the ideal remedy.
The Real Costs of Performance Management
For finance experts, identifying more staff as the performance management solution leads to questions about initial, ongoing and long-term costs. First, consider training: How long does it take to train new employees, and how much assistance do they need from existing staff? What kind of instructional materials and equipment is required? How are new staff evaluated? Here, your biggest cost outlay is time: Time for new employees to get up to speed, current staff to monitor their performance and managers to evaluate their overall success.
Next is salary. Are you planning to offer competitive rates or beat the market to attract the best talent? What does your raise structure look like, and are you hiring hourly employees or opting for salary? Often, this is where the discussion of "in-house vs. outsourced" occurs — do you have enough work for a full-time employee over the long term, or is the organization better served by contract-based experts? Finally, consider the costs of retention. What benefits will you offer new hires, and how do they stack up against other organizations? Here, benchmarking data is essential; without a sense of what other firms are doing in the same space and why, you're at risk of losing great employees because they don't see enough value-added benefits in your workplace.
Bottom line? Sometimes, more staff is the best answer. For finance leaders to feel confident about this kind of spend, however, it's important to consider both the problem and the price — will new employees solve the issue, and what's the real cost of bringing new employees on board and keeping them satisfied? Armed with the right knowledge, performance management becomes a question of benefit tempered by balance for maximum return.