Posted by Larry Brantley on April 02, 2009
Everyone in the business world is ready to pounce, once they know it is safe, on fast growth stocks and other investments. We all want our money to grow and work for us and not decline like so many have seen over the last year. I have a hot tip ( hopefully not seen as insider trading) for anyone willing to step out and make the commitment.
The investment is known as human capital, your company’s employees. There is no other asset a firm can have that will have a greater impact on their business than the people who actually do the work. We sometimes forget that fact. Solid employees who are committed, well-trained, and have a solid work ethic drive your profits up and have a positive effect on the results of others around them. Just look at some examples I’ve seen over the years. Broadcast.com, a small video conferencing company in the 90s, had a great idea that was new to the business world and the technology was literally being developed as they were marketing the service. Those people worked LONG hours in the Deep Ellum area of Dallas with no guarantee that anyone would buy this new service on the “Internet”. In a short amount of time, Mark Cuban (now know as one of the richest men in America and the owner of the Dallas Mavericks) converted their hard work and commitment to a gold mine for all of those who used their talents to help the company succeed. Not only did he profit as an owner, but all individuals involved profited when their company was purchased. Other firms that come to mind where the employees had a direct impact on the company success are Microsoft, Apple, Google and The Container Store. In each case people who started in a role of just bringing their individual talents to the table helped the company succeed.
Another advantage to investors today is cost/value. The talent available today is 20-40% less in cost than just 3 years ago. A web designer with 5 years experience in 2006 could expect to make $70-80k a year in salary. Today, someone with the same experience and skills will make $50-70k. Many firms in order to keep their staff in place during this economic turmoil, have reduced salaries across the board 10-20% on average in order to avoid additional layoffs. As an investor that is an immediate savings to you in securing new hires.
As with any investments, there are risks, namely making sure your hires are solid and meet the skills you require. A bad hire or an under-achieving hire can be costly in salary, training and lost productivity. That is why a solid recruiting partner, like Paladin, not only helps make strong investments in your human capital, but we also share in the coaching, training and ongoing assessment in your potential growth and challenges.
Any investor who ignores their human capital portfolio is destined to see losses. Those who focus on hitting now while the costs are down and the resources are huge have a tremendous opportunity of significant growth and longterm security. Just a thought for you investors to ponder.