I recently heard a report on the U.S. economy which stated that although the Gross Domestic Product (GDP) made some gains, there was little increase in the total number of non-governmental jobs. The reason given was that due to the recession, many employers have learned how to get more production form current staffing without adding more people.
There is a great lesson here, and supports the mantra I’ve been chanting for years: the biggest waste in business is the mismanagement of labor. One of the greatest keys to profitability is managing labor wisely. This includes: 1) Taking time in the hiring process to hire the best people available, 2) Being aware of the tendencies of middle and lower managers to hire around their own shortcomings, 3) Establishing a company culture based on integrity, honesty, and respect, 4) Constantly measuring and assessing labor productivity vs. dollars spent, 6) Keeping the management structure as “flat” as possible, and 7) Saving money by pruning “deadwood,” especially in high-cost senior positions.