Let’s take a short jump back in time to the middle of April. If you recall those very dark days, the following things seemed all but inevitable. First, the United States—and most likely the entire world—was going to go through a recession this year. Second, we were going to be stuck in recommended quarantine for an unknown period of time. Third, you were going to kick yourself for not buying Zoom stock six months earlier.
Today, two of those three are still certain. You’ve been stuck in your house for a couple months. And you’re certainly kicking yourself for not buying Zoom stock six months ago. The recession certainty? That’s been pulled away. The President of the Chicago Federal Reserve, Charles Evans, even said recently that it is not out of the question that the US will return to a growth economy in Q3 of this year. So, where does that leave business owners?
Many owners, especially those in middle markets and who aren’t buoyed by publicly held stock, have already had to make extremely difficult and stressful decisions regarding their teams. Many have furloughed employees for an unknown period of time, others have been forced into large layoffs. This isn’t business owner greed—this is trying to save as many employees and as much of their business as possible while customer after customer pulls contracts, misses invoices, and simply loses the ability to spend money. As the world begins to open back up, hopefully this action starts to reverse itself, and economic activity returns to a somewhat normal cadence. The question then becomes: as a business owner or department director, how do you effectively staff for increased demand without getting over your skis?
Think about this like a weight loss program.
It’s perhaps a bit of a crude analogy, but when you make the decision to begin a nutrition plan and start a weight loss program, chances are you didn’t come to that decision from a place where you were already making healthy choices. You had some extra fluff around your midline, and as comfortable as it was to keep that there, you knew in the long run it had to go. It’s likely the same could be said for your staff size.
Business around the world was booming. The United States was in an eleven-year bull market. Your business was growing at a consistent clip, and you saw ever-increasing demand. This allowed you to make some hiring decisions to get ahead of that demand and be prepared to capitalize on this growth. Just like you made the justification for that skillet cookie for dessert, simply because you could.
Over time, those decisions added up—in pounds or excess expenses—and while it is never fun to cut weight, COVID’s effect of an economic downturn forced us all to remove some of that fluff. You recognized your mistakes, and had to make some extremely uncomfortable decisions. Letting people go sucks, plain and simple. You don’t want to go through that again, so you don’t want to add back on the excess headcount from before. But, you also want to capitalize on demand as the economy gathers steam in the coming months and years. Plus, there’s talent on the market. What do you do?
Which resources got results in the past?
They say eighty percent of your results come from just twenty percent of your work. This is called the Pareto Principle and, somewhat hilariously, comes from a 19th-century Italian philanthropist who noticed a strange occurrence in his pea garden. Twenty percent of the pea pods generated eighty percent of the yield. After studying various industries, he found a similar story in these companies’ production as well. Over time, it’s been found that this phenomenon exists in almost every professional and personal environment across the board. It may not always be exactly an 80/20 split, but it is very close.
This means regardless of how unique your business environment is, it is likely that twenty percent of your inputs are generating eighty percent of your output. What is your twenty percent? Did you have to let some of those twenty percent go during the downturn? Identify these areas very clearly and get a plan in place to nurture and develop the part of your business that drives the most results.
The other eighty percent, that’s only producing twenty percent of the output? This is the portion of the business that needs real consideration. If it allows you to continue competing in your field, then you will have to maintain it. For example, it is highly likely that Porsche does not sell a great number of 911 Turbo S models, which start at $203,000—but this level of engineering showcases their extreme quality and allows them to compete with the other high-end luxury car manufacturers such as Aston Martin. It also makes schmucks like me want to align myself with their brand so it becomes aspirational. That 911 Turbo S may not generate 80 percent of the output, but it’s important for the overall makeup of their business nonetheless.
From this point, you can paint a clearer picture of what resources your business needs—both to survive and to thrive.
Construct your team and process for results.
You’ve generated your list based on the Pareto Principle, and you’ve figured out the key elements to your business or department. Now consider how to make those a reality. Remember, this is a chance to retool your resources to meet your needs both now and in the future. You don’t have to jump right back into your old structure. In fact, your old structure is most likely what failed you before, so it’s best to take a hard look at it before repeating the same mistakes. After all, Einstein taught us that doing the same thing repeatedly and expecting different results is the definition of insanity, and people think he was pretty smart.
Contract work to freelancers
This is the most flexible and simplest option to retool your team as needed. Freelancers bring with them a host of experience, they don’t cost you payroll taxes or benefits, and they can be ramped up and down as work demands. Additionally, since you’re looking for a particular skill, this option also often allows you to find someone who is particularly attuned to your industry or profession.
On the flip side, that niche quality and individual nature can sometimes hamstring your ability to grow with the freelancer. They are still just a one-person show and unless you find a true unicorn (which is really, really hard to do) you’re going to be hiring more than one freelancer to fulfill your needs. This, in turn, requires you to manage multiple outside relationships, and that is a job in and of itself. Additionally, freelancers will need to be onboarded and taught about the do’s and don’ts of your team and organization—and you’ll have to do that for each individual freelancer you bring on board.
This is not ideal for retooling an entire department over the long term, but freelancers can be excellent extensions of your current team and provide needed depth on your bench when work ramps up. It’s all about balancing cost savings with scalability and available time.
Start a hiring process
On the other end of the spectrum, you can work on filling the roles you had to let go and still need to support by going through a hiring process. There are, of course, some immediate downsides to this, chief among them being time. Hiring full-time employees is often a very challenging process. You are going to be investing a lot of energy, resources, and money into these individuals, and you want to get it right. Making it tougher is the sheer amount of applications you’ll be weeding through to find the right people for your organization. It helps if you have a strong employer brand, but that’s a story for another day.
At the same time, bringing on official team members brings with it all the cultural benefits and long-term commitment we know and love. This person will be solely committed to your organization; they won’t be balancing time between the project for your team and their other contractual obligations elsewhere. Additionally, as you begin re-integrating into your physical office, this person can help with company culture and recreating that feeling of being on a team which so many have missed during the COVID-19 period.
Just like with freelancers, there are pros and cons to hiring up a staff. If you are uncertain about the overall future of your business, you could be back in the same place you were at the start of COVID—having to make tough decisions about who you can keep on the team. Additionally, finding the talent you need can be difficult, and it can be expensive. On the other hand, finding that talent and having them completely committed to you and your team is a real asset in the long run.
Outsourcing your department
This is where a marketing consultancy like Element Three comes in. You’re almost certainly expecting a sales pitch about why we’d be the right choice, but there are pros and cons here just like any other option. Outsourcing a major business function like marketing is a hard decision, and one that shouldn’t be taken lightly. For example, we work most effectively when there is at least one person on your team who is responsible for marketing. This ensures consistent and quick communication, and helps with the appropriate division of labor.
Outsourcing your marketing efforts has its challenges. For one, any marketing partner is going to need to spend some time really getting to understand your business; what is your model, who is your customer, how do orders come in, what is the sales process like, where do you envision the company moving in the future? All of these and many, many more questions make up a typical business download. This takes time, and time takes money. Additionally, marketing consultancies require relationship management, much like freelancers—although it is likely that you can hire one marketing partner to handle all of your efforts, rather than having to hire multiple freelancers.
The positives really come from scalability and cost. When you outsource to a full-service marketing partner, you’ve just pressed the easy button on staffing your team. It is their responsibility to ensure the right skills are on the job—and let’s be honest, you’re firing them if they fail to live up to that promise. Additionally, while marketing consultancies are not typically a cheap option, you will have access to some of the most talented and experienced resources around at less cost than hiring those people directly. You have payroll taxes, benefits, and performance compensation to thank for that one.
There’s no one right answer.
As much as it would make my life very, very easy if the best answer for every situation was to hire a marketing consultancy, the fact of the matter is not everyone needs that solution. Some need to find full-time employees for the team. Others would do well to use freelancers. If you’re looking for guidance on this, we put together a guide to choosing a marketing partner. It’ll walk you through the history of agencies, whether you need a freelancer, agency, or consultancy, and how to choose the right one for you.
Whatever you choose, it will serve you well to follow Winston Churchill’s advice, and to “never let a good crisis go to waste.”
