Don't Hire Anyone Until You Watch This Video

what's going on everyone I've wasted tens of thousands of dollars maybe even hundreds on the exact problem that I'm going to solve in advance for you in this video it's on hiring when to hire how to hire some foundational Concepts behind hiring like Revenue per employee and a few others and generally I just want this to be your hiring end all Beall no [ __ ] for entrepreneurship or really whatever path you're going down so if that sounds like something you want to fix then stay tuned and let's get into it so I've appropriately named this document which is going to live on my blog why the vast majority of hires are pointless now I don't mean to do this because I want to be inflammatory or click baity although that obviously helps with engagement and that sort of [ __ ] uh but it's true the vast majority of hires that I have seen at seven and eight figure agencies are totally pointless they do basically nothing for the organization and realistically if the business owner had known a couple of the things that I'm about to show you in this video they probably would not have made that decision and so what this video is going to be is it's going to be a deep dive into hiring I'm not really going to look more look as much into the philosophies I'm just going to look at like how to actually make the right hiring decision uh we're going to learn a couple of like key metrics that you should be tracking maybe some simple structured management if this is your first time going into like a management type role or you know hiring people are having people work under you uh but do not hire somebody until you make it to the end of this video please because I work with tons of seven and eight fig companies cannot tell you how big of a bloat percentage of their payroll is just going straight into the trash right now okay great so why the vast majority of hires are pointless number one it's because you don't know your Revenue per employee RP is an extremely valuable three-letter acronym that I think more companies should personally spend some time looking into essentially it means if you are making a million dollar a year and you have five employees well then your RP is a million divided 5 equal 200,000 pretty simple when you explain it that way however that simple concept eludes probably 90% agency owners out there like if you think about it logically the purpose of a business is to produce Revenue right and the purpose of you hiring staff is to assist you in the generation of that Revenue I think some people at this point are probably going to be like oh well no you know the purpose of this guy is to like help maintain the back end or whatever but by maintaining the backend he's doing what for you well he's allowing you to continue producing revenue and potentially increase the rate at which you are producing Revenue so logically every time you hire somebody you should be adding to your bottom line now the issue is a lot of the way that hiring works today and has actually been done for a while but specifically today with like remote work and you being able to start a business by just going on up work and making a client account and like getting a team of 10 people under your belt is basically there's some problem in a business and so the business owner all of a sudden has a need and then instead of thinking logically through how to solve that need without hiring the very first thing the business owner will do is think oh I have a need I should hire somebody to take care of it for me this unfortunately is this organic approach basically is like backwards it's the exact opposite of what you should be doing and it lands staff in some really hot water uh when it comes time to like discuss performance and [ __ ] like that so you're not really doing anybody any favors uh by you know using that hiring structure a better way to hire is to anticipate needs in advance to know exactly how much utilization each staff member on your team currently has can currently take and when you need to hire somebody else and to make sure that every time that you hire you're hiring because it's the last thing that you have to do right not the very first thing that you should be doing it's like the last alternative option and you're like [ __ ] I guess I really got to hire for this so Revenue per employee the reason I bring it up is because it helps uh solve all of that just by thinking consciously through what your RP is at any given point in time are usually able to you know both just like Center your priorities and just understand okay like listen if I'm hiring an account manager for my business like how much money should that account manager realistically be making me right I'm not going to move forward until I figure that [ __ ] out so I've written some guidelines over here um they're pretty straightforward the first is if you don't know your RP or Revenue per employee calculate it now super simple to do you just take your annualized Revenue divided by your number of employees so I have a cute little sketch pad over here let's say um you know I'm making 80k per month what we do is we multiply that by 12 and my math ain't so good but I think 80 * 12 is 960k so 960k is our annualized revenue and let's say we have six staff members right so what we do is we divide 960k by six and then we end up with 160k each so our Revenue per employee is now 160k now what you can do with this RP figure is you can further use it in additional calculations to determine what's called like your your uh return on employee or like your Roi per employee for instance let's say that for

these six people you're spending an average of I don't know $60,000 a person so now if you divide 160 buy $60,000 what you'll get if you just forgive my shitty um math here is you'll get basically like a revenue or a return on employee of 2. 66 7 and we can just call this like return on employee or even just you know I just like to think of it as Roi and this is basically like your multiple for every dollar you spend hiring an employee you're going to get $266 back and it's a very simple way of just conceptualizing this the reason why I bring this up is because if you think about it like an Roi of 2. 67 X like in the grand scheme of things if we just be real with each other here that's a pretty low Roi there are probably a ton of other things that you could do right now in your business to turn $1 into more than $267 assuming that you put a little bit of time into it also keep in mind that this is a very time intense procedure hiring somebody you don't just like press a button online and then hiring is taken care of when you hire somebody you have to like train them you have to Mentor onboard them you have to have systems and structures in place you got to deal with risk with termination and that sort of [ __ ] realistically this 2. 67 if you think about it it's probably after you factor all that [ __ ] in less than 1. 5 so you know like there are just so many other things that deliver more than a 1. 5x Roi like if we're just sort of you know listing all the things in order uh 1. 5 or 1. 6x Roi is probably over here and then realistically there's probably an action you can take right now to get you at least a 3xr y maybe on like the sales and marketing side of things or I don't know building out some system or copying and pasting my automations what have you so just a really simple and hopefully straightforward way of just conceptualizing why hiring should be the last decision that you make um and why you should use Revenue per employee to sort of like ground yourself Center yourself and consciously just constantly just be thinking hey man like do I really need to hire somebody right now is hiring somebody really the best move so yeah that's number one now I also mentioned down here that there are a number of ways to hire today um you don't just hire employees like 30 40 50 years ago it's probably more common just to have a team of like six or seven employees that were salaried and in house and you PID them a certain amount every day today you have contractors Freelancers flexible temp workers there are a variety of other job types that make this a little more complicated especially for agencies uh at around the 78 figer mark because they typically employ a ton of cont contractors so what I'd recommend here is if you run an agency and you have a bunch of contractors you want to apply this to your business calculate Revenue per employee and revenue per contractor differently because they do different things most of the time and they sort of have different value propositions and different hiring Logistics right it's a lot easier to hire a contractor than it is to hire a full-time salaried employee 1099 versus W2 if you're in America or I think like T4 or t4a in Canada I don't know man I don't run a Canadian company any who um yeah so what that means is let's say a 15 contractors for that 960k calculate uh 960k divided by 15 to get your Revenue per contractor then if you have like the remaining six members do 960 x 6 to get your uh return on employee and then just keep track of those two figures you know adjacently I guess uh and make sure that you know okay like the Roe is probably going to be a little bit higher than the return on contractor just because I have so many more contractors you don't need to equivocate the two uh and then I mentioned you should have a rough understanding of the RP that you're hiring for before you actually hire for the position so like if you know that your account manager is going to cost $50,000 ask yourself how much money do I want this account manager to unlock for my business probably at least $200,000 generally speaking return on employees nowadays in 7 eight figure agencies with technology and stuff like that they can be anywhere from like three to like in many cases like six or seven depending on if you're augmenting their flow right obviously I'm going to recommend that you go for the six or seven as much as seemingly possible but yeah if you are paying somebody $50,000 just make sure that they're generating you like at least $200,000 if that makes sense uh in terms of like their Clan capacity and how much they can take on and all that sort of stuff okay great that's number one number two is clearly defined daily accountability this is more of a managerial thing than anything else and this is something that the vast majority of seven and eight figer agencies that I've seen experience really fast growth inevitably screw up on because when you're growing really fast as a Founder business owner entrepreneur whatever you want to call yourself your time's extremely limited and it becomes very difficult to break something if it's not really broken or try and fix yet the issue with staff is that they rarely chug along and be perfect and then all of a sudden break all at once it's more of like a slow inevitable decline in your margins and their performance and their ability to do things and their respect for you as well so in order to avoid that what you need to do is you need to clearly Define daily accountability practices it was Peter jker that said you can't improve what you don't measure and I keep that in mind basically anytime that I'm making a hiring decision for my own company or for one of the many companies that I do

operations and Consulting with the vast majority of the time when I enter a business their staff like at least a third of the staff members they do absolutely nothing when I mean when I say nothing I mean like in terms of their like actual deliverable output it's something that you could probably do in an hour and you're giving them a task for them to do like a whole month so you could literally like if you just wanted to say [ __ ] it I'm going to spend the next hour doing something you could usually accomplish that whole person's month of work in an hour which is obviously ridiculous and there's no need to be spending 5 10 or $15,000 on somebody to do something that you could do in an hour that's like a terrible misallocation of resources and obviously your first question is like well why the hell are they doing nothing ask them dude you got to hire somebody else but it's not like the business owner or HR manager whoever hired that person like didn't understand this you know the situation wasn't like that initially what ended up happening was at the very beginning of that person's tenure with your company they were doing great they were probably delivering you know 100 times that output but every month because you didn't have some structured accountability practice and basically because you didn't have check-ins and one-on ones and that sort of thing the person or the staff member you know because nobody likes doing freaking work or the vast majority of people don't like doing work every month that they don't get called on something they're just going to do a little less a little less I break it down a little more philosophically over here by saying human beings are animals and like all other animals a to economize our energy usage wherever possible we're no longer prowling the African Savannah hunting Predators or prey uh but don't think for a second that we're not eventually going to employ similar energy economization strategies in a business so maybe that's like a more palatable or nice way to say it but sort of like the pragmatic or what's the term sort of like sad way of looking at it is that people will just inevitably you know decline to whatever you tolerate and so in companies that don't have structured management practices don't have like good managers or just don't have some type of like HR scheme that at least checks in on their performance every once in a while you know they will inevitably do absolutely nothing unless they're checked in and called on it so yeah in order to avoid that I'd recommend you clearly Define daily accountability practices for uh your employees and contractors that are with you and maybe doing more than like 10 or 15 hours a week sort of deal they should be doing some type of daily accountability as well what I mean by this is basically every job position that you hire for like in order to do this in practice you just want to make sure that you have a set of daily duties if you're hiring somebody to do your ads for instance then make sure that every day they check in on your ads for x amount of time and then maybe on top of that they write new copy for an hour then on top of that maybe they review creatives from like the design team for at least an hour just make sure that there's some daily practice that person has to do every day Monday to Friday or whatever their work schedule is whenever they sign in to your business this is particularly important in remote work obviously if you're in an office it's a lot harder to do absolutely nothing and get away with it so it tends to happen less but the vast majority of you guys watching my videos probably run remote companies or are looking to start a remote company so yeah make sure that you just have some type of daily Duty the way I do this in practice is I will estimate how long it takes to do all of my tasks and then I'll just leave them another two or three hours on top of that so if I want them to work an 8 hour day you know I'm spending four or five hours on that task and then I'm leaving them a two three hour buffer so that you know if there are any overages or any complications with that task then they still have enough time to do it and then it also allows me to Loop them in on calls or get somebody involved in some other project to maybe make use of a slightly different skill set that sort of deal I find in practice this typically works the best now in order to make that matter right like daily Duties are one thing and they're important and that'll already take you very far but you need to implement some type of tracking for each of those duties and you need to tie to some type of deliverable what I mean by this is and it doesn't have to be complicated at all way too many people make this way too big of a deal if somebody is writing an article for you and their job to write articles just have them fill out a tiny form at the end of every day either telling you how many articles they wrote or linking you to the pieces that they wrote or just writing down how many words they wrote really simple [ __ ] right I mean this takes the staff member less than 5 Seconds to do at the end of their workday but that additional 5 Seconds helps save you realistically like 30% on that staff member it's such a high Roi move to just have a simple form that at the end of their workday they have to go to and then out and in my personal experience and recommendations I would keep this as simple as possible keep it to one or two questions at best oury is going to be dumb and then all you need to do is uh when you or your manager does a one-on-one if you guys are familiar is just like a sort of like a routine regular check-in you can do them maybe once a week bi-weekly you can do them once a month there are different implications depending on frequency but whatever your one-on-one frequency is it's basically just where you check in and see other person's doing if they need any help if they have any blockers uh when you're on

your one-on-one with that staff member with your direct essentially just compare their performance this period to last period that's all you have to do you don't even have to dive in there and start providing structured recommendations or working with them on some performance plan if you just show them that somebody is watching their output they'll usually perform a lot better again I think you can interpret this however you want as you constantly staring over their shoulder and snooping and being like I'm trying to squeeze every last drop of value out of you but in reality human beings are just animals just perform better when they know somebody else is around somebody else is listening so call it whatever you want I choose to interpret this positively but it is very important if maximizing performance is one of your goals okay and then the last thing I'm going to mention and I already touched on this earlier but it's before you hire make sure that you explore every alternative to hiring hire as a last resort not as a first Resort now I bring this up because most entrepreneurs hiring process is basically again I'm busy have some need I don't have time to fulfill that need [ __ ] I got to hire somebody realistically before you even get to the hiring stage in the year 2024 with the technology that we have and the software excuse me software platforms available to us and all the wonderful tool man it's like freaking gay space communism Utopia we're basically there already it's incredible just how many options that the average person has to fulfill or do a task without a human being involved make sure you explore all of them first I mean think about the return on investment here if you just set aside like 20 or 30 minutes and just think through how you can turn that task into something that can maybe be robotic process automated or maybe delegated to somebody that currently exists in your team or maybe restructured or whatever like 70% of the time you will be able to do that task and if you think about it like you were going to have to spend at least half an hour hiring for that role anyway I mean if you're hiring it's probably going to take you at least 20 minutes to whip up the job post right it's going to take anybody else in your team a couple hours to get that done you're going to have interviews structured processes you're going to have paperwork like why not just pretend that isn't going to happen and you're just not going to hire somebody and take that time towards solving the problem some other way instead sounds simpler than you know um you know it sounds simpler in theory than it really is in practice but that's what I'd recommend next time that a need arises place an artificial constraint on yourself and pretend that you can't hire a human being to solve it I joke here that it's because we're all extinct now sorry but you know really just think okay [ __ ] this is something a human being can't do for whatever reason I need to find another way to solve this problem now what this usually looks like in practice is it looks like you have some task like write an article or something and then your whole job is to break that down into a few subtasks and then try and farm out as much as you can of those subtasks to like a robot or chat gbt or some small micro software company or some [ __ ] like that um and by chunking it down you can usually just achieve much higher profitability if you do inevitably have to end up hiring for that role anyway I have an example here for you and this is a company that I'm currently working with it's an SEO agency their main task right now is to like produce articles for clients they do a ton of other stuff too of course but right now it's like hey we have 40 something clients right now we just need to be producing weekly articles um in order to fill up some q and the way that this company works is at the time of the writing they have three full-time writers and every time that they hit capacity and they need another you know they get a few more clients in or whatever they just hire another full-time writer now this is an extremely inefficient uh budget allocation uh by my recommendation and I've told you know the founder this and I've walked him through a couple of Alternatives and he's sort of leaning in that direction he thinks he's going to do it in the next few months but um you know as a present they still have their three full-time writers what happened about a month and a half ago two months ago is their editor who's a lovely woman but she got extremely overwhelmed with all the work that was falling on her plate and she told the business owner essentially hey you know I think what we need is we need somebody to help us rough draft pieces so that like we can do more editing than we actually do writing and it'll be a lot faster and it'll sort of un lock a bottleneck in our business which is good thinking uh but in this case it ended up being just a total an utter waste of time what ended up happening is the business owner decided okay sure I'm going to hire somebody by making that decision he basically destroyed or like deleted 5 hours of his productivity which we're going to call worth at least $300 an hour because he's an incredibly High earner and he's at least worth that to the business if not much more um he ended up hiring a novice part-time writer for about $2,500 a month and so you know if you conceptualize it that first month expense was 300 an hour time 5 hours of his time plus $2,500 basically 4K now if you know and he asked me about this and he asked what I would do and I was like don't do this right this is a terrible idea but as consultants go you know people don't always listen to our recommendations what ended up happening is he hired a person and then within a month he fired her because there was just no value really being produced no real uh difference to the business and definitely not something that was worth $4,000 that first month expense what he should have done is he should have taken hiring to be the last

resort for that problem when his chief editor came to him and said Hey listen I really think we need to hire somebody he shouldn't have taken her at face value and been like oh yeah you're right we should hire somebody he should have been like hm well let me think about this are there any ways to solve this problem without hiring and I think if he had just considered that problem statement for more than 5 10 or even 15 minutes he would have probably been able to list like five things he could have done without hiring now I sent him some variant of this uh what I just pasted in over here but he have done any one of these and it would have solved his problem for like anywhere from a quarter of the cost to maybe like one 40th of the cost I want to say I think if my math is correct um some of the solutions don't even cost anything but like you know let's think about it like do you really need to hire a rough draft writer no he could have instead of hiring somebody in house he could have looked for maybe a product ised agency somebody like me at one second copy or uh Joe Davies at F show or a variety of other simple outline or draft businesses there are hundreds this is a big industry by the way just look up like rough draft Outsource or something like that and you'll find that tons of these businesses can produce rough drafts who are meant to be rough they're not perfect of course but they can do it for about $15 an article you know if you consider that versus the $4,000 that he spent in the first month for $4,000 you could have produced 266 rough drafts right uh for the same first month expenses that hire took except the turnaround time would have been a lot shorter because you got a whole team working on it now uh it could have been higher quality who knows might have been lower quality but it also could have been higher quality you wouldn't had to train you wouldn't have to hire interview you wouldn't have to do any of that shed and there would be no liability now in this case the team only produces about 60 articles per month so realistically you can just cut that $44,000 month expense into four and then you know realistically they could have solved all of their problems uh for a cost of $1,000 a month if they just outsourc this instead of looked for an in-house hire so it's just one solution I thought about this for maybe 20 minutes and I came up with another three that I consider pretty good as well um what I did at one second copy once to solve this very particular exact same problem was I just restructured my team uh and I turned a few of them from like writer editors into just rough draft writers and then I just had them do the rough drafts you'll think you'd think that by transforming some of our editing productivity or whatever you want to call it utilization um the total output of the company would go down but no it turns out by turning some of our writers into or editors into rough draft writers it actually allowed us to widen a big bottleneck in our business and then we were able to produce like 10 or 15 maybe even 20% more output with literally the exact same resources and if you consider that like our actual internal cost for that was Z it was just you know telling people hey we're going to pay you the same but we want you to do something slightly different because you know we have a need right now so that's why I did a one second copy ended up being about 20% more productive for $ Z additional spend you could have also used an outline platform something like Surfer SEO maybe hr's one of these SEO tools out there these software platforms that can automatically create outlines for you using keywords that might have cost you 100 bucks a month you could also have obviously experimented with chat GPT maybe just train your team a little bit better on how to use chat gbt to generate an outline so that in an hour if you consider like an hour of resource utilization the first 10 minutes is spent on chat gbt making a wonderful outline the other 50 minutes is spent actually doing the editing like a 1 to six breakdown instead of actually like hiring a specific person to do that work so the point that I'm making is by elucidating and enumerating all these points you just don't need to hire in the vast majority of cases and usually there is a much better outcome or choice really if you don't hire instead of hiring being your first call anytime you're facing a problem try and make it your last call and I guarantee you your company's going to be substantially more effective and not only is it going to be more effective uh sorry cost effective cost effective it's also going to be leaner but um faster because when you have fewer people in a company information disseminates quicker you have less managerial overhead you need to Loop fewer people into the meeting you have fewer opportunities for lowest denominators to basically bottleneck your flow the last thing that I want to show you guys is a little graphic here that I just found from the lovely uh Jason low I hope I'm saying his name right on Twitter and essentially it is a breakdown of how much the revenue per employee has changed over the course of the last 30 years this is sort of going backwards instead of Revenue per employee it's workers needed at S& P 500 companies to generate $1 million in Revenue what you see is back in like the 1990s or so you needed about seven workers to generate 1 million in Revenue so if you just go 1 million and divide that by seven that means the average revenue per employee was about 142,000 in the year 1995 it was about 200,000 in the year 2000 it was 250,000 in the year 2010 it was already about 400,000 and the year 2020 it's over 500,000 right or 2024 it's over 500,000 so what I mean to say here is the rest of the world is changing especially at these big S& P 500 companies where this was mathematically modeled but the world is changing if you don't improve your own hiring practices you're going to get left behind and with the Advent of flexible artificial intelligence stuff

like GPT 4 and CLA and maybe gpt7 by the time you watch this video Revenue per employee is going to get to the point where realistically you might be able to have like a billion dooll business with you and like one other dude right so just make sure you're on top of it make sure you understand um logically and practically what to do next time you want to hire somebody and you'll be okay awesome hope you guys enjoyed that video I wish I had a time machine so I can capsule this and then send it back to myself 3 years ago probably would have saved at least 50k maybe more than $100,000 now that I'm thinking about it but say love uh you live and you learn that's why I can produce this video today if you guys have any questions or like that leave a comment down below more than happy to address them as per usual otherwise like subscribe and I'll see you all on the next video thanks so much