Post by Valerie on Oct 7, 2014 13:37:11 GMT -8
Floating Lantern
Seattle's Anarch Free Press since 1986 • floatinglantern.bloodspot
Seattle's Anarch Free Press since 1986 • floatinglantern.bloodspot
Sunk Costs
10.7.2014
Sometimes, we’re fortunate enough to be able to participate in a conversation which sparks new investment into a core philosophy by challenging it. Two of my own were recently stress-tested: first, the belief that far too many of us are pessimists. Secondly, the knowledge that the only thing more fatal than pessimism is refusing to learn from hardship.
Stagnation and depression are often sad realities of Kindred existence, especially for those who find their actions or words crushed beneath the weight of social entropy. When you’re buying into a system whose boundaries are defined not only by meritorious work and communal wisdom but also by decrees and investments dedicated to preserving said decrees and investments, existential frustration is easy to come by. That frustration doesn’t need to be the end of the road, however. In circumstances where one is being manipulated for amusement or tested against a yardstick it is impossible to measure up to, the correct decision is not to turn inward away from the pain but to consider the benefit that is being provided by such a challenge.
As an example: let’s talk about an ordinary local business owner and let’s pretend that ordinary local business owner is you. There are certain conditions you must meet if you wish take on an employee, and they’re all are based on certain aspects of your company: you must pay the local minimum wage, any benefits mandated by the size or location of the business, workers’ compensation insurance as dictated by the particular industry, and so on. After all of these minimums have been met, you also decide it’s in your best interests to attract higher caliber of employee and keep them happier by providing additional compensation. You pay well above minimum wage, stock a coffee bar in the lunchroom, match a percentage of retirement savings contributions and provide a more plush health insurance plan.
Looking for someone to fill the new position, you write a want ad and place it on a couple of websites. Résumés start to roll in, so you review them all and settle on a few different people to interview. One candidate interviews particularly well. You’re impressed by examples of his work, he’s previously been employed by a number of industry leaders, and all of the references check out. So, naturally, you hire the guy.
… but he’s not all he’s been made out to be.
Sure, he dresses the part and talks a good game, but it becomes obvious that you’ve been taken for a ride. His first day after training, you realize that the software he claimed to be familiar with he was only familiar with three versions ago, but he does a passable job, so you let it slide at his insistence that he’s a quick study. A couple weeks after that he’s already showing up late. Your occasional audits of outbound company emails reveal a certain cold character to his communications, both with co-workers and account contacts. It’s obvious that morale, client relations, and the ever-ephemeral “company culture” are all being eroded by this slippery interloper. Understandably, you kick his ass to the curb. In the meantime, your failure enjoyed three sweet months of free espresso, bi-weekly massage appointments, and wasting company time on stacks upon stacks of new hire paperwork.
After a disappointment like this, you may be tempted to complain about how much money you’ve wasted. What was wasted, though? The cost of doing business is the cost of doing business - you would have had to pay a certain amount for wages and benefits anyway. The difference is in what you chose to provide above and beyond that minimum, and that money isn’t lost or stolen: it’s the price you paid for learning how to do things better next time.
You might decide to mention less about bonus perks of the position until new hires are completing orientation. Advertising job openings may be limited to more select industry-related websites, or ads may go out the window entirely in favor of word-of-mouth advertising or using headhunters. Perhaps you wait to grant certain benefits until after a 90-day probationary period and initial performance review. Or, you could just decide to keep operating as a sole proprietor because the cost-benefit of having less time but not having to jump through all those hoops again just works out like that. No matter what conclusions you reach, you can always come out smarter for having been burned.
It’s well-known that we should all be cautious of a free lunch. It’s much less common to consider the wisdom concealed in paying for something that made you sick.
If you’re not willing to take that to heart, you’ll find that there are many consultants available who are able to help you reduce these sunk costs.
For a fee, of course.
Valerie