There are certain topics that I think are absolutely critical to scaling an organization – and this is definitely one of them. When it’s time to bring new talent onto your team, do you view the new position as an “expense” (something that has a fixed cost), or as an opportunity packed with potential for transformative growth? Without a doubt, everyone I have met that has built and scaled a successful company or nonprofit has had the latter view. But 80% of the leaders and hiring teams I work with utilize the first view in real practice. Let me explain what I mean.

Assets or Expenses?

In the realm of hiring, leaders often align with one of two predominant mindsets. First up is the “Expense Perspective”. This traditional viewpoint treats salaries as fixed expenses—necessary costs that are carefully budgeted and controlled. This mindset is like viewing each role within your organization as a cog in a well-oiled machine; essential, but static. While this can lead to predictability in financial planning, it often overlooks the dynamic potential each new hire brings to the table.  

Conversely, there’s the “Asset Perspective”. Leaders who adopt this approach see each new hire as a pivotal investment, akin to acquiring a valuable piece of technology that promises to enhance efficiency or open new revenue streams. This perspective encourages looking at candidates not just for their ability to fit into an existing salary bracket but for their potential to bring about a high return on investment.  

A Tale of Two Candidates 

Consider a scenario where you’re hiring a new Development Director. You post the position and set a salary range of $110K with a fundraising goal of $500K. Candidate A fits snugly within your predefined budget, and you are confident they will meet the expected fundraising target. Then there’s Candidate B, whose salary requirements are closer to $150K, well above the set range, but they bring connections and a strategy that could potentially double your fundraising efforts to $1 million. Many of you may say this is an obvious choice – get the second candidate! But more than 80% of the hiring managers I work with wouldn’t even consider that option because it is well outside the set budget. Once you are working inside the confines of an organization, it is often difficult to think entrepreneurially.

Salespeople in a Recession
 

I once worked with an owner who swore by the Asset Perspective. When the 2008-2011 recession hit, his industry was forecasted to drop by 15-30%. Seeing this coming, most companies started laying off their sales teams along with other staff, cutting costs to help bear the brunt of the recession. 

This particular owner saw that even though the “market” as a whole was going to drop, there was still plenty of business for his company to stay flat if he pulled over clients from others. So, he did the opposite of his competitors – he hired more salespeople, knowing that the return on investment would be worth it. And his strategy paid off – his business dropped only a few percent, and he was able to maintain his entire team through the recession, putting them in a great place to grow as the market recovered.