In Freakonomics You Need to Pay Your Employees A LOT More

Thinking different pays off. It’s a lesson that applies to many parts of business change.

Perseverance pays off, too, but perseverance can get in the way of thinking differently, so as business people we need to find, but also constantly be re-evaluating the line between staying the course and business change.

Last week, Stephen Dubner at Freakonomics laid something out that illustrates this — and that I’ve said for years.

You Aren’t Paying Your Employees Well Enough

In the zero-sum game that business often feels like, the idea of giving more money to your employees or contractors sounds crazy, right? You should pay your people only as much as is necessary, so you can keep more for yourself (or your shareholders)!

No.

As I pointed out in my comment at Freakonomics, this is one of those amazing “think different” issues that we can debate forever. Here’s my very real experience on the matter:

PC-VIP, our fixed-cost business computer support service for the SMB space was conceived from day one with exactly this thought in mind. We hire contractor/technicians at a rate that’s about 2.5 times what the typical independent computer geek makes working for himself.

Those folks are loyal. We don’t lose them to competitors, and they don’t try to steal the clients we assign them to.

The idea is very much like the becoming-more-common “unlimited vacation” policies that companies are starting to adopt. Old-school thinkers believe that to be a a recipe for the the abuse of benefits payers, but smart business people see the truth; people with unlimited vacation work to get their jobs done, not to satisfy a clock, AND tend to take less vacation in protection of their jobs. Oh, and there’s no legal/financial issue over unused vacation time.

That’s thinking different. That’s business change. And it works.

Perception? Reality? Foxconn overworking and underpaying employees in their Apple iPad sweat shop? Funny; their employees don’t see it that way. But manufacturing in China is different from your business in the USA; Foxconn’s business change strategy is different from yours.

Business Change is difficult; it can take a real genius to get you think different — and even more strength to actually do things differently. Case in point: Have you ever considered simply working for free?

Speaking of perseverance and business change, Google sees Answer Guy Central as ranking this high for search engine optimization on the phrase “business change” (and the use of both words without the specific phrasing and “business change”):

Want to know how perseverance got this little web site so highly ranked for such general and widely-used phrases? Contact me here.