Experienced vs. cheap workers

I recently attended a monthly roundtable with a local business group I’ve been involved with since last September. The purpose is to gather a diverse group of business people to exchange ideas, discuss workplace issues, offer recommendations and generally support the endeavors of each participant. 

At our last meeting, one member noted that, in light of the volatile economy and the need to operate as inexpensively as possible, his company and many others have resorted to hiring less-experienced and lower-cost employees, trimming the more-experienced employees with higher salaries. While this technique is understandable, I’ve been taking the opposite approach at my shop—not consciously, which makes this realization interesting—but because of a critical need for skill and experience. 

While I was sitting there pondering the discussion, it all clicked. I was “zagging” when most were “zigging.” My initial concern was that I wasn’t following the logical pattern of these successful business people and could be jeopardizing my shop’s survivability. When the group asked for my input, I informed them that I was taking a different approach—seeking experienced machinists, operators and others worthy of a higher salary. Whoa! Does this make sense in a tough economy? 

In the past, our shop had hired some younger, inexperienced candidates who excelled and provided a great bang for the buck. That’s a cool accomplishment, but, unfortunately, it’s the exception. Ultimately, workers with more experience—and higher salaries—have proven to be the better choice. 

But does a higher payroll really cost more? Many times, it’s not even close. My customers have more confidence working with experienced rather than inexperienced staffers. Sure, experienced employees may command higher salaries and more benefits, but they’re usually more productive, as well as more mature. Not to mention the boost to shop credibility when your crack staff is on the job.

My experience has shown that paying above-average wages generates appreciation and confidence in management. We even pay for health insurance so employees can keep more money in their pockets. In a way, you can equate it to quality over quantity.

This doesn’t mean a shop shouldn’t trim an inflated payroll. Obviously, there are circumstances that justify cuts. Last year, I terminated one of my top-paid machinists because of personal issues that distracted him from work and his overly conservative machining philosophy. He was talented, but lacked self-confidence and was costly. Or, perhaps a longtime and well-paid employee no longer has the mental and physical stamina to keep up and becomes a financial drain. A more drastic scenario involves removing most of the staff and literally doing the majority of the work yourself just to keep the company afloat. 

These things can happen, but don’t assume experienced, well-paid employees will cost you more money in the long run. Whatever a company saves in lower salaries and reduced benefits could be offset by lower productivity and attendance, increased training expense, and the increased potential for rejected parts, among many other factors.

When my roundtable meeting wrapped up, I realized I was the only one recruiting the higher-paid, experienced workers and leaving the less-experienced help for someone else. A few participants nodded their heads as though it made sense, and one expressed his appreciation to me for having the guts to do it. I thanked him and informed him that successful machining requires serious skills and a high level of maturity. And the resulting peace of mind is priceless to a shop owner or manager. I told him that my hiring approach wasn’t gutsy, but a matter of necessity.