In the 1954 film “The Wages of Fear,” several men jump at the chance to earn $2,000 each driving a shipment of nitroglycerin 300 miles over rough terrain to extinguish an oil inferno. It’s amazing what people will do for a good paycheck.
Carey Smith | Founding Contrarian
You might get the impression that I enjoy ragging on people in business and government who do stupid things — and you’d be right. By the time you’re of a certain age, it’s hard to see people repeatedly make the same mistakes and not want to point them out.
The latest example is the bonehead whose bright idea is a new training program to ease the labor shortage. Apparently, there’s concern that the new infrastructure bill will create a slew of construction jobs, and there won’t be enough people to fill them. So why not pour money into a new training program, because boy-oh-boy, that could get all kinds of people trained who’ve never held a hammer! We could fill jobs and promote diversity in one fell swoop!
Here’s how you promote diversity and at the same time encourage people to work in fields they never have before, whether it’s construction, or insurance, or delivering the mail: You make it worth their while. Dangle a generous paycheck in front of anyone, and it’s amazing the results you’ll get. It’s a simple solution, and yet it’s amazing how few employers are willing to recognize it.
That’s why it was so refreshing to read recently about Spanx CEO Sara Blakely’s generous gift to her employees: She gave all of them two first-class airline tickets to anywhere in the world and $10,000 in spending money. Sure, it was to mark the sale of her company, or the major part of it, to a private equity firm. Nevertheless, most founders would take all the credit, pocket all the proceeds and run laughing all the way to their financial adviser.
I’ve long admired how Blakely runs her company — inventing a product to solve a problem she herself had and using her own money — a whopping $5,000 — to launch it; picking a memorable name and logo and then marketing it herself; and growing the company without outside investors for 20 years. It’s a textbook example of bootstrapping very similar to the way I grew Big Ass Fans. And when she finally decided to sell, she made sure to reward her employees.
Why can’t more CEOs be like that? Why is it that pinching pennies on employees is still the standard practice, when from what I can tell, it never gets anybody anything but disgruntled workers ready to jump ship at the first better-paying opportunity. There’s no more overused expression than “bang for your buck,” and yet so many CFOs seem unable to recognize that paying employees generously delivers so much more in return. At the fan company, we paid well and gave generously both in bonuses and at our year-end holiday bashes; in return, we had extremely loyal employees. And when I sold the company, I paid them millions to recognize the time and hard work they’d put in.
So why don’t we all stop suggesting new government training programs or better hiring software, and stop blaming the pandemic or the crazy values of Gen Z for all the unfilled job positions. If more employers were willing to simply reach for their wallets and lead the way in compensation, they’d be amazed at the almighty dollar’s power to change minds and deliver able-bodied workers.