Recruiting and Hiring Tips – How to Hire The Best Employees

Summary

• HR should be focused on the company's wellbeing, not just making employees happy. It's important to find positive people that fit the culture.
• The company is the HR director's customer, not the employees. Consider the needs of the shareholders, customers, and employees equally.
• A company needs profit for growth and resilience, so HR decisions should contribute to financial health, not unnecessary payouts.
• Aim to get the most value for the lowest price in terms of human capital. It's about economic decisions, not comfort or fairness.
• Operations, including HR, should support core business drivers like marketing, sales, and product delivery. These areas drive top-line revenue and value exchange.
• Star employees, especially in sales, can be worth paying more due to their disproportionate value to the company’s revenue.
• HR provides value by adequately staffing the company, avoiding over-hiring or unnecessary roles, and recruiting top talent.
• Compensation adjustments should only be made to attract or retain talent when there's an actual problem.
• All employees must be seen as units of value and compensated based on their contributions to the bottom line.
• Thinking like an owner will help HR professionals make better decisions and progress in their roles, aligning with the company's vision and goals.

Video

How To Take Action

I would suggest that HR focuses on the well-being of the company as a whole. Look for employees who are not just happy, but who bring a positive attitude and fit the culture of the business. Remember, the company is your customer.

A good way of doing this is to only hire when necessary. Before creating a new role or filling a position, check if your current team can handle the work. This helps to save on unnecessary costs and keeps your team lean.

Think like an owner and make decisions that contribute to the financial health of the company. The employees must understand that they should be compensated based on the value they bring to the business, especially those in roles critical to revenue, like marketing and sales.

When thinking about compensation, only adjust it if you are having trouble attracting or retaining talent. If the current wages are attracting good employees and keeping them, then there's no need for a change.

Here's how you can implement some of these strategies:

1. Evaluate your current team for culture fit and contribution to company success.
2. Assess staffing needs – avoid over-hiring by confirming if the existing team can manage the workload.
3. Make sure operations support the core business drivers to boost efficiency and revenue.
4. Reward star employees who significantly contribute to the company’s revenue.
5. Review compensation practices only if you face problems in attracting or retaining key talent.

By following these steps, you’ll help create a workforce that is aligned with the company's vision and contributes to its resilience and growth.

Quotes by Alex Hormozi

"Your job is not to make employees happy. Human beings are responsible for making themselves happy"

– Alex Hormozi

"Your customer is the company."

– Alex Hormozi

"In order for a company to grow, it has to have profit."

– Alex Hormozi

"The company has three stakeholders: shareholders, customers, and employees."

– Alex Hormozi

"The point of the company is to buy value at the lowest possible price."

– Alex Hormozi

Full Transcript

i'll probably make a couple of podcasts um about my day yesterday but it was our quarterly meetup for our leadership and uh there was kind of you know there's a few kind of i don't want to say teaching moments but moments where i was kind of able to transfer some of my you know more updated beliefs about how a company should run um that they were like man i wish we'd record this like that would've been such a good podcast and so um i want to try and do my best and kind of cover some of those points with you here so you can almost be like a fly on the wall in some of those meetings and so the first one was about the role of hr now um before all of the entrepreneurs who are listening to this you know have their eyes glaze over this is probably the first podcast i've ever made about you know hr and human resources but i think it's incredibly important and it's not just about if you have an hr department so for many of you might only have a handful of employees or you're a manager at a company so if you know entrepreneurs if you have a management or series of managers or leaders in the company i think for them to understand um what the role of human resources and and investing in employees looks like i think it would be valuable so i'm gonna start with a story of hr gone wrong um and then kind of go from there and kind of dissect it as like a little mini case study uh or to the best of my ability and so um to expound upon the many lessons and failures that i have had uh in running the business um a few a year or two ago um we had an hr uh director and uh they i'll just tell you what happened so she had taken upon herself because she didn't have enough work i i know this but she doesn't know this it was because she didn't have enough work and she had overhired she had six people in her department six people in hr can you imagine um six we had a hundred person company like six people like it's just so many people uh so she had a lot of people and no one had any work to do and so um she took it upon herself to do a a salary analysis which is basically a study of how much everyone in the company um you know quote should be getting paid uh based on you know the role their experience what the market's playing and where they live right and um this took like 90 days for her to do this for every single person in the company and so she used up you know a lot of company resources three four five employees etc um for this period of time to do the study uh and the result of the study was that she had determined that you know i don't know 20 or 25 of the company um was being you know overpaid and then 20 or 25 percent of the company was being underpaid and then about 50 of the company was being paid you know appropriately and so the conclusion that she came to was well um i'm going to email everyone and just say uh if you know if if they were being overpaid they were going to stay there because you're not going to give people you know pay cuts if they're adequately paid they'll stay where they're at and if someone's being underpaid uh we'll email them and say hey you just got a raise congratulations right um and so this may have been the single stupidest thing i have ever seen someone do in my entire life um but that was the decision that was made and so um this was reported to me at a uh at a what do you call it a uh at our quarterly and this was actually her accomplishment for the quarter and i just i just remember just being so so bewildered befuddled dumbfounded um by the fact that that this person this human being had thought that this was a good use of company resources and so i'm going to break down the many reasons why this is not a good idea or this was a terrible thing and then kind of outline what i believe the the ideal role of hr is in a company so the reason this was terrible uh was that um so she literally used company resources probably a hundred thousand dollars of payroll resources to create this solution that then just paid out more money from the company um which is just my wallet it's just my bank account right and just paid out more money for no reason and did it in a way that anybody who got paid more had no explanation for why they were getting paid more and provide no value so she literally wasted money doing it wasted money for that point going forward in the company because after someone gets that email i can just be like oh by the way she was wrong sorry about that and then we're just gonna get keep you back where you were um and so i think the whole thing probably cost me like six hundred thousand dollars in profit right like i mean like more than she was going to get paid for years right and it just seemed like just a small thing like ah just the company right and so this is where you know if you're a manager in a bigger company or you direct rep you know if you report directly to the ceo or the owner you have to understand this right and so um yesterday at our quarterly uh our current hr director uh that drake to our director's not with us anymore uh was bringing up her uh she was kind of giving her uh position on what she believed uh her value to the company was and and i ended up kind of giving a talk about this in general and this so this is uh for my current hr director this is not about our conversation or anything like that but this is just in general for everyone so i wrote some notes down because i think it was really important and so uh one of the things that i hear a lot is my role is to make employees happy all right so i'm going to just hit eat piece by piece your job is not to make employees happy as an owner your job is not to make employees happy as a manager your job's not to make employees happy as an hr director your job is not to make employees happy employees job is to make employees happy human beings are responsible for making themselves happy there are people in auschwitz who wrote books about how they were happy and there are people in america living in the top one percent of earners of the whole world who are miserable and depressed all right your job is not to make people happy people will choose to be happy based on their own beliefs about their circumstances and what their thoughts are um independent from the actual things that are happening to them so first off it is not your responsibility it is your responsibility to try and find people who are going to have a positive inclination who are going to fit in with the culture so that we can keep an atmosphere that does retain and attract talent which is the next thing i'm going to get to but your job is not to make people happy all right number two one of the things i i heard um is that employees are my customer right if you're a manager or you're an hr director like well really you know everyone who's who works here is my customer incorrect that is not who your customer is your customer is the company all right and now i'm gonna be clear about this the company has three stakeholders you've got shareholders the people who own the company you've got uh customers the people who pay the company and then you've got employees the people who run the company all three stakeholders have to be considered now the reason this is an important delineation is that if you have a hr director who is like employees first then you have the type of stupid stupid decision that i just discussed in the very beginning which is literally just paying out profit for no value all right and this is an important point that i need to cover which kind of leads naturally to the next thing is that in order for a company to grow it has to have profit in order for it to weather storms that it does not see that are going to come in the future it needs to have profit to be able to reinvest in new product lines in legal defense in whatever could possibly happen and when you just choose to buy things for no value which is essentially what it is when you just overpay then you put your company in a bad position so let me explain so an investor looks at any kind of asset and a company the assets of the company are the humans right or the or the it's human capital it's the actual value they get from people especially if you're in a service business right and so you have the value is what you get and price is what you pay right and the goal i want to be very transparent about this of the company is to pay as little as possible for as the highest amount of value and that may make people uncomfortable but the point of all businesses is to give to get as much pride they want to have as big of a discrepancy as possible so if i'm an investor and i'm buying stocks i want to buy the most valuable company that i can for the least amount of money right it's a price to value discrepancy right and the bigger that discrepancy the better it is now if it's the reverse you're paying more for less value that is a bad deal it doesn't matter what you're paying it's a bad deal all right and so the reason that that first hr director made such a terrible decision was because she literally just chose to take it literally take our good deals and just say hey we're going to make bad deals now and all of our bad deals we're going to keep as bad deals right it just it just it just it just i it made no sense whatsoever and so that's that is what we're like that is the goal here right and finally when i was talking to our hr director about this she pushed back on this she was um not sorry not her but like you might have you might have an etc director you might have a manager who might push back on this idea and so i just went and the two different two different scenarios came up um that we were walking through and one of them is well you know uh you as the entrepreneur you know you always value the marketing the sales more than the rest of the company uh and i i could see that there was you know some being at odds with that right like i don't know if i agree with that um and i want to be 100 clear i do value marketing sales and product more than operations here's why not that long ago there was a period of time where i had mentors who were like you need to put operations first right this is part of scaling you have to delegate blah blah blah and so there was a period of time where i put operations on a pedestal and was like no guys we need to just do what operations wants us to do and to be clear for definition operations is everything that is non-core to the value of the company all right that is i.t that is hr that is finance that's legal uh all of those comprise operations all right and to be clear about what that means is it's everything that must happen to keep the company running but is not a core value driver for top lane revenue or for customers all right and so marketing brings revenue in product delivers value that is being exchanged for money that's fundamentally what a company does it's got stuff and it sells it right and as long as you're delivering the stuff or you're or you're um or you're selling the stuff that is being delivered those are core value to the company everything else absolutely must happen but um in general they're not the main value drivers now that being said there are ways that those other com those other components can provide value indirectly and that's what i'm going to cover in this because i think being an hr director or being a manager in a company and being in one of those roles if you're clear on that uh you will be more valuable to your owner and if you're interviewing for a position and you talk the way that i'm telling you right now to talk to an owner you will probably get the job and probably stay there because they will know that you understand what you're talking about so the example she said well um you know i feel like you care more about you know sales and marketing and i said yes i do and here's why um and by the way when i did that operational thing and put operations first the company started going down um and we started making less money and it was painful and horrible and i had to basically jump back in and be like i'm so sorry about that that was not a good idea we are keeping the value we provide and marketing and sales primary and operations is secondary to that it is a supporting role so if sales says hey we need contracts uh you know to be changed because this is the new offer or whatever then operations has to say all right we're gonna go figure that out right and that is the point the point is that operations should support and always enable sales marketing and product all right so she said well um i feel like you know you value you know like a star salesman um more than you value like a frontline uh customer service person uh and so she's like you know there was a there was a decision that you know this is this has come up you know a zillion times over the years it's like you know i i think you value these positions more and i always have to unequivocally say i do yes because people people like and i feel like this is i don't want to say an employee thing or it's just like they feel like it's like a bad word for me to be like no no i do care about more about marketing sales and product period period because they are the major drivers of value in the company all right and so um for example if you had chet holmes wrote about this in his book if you have a superstar sales person this is what i was talking about to the to the whole company i was like if you have a superstar sales person and that person you know is being paid quote above market right above market value there's two ways of seeing market value there's market value which is like what is the rest of the market paying for this right and then what am i getting in return for this specific person so for like if you have an all-star salesperson like you may have gone through 20 sales people to find an all-star sales person for your specific company in your specific product right because there are some sales people who who excel in let's say b2c transactional sales all right and there's some who who excel in you know a longer style b2b consultative sales and there are some sales people who excel in account management and kind of upselling and kind of like the farming and continuing to grow an account right those are all sales they're just different and so i could find a salesperson right but that person might not perfectly fit my company and i might not yield the same outcome and so if i have for example somebody who's selling really well and sells three you know sells more than three times uh you know it would take me two or three normal quote normal sales people to replace their production and this is common in most companies most people have multiple sales people there's one person who you know one or two people always like lead the pack disproportionately right and that uh that person right if in in in many conversations this is one of them it's like well if that person came up to you for example and said well i want a 20 pay raise or a 10 pay raise she was like i disagree with that and i was like i think that's stupid that you disagree with that i was like make the economic argument if we lose that person and then we lose half of our sales how can you tell me that was not worth ten percent more on their base salary so well i hadn't thought about like that i was like right you need to think like an owner right you gotta think like an owner what am i losing here right um and to the same degree the the corollary to that uh is like well i feel like you don't value customer service as much like what if we had an amazing customer service role this is kind of like the counter example right like well i feel i feel like you're willing to you know pay these people more than you are willing to pay these people and it's like yes i am because they provide more value and i was like okay i hear where you're coming from what if this person does an amazing job in customer service and i was like i get it so let's say this person disappears tomorrow how much less are we gonna make so probably not a lot i was like right and so if you wanted to you know come to me with a you know customer service person and say this person you know saves x percent of people per month and that results in this much money and the aggregate of adding a dollar per hour example to this person's role still doesn't compare to what everyone else on the team is saving which would be like what i would consider market right like if i just brought some in who's average and this person is way above average let's say this person saves you know 25 percent of the whole team saves is from this one person uh then i'd be like okay well there's a number value to that and uh you know we can incrementally add a certain amount uh that would mean it was worth keeping right uh and i was like but in this example we're talking about if this person stopped and just was gone i was like how much do you think that the company would make less she was like it probably wouldn't change the revenue and i was like right and for that reason that is how market value is established and so for everyone it's like this is the real world all right like i don't i don't know what the the harvard business review you know says about making happy employees and like all this you know whatever hoodoo um but in the real world you get you don't get a trophy all right not everyone's first not everyone makes the most amount of money you get paid based on the value that you provide and a good owner understands that right and so when we you know we were having these discussions um i think that uh it was it was good for our whole company to to understand and see like that's the point here like the point is to make a profit the point is to pay as little as possible for as much value as possible right and assess the value of the individual based on what they contribute to the bottom line right and so you know to wrap this up if you were you know for for for hr in general human resources it's like well then how do i provide value you provide value by one protecting the company at in all ways all right and the way that you do that is first when people come to you and say hey i want to hire so-and-so your first answer should probably be no give me a reason why your team is so overworked that they can't just work more right show me your hour-by-hour utilization that you have like and i'll tell you right now and i've said it in the past a lot of people don't work that hard all right and a lot of people will say that they are overworked because they literally do not understand what work is all the time i know this for a fact there's some of you listening to this right now who spend your entire day not working trying to work spend all day getting all done because you're in your head and you literally have an inability to focus that is not a company's fault that is your lack of ability in being disciplined and learning the skills of learning how to work like you have to get you just have to you have to get things done you know and so many people don't get much done in their whole day and then say hey i need help when it's really like they aren't actually overworked they actually just don't know how to work right and mind you this is not this is a lesson that i learned because i was younger once and i started working at a law firm as an intern and i remember a senior partner jokingly said to me she was like you don't even know what work is yet she's like you haven't even learned how to work and i and i was like offended um but then i saw how hard these people worked and lawyers worked there you know in in hardcore law firms they worked their asses off and i was like huh she's probably right right and i started observing the habits of people work more and how much more they got done so anyways um point is is that people will come and try and hire for help when there really isn't it's not necessary and so that does not protect the company it also doesn't protect the employees because if the company's at risk everyone's at risk right so you have to put the company first right um and so that's thinking like an owner so that's number one number two is that you have are active in recruiting the best talent all right because everyone knows that the value of the company is going to be based on the value of the people the who not the what right a good who will figure out the what and so really good hr is really good recruitment it's talent right it's finding the talent developing the talent retaining the talent now obviously not all that's going to fall under hr right recruiting absolutely right uh you know developing is going to be more underneath the departments and retaining is going to be a function of really the department heads and then the compensation packages right but the thing is is that i want to be clear here if you and and this is i'm going to wrap this back in the original story when you know the hr director the former hr director did this big salary analysis and she said hey this is our big success we're just paying people more and we got nothing back in value as a company right i was like why did we do this and that's the hard question that you know obviously wasn't able to answer i was like why did you did it because she had nothing to do right but that's actually why she did it but i was like what problem are we solving here what was the objective of this the answer there was none right because the only reason that you would want to move compensation is for one of two things either you cannot attract talent or you cannot retain talent so what i mean by that is like the only reason to really increase someone's pay if they are already working for you is because you value them enough that replacing them with someone else who has a comparable skill set would not the marginal difference would not be like if if the margin difference is huge right then you'd you'd be incentivized to retain them right and you as a company in this hypothetical example have a problem retaining employees we at gym launch do not have that problem we we have incredibly low attrition we fire people like crazy but people don't quit um and that's because we have a really high performance culture like people don't last you know what i mean like it's uh like sorry low performance don't last uh it's i i heard this from grant cardone but i really liked it it's like gym launch is a dangerous place to work like if you if you come in and you get on the train like you will learn more from me and us and running a company and learning how to grow things uh than ever before but uh you gotta perform like this is a winner's environment and if you are a winner you will love it here and if you are not a winner you will not i mean you won't be here very long right because the thing is is when you come if you've ever played on a high performance sports team your whole life at some point or any kind of team that's high performing that was a winning team usually there's a culture that if someone is new and comes in they either assimilate or reject it and the stronger that core team is is like this is how we do it right we wake up at five we go over our scripts we role play we do game day review from the day before on sales calls blah blah blah we you know etc and someone new is like ah man that's you guys are waking up early like i'm not really about that life like like the team will be like dude get this guy out of here like he's gonna take the team down and so having that culture uh allows you to spit people out quickly but it also allows you to retain now this is my point uh earlier which was uh why did this hr manager uh director make this call right and obviously it was because she wasn't thinking right um but there was no problem that she was trying to solve which is i was like this is this was a hard time for her i can imagine because it was in front of the entire company i was like do we have a problem attracting talent it's like no i was like okay so the pay that we are currently offering is we're having no issue finding talented people to work for these positions at these price points it's like no it's like okay do we have a major problem in attrition are we losing employees left and right two competitors who are paying more offering more or that we got head hunters picking off our people she's like no it's like then why did you just choose to spend 600 000 a year more of bottom line profit why and the answer she had none right and so it's making sure that we understand the why we're doing things right the point of the company is to buy value at the lowest possible price that is the point i don't care what anyone else says that is the point all right you're going to try and pay for the value as little as you can because that discrepancy is where the profit is right just being real that's where the profit is you need to have a discrepancy in order to have a profit so that the company can continue to run right that's what it is and so anywho uh i share the story at the beginning because that is you know one of a zillion failures you know in lessons that i've learned along the way in this in this game and um you know if you have a star employee i think a lot of times it is worth paying them more to keep them because you get like everyone knows if you have a star employee they're usually worth like three or four employees five employees in output right i'm probably worth a lot of employees in output in terms of top line revenue this business so i get disproportionately paid is it fair i think yes it is fair i think you should always be compensated based on the value they provide i think that's the ultimate fairness i don't think it's like oh he's a human i'm a human we should get paid the same thing that doesn't make sense to me all right so i want to make sure i hit all my points making employees happy is not your problem it is their problem it is their responsibility now you can equip them with tools and skills about mindset and whatnot but like ultimately the accountability of who needs to make who happy you need to make yourself happy a job is not supposed to make you happy because there are people who are endlessly happy in quote terrible jobs and they're people who have amazing jobs and kill themselves so it has nothing to do with you number one number two your employees are not your customers all right your company is always your customer number one because the company balances the priorities of everyone the shareholders the customers and the employees all right um i'm a quote middle man between the employees and ownership that is not true you protect the company all right these are false beliefs these are not true all right um you know undervaluing uh people who are not value pro uh you know top line value providing right they're not delivering on on on the value that we're selling or selling the value right that's those are fundamentally what a company does we sell value and then we deliver on on the promise that's it right and if you're not in one of those core things um unless you can make an argument for how you were directly providing value then you will probably get paid less and that's okay and that's okay right fundamentally thinking about all employees as units of value and ascribing a price to them right which is what you pay them and trying to always understand that you're always going to try and pay as little as you can for the most amount of value right that is and that's okay that's that that's okay that's the point right the only reason that you would pay more is if you have trouble attracting or retaining people if you're not having any issues or attracting or retaining people then you're paying fine right like you don't need to change the cop and so finally um that is what i will lead you with or end you uh or leave you with in this role of hr and my many many lessons along the way um i hope you enjoyed this and click subscribe and all of that good stuff but uh i have i have some passion with this because it's i've made these mistakes so many times and i've seen these mistakes made on my behalf and so if you're a manager if you're an hr director take this to heart you work for the company the company is your only customer and your responsibility is to protect the company just like everyone else's responsibilities to protect the company and if you can think like that you will think like an owner and you will move up in your company if you live in a la la land of i'm supposed to just buy bean bags and have you know and and keep employees happy um one you're going to waste money two you're not going to know what actually provides value in a business and three if you're in a different company what may happen if you don't have like a candid owner or whatever who wants to like talk real with you um they'll just kind of like put you in a corner right and then just be like oh yeah yeah yeah you bet yeah yeah go do that little initiative um but they won't actually see you as valuable uh because it means because you don't get the game like you don't get it you have to understand it um and then people like you'll you'll get into the in circle i'm trying to say this the right way you've probably had people in your life where you've got you've got your friends right um and you're like she gets it or he gets it right you talk to your friends like nah she gets it right she gets how this like how we see the world right the thing is that most business owners see the world the same way and that's why they are the owners of the business and that's why they started the business and that is probably how the business has grown and so it is in your best interest to align with the company overall because a good owner will put the company first not themselves because ultimately they the company feeds them the company is the goose the company is the is the is the is the beast that feeds everyone it is the thing that plows the field it is the mule that everyone is fed off of and so we have to keep the meal healthy and that is by having the discrepancies and making the hard conversations and making the hard calls and being real with you which is what i'm hopefully trying to do right now which is that is the point all right um so anywho uh i hope that was valuable for you i hope that made sense hopefully you don't have to to pay the many lessons uh and failures that i have and uh if you have a hr manager or a manager who you know hires and argues for compensation things like that send this to him i think it's valuable so anyways lots of love catch you soon [Music] [Music] [Applause] you