What’s Your Highest Paid Employee?

Summary

• When considering investing in a company, I noticed a red flag when I learned that their highest-paid employee made only $65,000 a year.
• I believe that not investing enough in talent signals potential issues within a company.
• It's concerning when a business owner thinks that a salary of $65,000 a year is high for someone who is running the entire operation.
• My approach includes assessing whether there is a talent deficit in a company and if we need to adjust salaries to attract and retain the right people.
• Simply having great profit margins isn't enough; it's essential to ensure that employees are not just low-paid "doers," but are highly skilled and appropriately compensated.

Video

How To Take Action

I would suggest first looking at your team to see if you're paying them enough. If your top employees are running the whole show, they should be paid more than just okay money. You want people who are more than "doers," they need to have good skills and be worth their salary.

A good way of doing this is by seeing if your paychecks match the talent you need. Ask yourself, are you giving enough money to get smart, hardworking people? You want the best because they help your business grow.

Also, think about if you're being fair to your workers. If someone is doing a big job, they should get a big paycheck. If not, it could be a warning sign for your business.

If your profit is super good, that's cool, but don't let it be because you're cheap on salaries. Paying more for better people is worth it. They'll bring you new ideas and do a better job.

To sum up, make sure you're willing to invest in top-notch people. This might mean paying more than you're used to, but it's key for growing your business. Remember, cheap can end up being super pricey in the long run if your company can't get better.

Quotes by Leila Hormozi

"What's your highest paid employee and then he said oh my guy that runs the whole thing you know 65,000 a year"

– Leila Hormozi

"Big red flag right there like one you're not willing to invest in Talent"

– Leila Hormozi

"The fact that you think that that is like a high paid job is frightening to me"

– Leila Hormozi

"If we were to invest in that company a huge piece is also do they have a talent deficit"

– Leila Hormozi

"It's definitely not going to grow so it's like a lot of people they're like my margins are insane"

– Leila Hormozi

Full Transcript

I had this company that we were looking at a couple of weeks ago and I said what's your highest paid employee and then he said oh my guy that runs the whole thing you know 65,000 a year you not and so I was just like big red flag right there like one you're not willing to invest in Talent two the fact that you think that that is like a high paid job is frightening to me if we were to invest in that company a huge piece is also do they have a talent deficit are we going to have to rightsize how much they're paying people the kind of people in there because we know that maybe that can stay as is and possibly not die for a year to but it's definitely not going to grow so it's like a lot of people they're like my margins are insane I'm like right because you're running everything with like a bunch of like doers who you pay nothing