How do I decide if I should hire a business manager who expects a salary package much higher than our current employees without creating issues?

I own a specialized industrial equipment manufacturing company which I started 20+ years ago and has done quite well. Our sales and growth have stagnated over the past few years primarily which I think is due to : #1. Being 'home-grown', we have lacked professional marketing/sales and have primarily depended on referrals, online (Google etc.) marketing & a few print ads in trade magazines. #2. Over the past few years I have spent lesser and lesser time at the company with zero efforts towards new marketing channels etc. Recently we were approached by a very talented individual who operates (CEO) a similar but unrelated niche manufacturing company. I believe he could take our company to the next level as he has done at his existing company. Of course no guarantees but I am willing to set aside the considerable cost associated with this endeavor for a year or longer, assuming I see some ROI within a year. Which brings me the to the question above!


I'll divide your question into 2 questions, because I am not sure which one you're really asking :-)
1. Should I hire him despite the costs involved? You seem to already agree to this, based on what you wrote ("I am willing to set aside...assuming I see some ROI...").
2. How to I justify his high salary to other employees?
A few options:
a. You don't tell them.
b. The CEO's compensation can be structured in a way that his 'salary' isn't that high (and this is what the other employees will see - so no problems), and he gets a large bonus based on results (which could be measured within 6 months and then 12 months). This is also better for you seeing that you don't know how good is will be. Additionally, if he is so confident he can do the job, he shouldn't object to that structure.
c. Make it clear to your employees, that if he manages to generate more income for the company, they too will benefit from it (end of the year bonus/increased salaries/holiday gifts?).
d. the tough option: tell them that if you don't make some hard choices, there won't be a company for them to work at down the line (due to the yearly decrease in profits)
It's your company (which you seem to have managed successfully), so I am sure that you know what would work best with your employees.
I'm happy to help you construct the employment contract with the potential adviser.
Good luck
p.s.: let me know how things turned out. I'm curious :-)

Answered 5 years ago

If you choose to hire the Business Manager based on clear business benefit, then the next task to is mitigate the risk of the other employees acting out due to the change.
a. Is it possible to keep the compensation and contract details private?
b. If other employees will be aware of compensation due to the company size or you choosing to tell them, then you may want to take steps to address the issue by first differentiating the role. (e.g. How different is this role from other current roles at the company? What is this person responsible for compared to others? What are the Key Performance Indicators for this role and what is the penalty for not meeting them?)

2. Change Management
a. Change in general can cause people stress. If bringing someone new in will cause issues with current employees, it is important to both try to understand what those challenges may be as well as know what you find as an acceptable loss if people choose to leave.
b. There are many Change Management techniques that can be implemented to help with smooth transitions.

Feel free to give me a call if you would like to discuss in more detail.

Answered 5 years ago

My suggestion is to structure his role to be clearer more senior in terms of responsibility so it is not a direct comparison of unequal pay for the work (if confidential salary details leak through employee discussion). Also, if employees make a decision to exit based on salary alone, an organization has bigger issues to grapple with. Employees decide to stay more for culture and leadership quality than any other factor. So, if this fella is as good as you think he is, think it will be the best investment for everybody at the company who can benefit from his coaching and mentorship.

Answered 5 years ago


Hire them.

Keep this person's salary private.

Answered 5 years ago

I had in my business life several cases when my supervisor being neglectful, caused my inferiors to know my salary. It was more than 3 times, happened to me. In one case my relations with my colleague were so destroyed, those problems continued for 2 years and finally, we split. So, I know how important is to keep the salary level in the drawer, but not shown to the public. If not possible to make accounting silent on the matter, maybe you can outsource his payroll to another company and just pay commission for that service, to that company.

Answered 5 years ago

Simple. If this person adds value another cant, they should not have an issue. However, if you really want to test if he can add value and not just someone who all talk no action you can bring him on the value-based package. Someone who is value driven will not have an issue. Deserve and desire.

Answered 5 years ago

As an HR personnel I have hired and fired many employees, including business managers. I used to decide whom to hire and whom to not hire keeping the following points in mind:
1. List the Needs of Your Business: Every business is different and needs a person with the experience and specific skills to manage it. Take into consideration the roles and tasks you will need the manager to take on. Keeping these factors in mind, draw up a list of qualities you need the applicant to have. For instance, if you business is a fast-paced, dynamic enterprise, you’ll need someone that can think on her feet and deal with any kind of crisis efficiently. Also, look for a person who is an expert in managing aspects that you are not particularly good with. For instance, if you are not comfortable with marketing strategies, hire a person with these skills. In this way, you will find a complement for your own abilities. In addition, consider where you expect to see your business a few years down the line and choose a manager who can meet its evolving requirements.
2. Placing Your Job Posting: Prepare a posting that highlights the requirements you have in mind. Also, touch upon what your business is all about. Then, you will receive applications from candidates who feel they can deliver on your specific requirements. Before placing your ad, screen the employees in your company. The people already working with you know exactly how your business works and could possibly have the skills to manage it. You could train the candidate you trust to take on more tasks and responsibilities. If you would prefer to hire from outside, place ads in trade journals, publications, and websites connected to your industry. Also, try posting ads in the local newspapers in the classified ads sections. You could consider hiring professional recruiters to find you just the people you need. Make your phone number or email address available so candidates can contact you.
3. Choosing Prospective Candidates: Draw up a list of the characteristics you need and make a bunch of copies. Each time you interact with a potential candidate, add names and contact information, tick off the skills you need that they have, and make additional notes. This will help you remember each one when you are making the final decision. Begin by talking to applicants over the phone. if you have given out your email address, candidates might send you resumes that you can study and filter. However, sometimes, it is advisable not to rely solely on resumes. For one, it could be written by a hired, professional resume writer and not exactly accurate. Or a not-so-appealing resume might be written by a great candidate who is simply not good at writing one. Having talked to the prospective managers, you should be able to narrow them down to a list of 10 to 15 people. Ask them to submit references from past jobs since previous employers can give you a fair idea about the person you could be hiring. Though, candidates are likely to provide you with references of people that will give positive reviews. Also, enquire about their work and salary history. Use your list to mark out the people you could invite for personal interviews.
4. Conducting the Interview: Set aside enough time for each candidate so you can conduct the interview without rushing. In this way, you can ensure that you have discussed every important factor carefully. It also helps if you make a list of questions you need to ask so you do not miss anything. Be friendly when talking with the interviewees but keep it short and relevant. Keep in mind that the candidate will be taking decisions for your business and directing its operations. Begin the interview by talking about the company, operations, ethos, and other basic details. Ask the candidates questions that can reveal their attitude and personality. You must choose a person who may not have the skills but is open to learning as against choosing someone who is a know-it-all and unwilling to adapt. Frame questions relevant to your business and ask about the interviewee’s methods of working and how he would deal with hypothetical situations.
5. Choosing the Right Candidate: It is possible that during the first stages of the interview process you will realize that the candidate is not the right person for the job. Honestly, it is best to just let those people go quickly. Thank the interviewee for applying and tell her that you will let her know of your decision soon. If you think a person is an ideal candidate, let him know. Ask him to call and let you know if he is interested. Also, ask about expected salary and other compensations. After the interviews are done, you will have time to read your notes and pick out the best applicants for the job. If you have any questions about the resumes, references, or any other information in the applications, write them down. When the candidates call back to talk about the job, you can ask for answers. Inform the unsuccessful candidates that the position has been filled.
I believe the above points are enough and will greatly help you decide if I should hire a business manager who expects a salary package much higher than our current employees without creating issues. Apart from this keep in mind to put aside your personal opinions and instead, focus wholly on whether the person is right for the job and your enterprise. Many business owners prefer to have two or three existing employees present at the interview. This helps assess whether the interviewee is good with team interactions and can work well with colleagues and subordinates. Once you have chosen the perfect candidate, offer the appropriate compensation package that will entice her to remain with your company for a long time to come.

Besides if you do have any questions give me a call:

Answered 4 years ago

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