Attempting to save money through employing cheap labour is a gamble that rarely pays off.

Saving money is not always about paying less for something now. Several years ago I had a requirement to set up a new database and to make changes on some of the functionality for a new recruitment application we were intending to deploy. I found two suitable database administrators who claimed they had the skills to do the work and both appeared, on paper, to have the pre-requisite abilities we needed.  One candidate was $50 per hour and the other was $100 per hour.

As the job seemed relatively straightforward I employed the less expensive candidate. After three days I checked on progress and found the contractor, despite his enthusiasm, was really struggling to provide the expected results. After some discussion we agreed that if the system could not be up and running by the next day I would need to find someone else to do the job. The deadline expired, so I pulled the plug on the contract and paid him $1,600 for his effort. With the pressure on after almost a week and nothing to show, I called in the more expensive candidate. It took him an hour to fix up the issues caused by the first contractor, and in another hour he had the system up and running; I paid him $200.

This was my first lesson in the true cost of getting a job done. It was an important lesson in highlighting the difference between employing people with previous experience in doing the job and employing those who are confident they have the skills to do the job. Attempting to save money through employing cheap labour is a gamble that rarely pays off. While quickly apparent in hourly-paid contracting, this also applies to permanent employees. Cutting back salary will almost always force a sacrifice in other areas, i.e. technical competence, relevance of previous experience, job commitment, and / or communication skills. When assessing the available budget for a job, it’s always important to factor in the cost for others involved in training, supervising, motivating, clarifying requirements and correcting issues. All things considered, can you afford cheap staff?