From Capacity to Capability: Making the Call to Add a Seat on the Bus

Are you unsure if it is time to hire someone new for your business? In this podcast, Tyson discusses the timelines of adding a new face to the team as well as the financial aspects of hiring. He touches on the difference between capacity versus capabilities when hiring and how to make good hiring decisions.

The difference between capacity and capability is crucial to knowing when it is time to bring somebody onboard. Capacity is about the numbers. How many people do you have currently and how many tasks are getting completed? Capability is about leveraging the right skills and innovation to grow your business. Focus on hiring someone who will be an asset and will give you the leverage needed to be a better company.

For many the question is this: When do I know it is time to hire someone new? You need to look at overcapacity and if your team is overworked and staff are stretched too thin. Another important thing is if someone is “wearing too many hats'' and multitasking regularly. The last thing is opportunity cost, which for some might be losing out on clients because you don't have enough team members to take them on.

It is one thing to know more people are needed on a team, but it is another thing to be able to afford it. It is important to know if a company is in the right spot financially to hire someone new. Considering if a person being hired will bring the company revenue is significant as well.

Aside from the cost of hiring, culture fit is another consideration. Warren Buffett says to consider 3 things when hiring someone: integrity, intelligence and energy. Focus on these aspects of someone’s overall character and mindset to ensure they are going to succeed in a company.

Use these tips to ensure you get the right people for the job!

Take a listen.

Episode Highlights:

• 3:41 Discusses the signs of overcapacity 
• 6:05 Discusses the cost of hiring 
• 9:56 Discusses the importance of a streamlined onboarding process

🎥 Watch the full video on YouTube here.

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Transcripts: From Capacity to Capability: Making the Call to Add a Seat on the Bus

Speaker 1 (00:00:01) - Run your law firm the right way. The right way. This is the maximum lawyer podcast. Maximum lawyer podcast. Your hosts, Jim Hacking and Tyson Metrics. Let's partner up and maximize your firm. Welcome to the show.

Speaker 2 (00:00:24) - Hey, it's Tyson. And today we have the exciting topic of how to know when it's time to add a seat on the bus. But before starting today, I want to tell you about something that Jim and I have put together that I think is pretty amazing. And I and I'd love to be able to share it with you. It's maximum lawyer and minimum time. It's a roadmap to creating the firm of your dreams. This is something that we give to all guild members when they join the Guild. But if you text stage 1 to 3 145019260, you're going to get stage one completely free. It's a course. You're going to get stage one of the course. You'll get it completely free. There's no strings attached. I think this is something that you're really going to benefit from, so I hope you'll take advantage of it.

Speaker 2 (00:01:13) - But just text stage 1 to 3 145019260 and we will send it to you. All right. Let's get to it today. So today's conversation is all about understanding the pivot from mere capacity in your firm to harnessing your firm's capability. What we're talking about is capacity versus capability. It's about recognizing your firm when that firm is ready to elevate to its next stage by adding a fresh face to the team. So that is what we are talking about. It's that capacity versus capability. And there is a huge difference between these two words. Capacity is typically about numbers. The number of people you have, the number of tasks that are getting completed capability. On the other hand, what we're talking about, this is something that dives deeper. It's about leveraging the right skills, leveraging the intelligence, leveraging the innovation that you have to grow your firm. There's a great quote that I like on this from Steve Jobs, and it really does highlight this perfectly. He says, It doesn't make sense to hire smart people and then tell them what to do.

Speaker 2 (00:02:27) - We hire smart people so they can tell us what to do. I like this because it gets to the essence of what I'm talking about. You need to change your mindset on hiring. It's about leverage. Stop focusing on what the employee is going to cost you. This is this is a common mistake that we see on a regular basis where people just view an employee as a cost. Instead, let's let's focus on the employee as as one an asset to the firm. But this asset is going to give you leverage. All right. Stop thinking of them as just a cost to the firm, a drain to the firm. That's not what they are. They are there to add value and give you that leverage and focusing on the wrong things. As we we talk about quite a bit, this is going to lead us down the wrong path and we don't want that. Obviously, you want to to be focusing on the right things. All right. So how can you discern that golden moment when adding a new member becomes imperative? Because and I think that's I think that's the common struggle that people have is actually what do you look for? And I'd say that there's three major areas that I look at when deciding whether or not we need to hire someone.

Speaker 2 (00:03:41) - And really, overcapacity is the first thing I look at. So if you're if you're current team as it currently exist, is consistently stretching beyond their capacity, then this is a very, very big probably the number one telltale sign that you need to add more seats on the bus. So look for that. Look for that overcapacity where you're starting to stretch your team to thin the other one. And that one I obviously that one's seems probably a little obvious, but it's not always obvious to all people. The number the number two thing that I look for is, is that multitasking mania that you probably put a lot of people through. If you have a few employees that are wearing too many hats and maybe it's more than a few, maybe it's many of your employees that are wearing too many hats. One, I think it's important to identify the fact that effectiveness will start to dwindle when you do that quite a bit, actually. But this is another sign that if you've got, I'd say at least two people that are wearing multiple hats or doing too many things, especially if you have, let's say you have a paralegal and you have a receptionist, the receptionist leaves and now you have your paralegal doing some bookkeeping, answering the phone as well, and also doing the paralegal activities.

Speaker 2 (00:04:58) - That's an obvious situation, but maybe it's not so obvious where same employee where you've got the receptionist, you got the paralegal, but you do have them do doing your bookkeeping activities. And the phone is ringing so much that they're also playing. Receptionist. You've got them wearing too many hats and you've got to start to look at maybe thinking, okay, I need to start hiring more people. And this gets more and more difficult as you become begin to scale because you you start to become more disconnected. Connected from your employees. Just it's natural because you've got so many people. So you need to find a way to check in with your employees to figure out all the things that they're doing. Another thing to look at is opportunity cost, and this is probably one that's overlooked the most. Are there great opportunities out there or that you're that you're turning down or clients that you're turning down or losing? This is a key part of it, or you're losing due to your bandwidth. Are you are you getting fired a lot on cases or are firms choosing not to hire you because maybe you're not devoting enough tension to the front end, the conversion, the intake process? So this is another telltale sign on top of that.

Speaker 2 (00:06:05) - So those are the big three that I want to talk about. But I do think it's important that it's there's other considerations that we need to take into consideration. We need to think about when it comes to hiring. One of the first ones is really the financial part of things. And you definitely need to recognize the need for for new employees. But I think you also need to be financially shrewd about this as well. I think that's really, really important. You don't want to don't want to overextend yourself because the I think the last study that I saw, the average cost to hire someone stands just over $4,000. And that's that's just the hiring cost. That's not that's not the actual salary of the person. That's solely the hiring cost. So putting a button, a seat just over 4000 bucks and it takes roughly 42 days to fill that position. Our firm is I've talked about our hiring process before and maybe I'll talk about it in another podcast. But our hiring process is is actually longer than that.

Speaker 2 (00:07:04) - We have a pretty long hiring process and it's intentional, but it I'll get to I'm not going to get into the details of why that is in this podcast. That's not what this is about, but it is a it's time consuming is the point, right? It can take some time. So you also have to contrast this, though. That's where, you know, I told you not to focus on the cost. So this is where I get to the part where it's the butt part of this. You need to contrast that with the potential revenue upswing. So think about the full financial picture. Okay, you've got the cost part of it, but think about the financial upswing and where the where you're going to start to get those revenue gains back. Once you've done that, this is where that full financial picture comes into view. So make sure you're looking at the full picture, not one part of it. Another big part of this is, is hire is hiring for your vision. The the hires that you bring in, the team members that you bring in, they need to mirror the aspirations and the ethos of your firm.

Speaker 2 (00:08:01) - Every seat on the bus must serve the journey's end goal. All right. That's a very big, big part of this. Don't forget that in the hiring process, you need to make sure you incorporate that. A part of that is firm culture. All right. Warren Buffett says in looking for people to hire, look for three qualities integrity, intelligence and energy. I do agree with that. But I'm going to talk about in a second what we what we do. But if you don't find the first, he says, the other two will kill you. And I agree. So if you if you lose the integrity part of it, if you find someone that's not does not have integrity, then the other two will obviously kill you. But we stole a page. What we look for is and we stole it from Jack Jack Welch's playbook and we call our people peeps for a reason. The last P doesn't stand for anything, but we call it people peeps. And we look for passion, energy, the ability to energize others, edge and execution.

Speaker 2 (00:08:55) - And I'm not going to go into the detail about each of these. I'll do that in another episode. But the emphasis here is on focusing on culture. The next thing is efficient onboarding. You need to have a streamlined and hearty welcome for your people. Okay? It's going to help you ensure that longevity. It's going to help you with additional things like getting people onboarded quickly, but it's going to help with that longevity. New hires are 69% more likely to stick around for three years or more if you have a good onboarding process. So it's it's a it is a very valuable investment for you to invest on the front end. And I was lucky enough to have been given that advice early on to focus on being able to onboard and have a process in place. It's really, really important. It's also going to give you a massive competitive advantage over your competitors because you're going to be able to onboard faster than others. And I was talking about earlier about we've got an extended a pretty long hiring process.

Speaker 2 (00:09:56) - That's intentional. Okay. So I'm not talking about that. Ours ours is a very efficient process, but it's intentionally long. Again, I'll talk about it in another another episode. But really, here is your actionable piece of advice. Here's your your main takeaway and hopefully this is one you're going to take with you so you can make quick decisions on hiring. But I want you to start a bi monthly employee needs assessment. You can do it bi monthly or quarterly, whichever one you want, but let's call it an employee needs assessment. And I really want you to write down all of the unattended tasks that that are piling up. Assess all of the work burdens that you're running into. Look for all of those lost opportunities. And if you start to see these things pile up, that is a key indication. That's a really easy way to determine whether or not it might be time to to open up a new seat on your bus or to create a new seat on your bus. All right. Let's close things up here.

Speaker 2 (00:10:49) - Let's if you don't mind, make sure you subscribe to our podcast if you've not to this point. But I just want to remind you to check out our Saturday episodes. The next one we're going to go over is breaking the email addiction, embracing scheduled checking for mental clarity. Until then, remember, imperfect action will always eclipse perfect. And action. Take care.

Speaker 1 (00:11:15) - Thanks for listening to the Maximum Lawyer podcast. Podcast. Stay in contact with your hosts and to access more content content. Go to maximum lawyer.com. Have a great week and catch you next time.