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 a year 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 a year 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 a year ago


Hire them.

Keep this person's salary private.

Answered a year 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 a year 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 a year ago

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