My interest was recently piqued by a phrase I came across in “Rework” by Jason Fried and David Heinemeier Hansson.  

To understand more precisely what the ‘hire when it hurts’ principle means to your business, think of a training metaphor.  It is important to first distinguish ‘discomfort’ from hurt. Most who have trained for an endurance event or pushed themselves in the gym will instinctively understand this distinction. You never progress by alleviating the pressure right when it starts to become uncomfortable.  When training for strength or endurance events, you push yourself often far past the point of comfort in order to produce an adaptation in your body. The body instinctively makes physiological changes in response to a stimulus that make it easier to perform the task the next time. Ultimately you reach a point where quality starts to diminish as you approach the line between hurt and mere discomfort. Just as tolerating a certain amount of discomfort leads to adaptation, hurt leads to injury. Extending this metaphor to your business, when your quality starts to suffer, then you think about hiring.

In training, we often explore the limits of our physiological systems. Do the same you’re your workforce. Resist the impulse to hire when work starts to escalate. Think of more efficient ways to do a task, create software, outsource, be creative, ask ‘why are we doing this particular task at all, is it necessary?’ Do anything you can before adding a large fixed cost to your balance sheet. Pushing past the point of hurt can lead to innovation and more efficient methods of operation.  Following the “hire when it hurts” principle can keep a business from increasing its number one cost too quickly, overhead.

It is a natural reaction for workers in bigger more established companies to have a hire reaction whenever the workload starts to increase. In a company of less than ten people with limited resources, it is easy to see how hiring too quickly can have negative consequences. This real value of the “hire when it hurts” lesson comes later once a business is starting to experience significant growth and has the funding to hire. Just because you can hire someone, doesn’t mean you should. Making the wrong decisions about hiring in the middle stages of a startup company can mean the difference in a profitable, lean business and one that becomes addicted to people and takes years to achieve profitability despite delivering a compelling product and having millions in funding. These companies tend to resemble bureaucratic government agencies, existing for the sole purpose of providing jobs. Don’t become addicted to people, they are an expensive habit. 

 from Gray Skinner - General Counsel for XL Projects