Zoë Damacela is a dynamic, young entrepreneur that we’ll be following in 2013. She’s a NFTE (National Foundation for Teaching Entrepreneurship) alum whose business plan for Zoë Damacela Apparel took top honors at the Chicago Citiwide Business Plan Competition and placed second in the NFTE National Youth Entrepreneurship Challenge.

We’ll follow Zoë through this blog as she manages her business and juggles school and other responsibilites.

Improving productivity through a new hiring model

3/7/14

Something that can be challenging for a lot of small businesses is motivating entry level employees.

At a larger company, the constant flow of open management positions tends to naturally encourage ambitious employees to work harder in competition for those select jobs. When I designed for a large department store, all of the designers worked long hours and at super high productivity because we were all vying for the open senior designer position.

Once I started my own business, I expected that same energy and fervor from the new designers I hired. Instead, they were much slower and much less efficient with their time.

Of course I never thought about the fact that at my small company, there were fewer management positions that entry level employees could strive for.

In the design department this was especially true. There was only one senior designer--myself. Not only that, but because the company is so small our culture is naturally much more laid back and friendly than a large company. And of course, the fact that the CEO is a 21 year old college student doesn't help either.

I quickly discovered that I was left picking up the slack and personally doing the work that I hired other people to do. I was spending so much time correcting mistakes and reworking designs and ideas that I was running out of time for my own work.

I realized I couldn't do everything, but I needed a way to ensure that my team was pulling their weight.

The solution was something that a lot of small businesses are starting to do. Instead of hiring full time designers, colorists, seamstresses and other entry level employees, I switched to operating strictly with independent freelancers and contractors.

Now, rather than being paid hourly no matter the output, they are paid at the completion of a particular project. Not only does this guarantee a better product for the company and customers, but also a much more efficient team because everyone wants to finish the project as quickly as possible to get paid and move on to the next project.

This model also dramatically reduced the need for mid-level managers, because the terms of the contract are agreed upon first and then the freelancers complete the work according to their own schedule and pace.

This approach to staffing has allowed me to drop designers whose work wasn't up to par by simply not picking them up again. And reward designers, colorists, seamstresses, pattern makers, etc., who do a good job by offering them more projects at increasing rates.

I have been operating Zoë Damacela Apparel this way for a few years now, but I wish I would have done it like this from the beginning.

The views of third parties set out in this publication are not necessarily the views of EY. Moreover, the views should be seen in the context of the time they were expressed.