When More Hiring Hurts Profits

Hiring more people is the fastest way to kill your profit margins. It is called the

law of diminishing marginal productivity and it is the reason your favorite small business is struggling.

Imagine a tiny pizza kitchen. One chef is great. Two are faster. But shove ten chefs

in there, and they are just bumping into each other and burning the dough.

In the short run, your space is fixed, so adding more bodies actually lowers your output per

worker. You only win in the long run if you scale the whole building,

not just the staff. Bigger isn't always better, sometimes it is just more expensive.