Revenue per head rose 9%. Gross margin fell four points.

A service business can hire exactly the person it was missing and still end up with worse economics. The mechanism sits in grade mix, not effort.

Abstract bridge artwork for Revenue per head rose 9%. Gross margin fell four points.

The hire is rarely a mistake anyone regrets making. Lead times were stretching, the owner was reviewing work at eleven at night, and the obvious answer was someone experienced enough to be left alone. So a senior person joined, the queue shortened for a quarter, revenue per head went up, and gross margin quietly went down and stayed down. This is one of the most common ways a service business grows into worse economics. It is not a failure of discipline or effort. It is a failure of grade mix,…

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