Chamber Chat - When to hire additional staff

Sep 23

By Meg Moss


Small business owners often dream of the day that their operation will be large enough to bring in some help. After working for months or years as a one-person operation, it can be hard to know when it’s time to hire your first employee, or even your second or third.

According to National Federation of Independent Business’s (NFIB) May 2018 Small Business Jobs Report, small business job openings are at record high levels. So how do you know if it’s time for your company to hire? Small business owners are always busy. But just because they’re busy doesn’t mean they can, or need to bring on an employee.

If you can sit down and write an entire job description that includes enough tasks for a full-time position, then hopefully, it’s time to bring someone onboard. I say hopefully. Just because there’s an insurmountable task list, doesn’t mean the money is there to pay for more staff. You have to figure out if an employee would be aiding the company or costing the company.

In a recent NFIB article, I read about Online Optimism CEO Flynn Zaiger. His company has grown from just Zaiger to a 12-person company in the past five years.

Zaiger did his own financial math at the time of his first hire. “I looked at the revenues coming in, made a rough estimate of expenses, and figured out if the additional cost of a hire would keep us in the black,” he says.

Zaiger also recommends financially planning for an employee to not be 100 percent effective until three to six months after their start date.

“If you're going to be requiring a significant increase in work and revenues immediately, those are unrealistic expectations and you're setting up both the employee and your company for failure,” he says. 

It can be challenging to keep your staffing levels aligned with your company’s growth goals, without overspending your hiring budget. If you don’t hire quickly enough, the work begins to outpace your capacity. If you hire too quickly, the employer and new employee can both be in a bad financial position.

A recent article states that one of the most obvious signs that it’s time to hire is when your level of customer service begins to falter. If it’s gotten to this point, it may be time to hire to ensure your company’s reputation and workflow doesn’t suffer. Other signs that customer service is suffering: orders are unfulfilled or are late, emails are falling through the cracks and phones aren’t picked up. These are red flags indicate that you need to bring someone on board as soon as possible, before your customers become disgruntled and decide to move on.

More signs that it’s time to hire: employees are legitimately overwhelmed, you find yourself saying “no” to new business, and high-value employees are doing low-value work.

One thing is for sure, if you do decide to make your first, second, or third hire, take a close look at your on-boarding process. If you don’t have one – create one. New hire orientation is key to the long term success of that employee, and therefore your business.

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