It is one of the most difficult and one of the most important workforce management challenges – knowing when it is time to hire a new employee.
While some signs are obvious, such as increased demand for your product or services, other reasons may be more along the line of opportunity and strategic planning for the future.
There are basic signs, analysis and considerations to watch for and weigh, including a full accounting of the many costs that come with a new hire.
Here are some of the basic factors and signs that may tell you a new employee is of need or a necessity:
- Numbers show your revenue is at or above target and you project it to continue. It is important to outline and analyze, what facts or factors can show that this will continue?
- There is a definitive increase in demand for your products or services. What factors assure you that this growth curve will continue?
- Order/service backlog: Watch carefully when this starts, and know your business limit to where backlog will cause complaint or alienation and loss of customers.
Growth and expansion:
- Determine if you or a key employee needs to be freed up from more mundane tasks to pursue more important tasks such as new business acquisition.
- You see a specific opportunity for growth and expansion in your business or industry and need someone to develop that opportunity.
- You need an employee with a specialized level of skill to grow your business.
There can also be direct signs from your workforce, in the office, on the floor or on the books. Employees are complaining about overwhelming workload. Is burn-out around the corner?
Excessive overtime? Concerning payroll, it is costly. Concerning employees, it can also add to workplace burn-out.
Payroll percentage & training:
What amount of revenue will cover the salary (include benefits) of the employee? When calculating, start with month to month then go to yearly. Make sure benefits are factored in properly, as well as training time.
One tip to capitalize in cost of training time is to establish an in house mentoring program to begin as soon as a new hire starts. This will provide ongoing training in a cost-effective way.
Other costs and considerations:
Office space: Will the addition of an employee/employees force you to expand and how much will that affect your expenses?
Type of employment: Full time, part-time or independent contractor? This follows the full understanding of your type of business. For example, is it seasonally driven? Also note that benefits may be the same for many types of employees.
You know your business best. But even if you do, or need solid advice on the hiring factors, research like industries in your area and consult with a professional who can advise you on hiring and expansion.
ShaBro Alternative Office Solutions can help your small business with a variety of HR consulting and office solutions, including business consulting, employee hiring and firing, developing employee handbook/operational manuals, budgeting consulting, bookkeeping services, payroll services and debt collections to help expand and grow your business.