Step 1 Hiring from Scratch: When to Hire
Considering taking on new staff? As a first time business owner it can be difficult to judge when is the appropriate time to hire new staff. With a startup initially you get used to doing almost everything yourself. At some point though, as your business grows, there is too much work for one person and you may benefit from people with different expertise. However, resources are usually stretched. Most revenue has to be directly re-invested in the business. Can you really justify the expenditure of paying an additional salary?
If hiring considerations are prompted by you or your staff feeling overworked, there are number of things to rule out before deciding to hire more staff. You will need to analyse staff capability, workloads and work organization.
Ask yourself the following questions:
- Do staff have adequate training and skills to perform at the required level?
- Is work organized in an efficient way?
- Are staff motivated to perform to the best of their capabilities?
If the answer to these questions is yes, and then you may indeed need to consider taking on new staff.
Signs that its time to hire:
• Overtime has becomes routine: You observe that you and your employees are working too hard, and frequently working overtime.
• Business growth: The growth for your service/product is steadily increasing, meaning there is more work and also more revenue to pay for additional staff
• Expansion: You plan to expand to new areas, and current staff are already fully occupied or lack the skills/knowledge you require. You need new staff to take on these new areas of responsibility.
• Missed Opportunities: You find you are missing out on new opportunities because there is’t the time to pursue them. You are only able to maintain your business rather than build it.
• Dissatisfied Clients: There is insufficient time to deal with client demands, resulting in less than optimal customer service.
• Errors: There are increasing numbers of errors in work produced and quality is impaired. Time pressure is resulting in mistakes being made because work is rushed.
Simply deciding you need new staff is one thing. There are other things to consider before taking on new staff:
Are you set up to accomodate new staff? Do you have the necessary office space, computers, equipment, etc.?
Is there sufficient revenue to employ someone in the long-term? A short period of growth may not be sustained. Can you absorb the cost of a new employee if growth stalls?
Remember hiring permanent staff is not always your only option. Sometimes it is less financially risky to hire independent contractors/freelancers to assist or perhaps take on temporary staff.
Many decisions in a new business venture are often a leap of faith, but try to ensure that you have fully considered all your options before committing to employing an additional person.
Click here to read about the next step, Step 2: Hiring from Scratch: Write a good Job description!
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