For many small businesses, knowing when to hire another employee is critical to long-term success. If owners fail to hire fast enough, then capacity can fail to keep pace with demand, causing output to suffer. However, hire too quickly and resources may be stressed too thin across too many workstreams.
Choosing when to expand a workforce is a delicate balancing act, and many business owners struggle to find qualified workers and keep their company’s growth goals aligned with hiring budgets.
So how can you make sure you know the right time to hire for your small business? Keep an eye out for the right conditions listed below to make sure you strike while the iron is hot.
One of the easiest ways to know if it’s time to add a new hire is to take a close look at your existing workforce. Are your current employees struggling with their current workload, or is there room for them to take on more responsibilities? Is performance slipping because your staff is overstretched, or are they bored with not enough to do? An honest examination of worker capacity will be key to helping you determine whether or not to add that new hire.
A note to all business owners, especially in the post-pandemic world: While evaluating performance, be on the lookout for signs of burnout. Even the most talented and hardworking employees are impacted by workplace burnout, which often presents in decreased productivity, the erosion of morale, and disengagement from the company. Knowing when to hire can help avoid the unnecessary strain caused by an unhappy workforce and make your business a happier and healthier place for all.
When you think of low-value work, think of the tasks that mean little or nothing to clients and fellow coworkers. These types of tasks are generally routine and don’t demand collaboration, like answering emails, scheduling meetings, or updating spreadsheets. Like many admin tasks, low-value work is necessary for the functioning of a business, but that doesn’t mean everybody needs to spend the same amount of time doing it.
If your CFO is spending hours organizing Excel columns instead of strategizing for your company’s financial success, or your head of sales is filling out expense forms rather than promoting your product, then it’s probably time to hire.
Another way to look at it – what is the cost of that person doing the work? This can be calculated based on that senior person’s hourly work, or you could calculate based on what they aren’t getting done – what you really hired them to do. Remember, when high-value employees are doing low-value administrative tasks that should really be managed by someone else, they’re not helping your business grow or innovate.
If your revenue growth stagnates or comes to a grinding halt, it could be a sign that departments that should be driving the most revenue are overstretched and under-focused. If your company is not growing, then it is dying, and red flags should be flapping in the wind if you find yourself in this unenviable position.
What should you do about staffing when revenue is disappointing? Your first instinct might tell you to lay off employees and cut your losses, but that approach could hurt more than it helps. Take a look at what you think might be the source of your revenue troubles to determine if adding another employee could be a viable solution.
As a responsible business owner, sometimes you recognize that you have to say no to tempting opportunities in order to avoid biting off more than you can chew. However, if you find yourself repeatedly turning down new business due to a lack of employee capacity, then that could be a sign it’s time to hire.
If you’re ready to take on new business, then you’ll need to bring in new staff to accommodate the expansion of your services and assist with the increased workload. Make sure that the additional revenue justifies the costs of a new hire, but don’t shy away from growth just because you’re afraid of expanding your workforce.
As the old saying goes: trust takes years to build, seconds to break, and forever to repair. If clients or customers start reaching out to you about missed deadlines, poor service, or negative experiences with your company, then your internal alarm bells should be ringing.
Poor customer service can be a sign that you need to bring someone new onboard as soon as possible before your customers decide there’s another service provider who better deserves their trust. Retaining loyal customers isn’t only a sign of a healthy business, but it’s also good for the bottom line.
At the end of the day, the people make the business, and the decision to add someone new to your workforce can be a daunting one. Having a clear idea of when to add a new hire can help relieve some of the stress associated with change and bring you peace of mind as you and your business transition into bigger and brighter things.