Should you hire more employees?
3 things to consider before taking the decision.
It’s a decision that shouldn’t be taken lightly. Take the time to be cautious and strategic, and ask yourself these questions to know when to hire.
1. Can I afford it?
First, take a hard look at the realities of your business to understand when to hire. What drives revenue? Determine the leading indicators, those predictable factors that can forecast where your business is headed. Analyze these to see if you can justify additional help.
2. Is it the right time?
The key to success is matching hiring to the time when new employees can begin to generate revenue. In many cases, it takes eight to 10 weeks to hire someone. How quickly can you put new people to work?
Hiring too early – If the work is not quite ready, new employees sit on their hands. The upside is that you can use the time to train them.
Hiring too late – If you hire after you’ve made promises to clients or customers, you may not have enough time to get your new employees up to speed.
Therefore, you may not be able to fulfill your promises, which can cause you to lose business. Also, if you’re desperate, you may end up hiring someone who doesn’t mesh with your company’s core values.
Examine the utilization rates of your current employees – the percentage of their time that is billable versus gross profit.
If employees are overworked, for example, working overtime or not taking vacations, they’re at risk of burning out. Examine hiring new employees or making your processes more efficient.
If employees seem to be busy, but gross profit is too low, they may be inefficient, billing incorrectly or improperly trained. You may want to invest in training or improve your processes instead.
If your employees are busy, productive and gross profit is within target, it may be a good time to hire.
3. Do I understand the hidden costs?
Recruiting is one of the biggest expenses a company has – and one of most overlooked. Besides the obvious costs of salary, benefits and office space, a lot of hidden ones are lurking.
Each job candidate brought into the office is usually interviewed by at least three people, often your top performers or members of the team you’re hiring for – which is already stretched to do its work. Therefore, you’re losing production time of some of your most valuable people during this process.
The new hire will likely be trained by one of the best employees you have, meaning that individual will spend valuable time away from his or her core job.
People want more money when they change jobs, so you may have to pay new employees more than existing ones.
New workers take a while to get to full functionality. You’ll still have to pay them their full salary while they get the hang of things. Hiring people also involves time and money. In addition to knowing about the labor laws of each country. But do you know that we can help you? Want more info about hiring? Contact Our Advisors