Knowing when it’s time to hire employees is a balancing act. You don’t want to take on added costs if it’s unnecessary, but you also want to have enough staff to meet demand and seize growth opportunities. Otherwise, your business risks stagnating.
Having the right number of employees is part of workforce management, which is among the biggest challenges for business owners. Consider the following things when deciding whether or not to hire more employees:
Is everyone overworked?
If you’re like most successful business owners, you're accustomed to hard work. You put in long hours to expand your company.
But once your business is established, spending valuable time on basic administrative tasks may be a sign it’s time to hire. Added staff can assume office-management duties while you focus on finding new revenue streams.
Evaluate if your employees are struggling to keep up with their workloads, or if their job performance is declining and stress levels are on the rise. Indications of overwork often appear as lowered worker productivity or an uptick in sick days.
Have there been more customer complaints?
A decline in customer service can also signal an overtaxed staff. Look for an increase in customer complaints, lagging delivery times or a drop in the quality of your products or service. An understaffed company can lead to loss of business if your employees are unable to respond promptly to customers’ questions and concerns. If customer phone calls or emails go unanswered, hiring new employees can alleviate customer service backlogs and help keep existing or potential customers happy.
At the same time, you may find you’ve reached a limit for growth at your current staffing level. For instance, if you or your employees are unable to follow up on customer leads, or you have to reject new projects, your company may be understaffed.
Is your company growing?
Use projected revenue and expenditures to analyze if your company is going to need more employees and can absorb the cost of increasing staff.
Analyze demand for your products or services. If orders have been increasing and your predictions for sustained growth look to continue into the foreseeable future, it may be a good time to hire more employees. If the future looks promising but you're still unsure that demand will stay steady or you'll get that new contract, you’re likely better off delaying a hiring initiative.
You may also see an opportunity to expand into a new market, leading to increased customer orders. Such scenarios present some risk — the opportunity may not be as lucrative as you imagined — but it's one that may well be worth taking. That may necessitate hiring employees, including those with different knowledge and skills than your current staff.
As you determine whether your business will have the financial resources to absorb new workers, remember that costs include salaries as well as benefits, payroll taxes, training, supervision, and office space and equipment. Such information will allow you to push forward with greater self-assurance. It can also help you determine how many people to recruit — and at what pay and benefits levels.
How to hire more employees
Knowing how to find employees is also crucial. Start by creating a clear, comprehensive job description with details about duties and responsibilities, performance standards and experience and education requirements. A good job description will also discuss your organization’s culture.
An informative, professional job description will reflect positively on you and your company, and will help attract the right candidates. It can also be used later to evaluate an employee’s job performance.
What’s more, the exercise of writing the job description can help you as a business owner pinpoint your needs and see how each new employee can fit in with the overall business.
You may need patience, as it may take a few weeks or months to find the right candidate. Be prepared to review many resumes and conduct several interviews.
Referrals from employees are often the best place to find talent. But you can also locate promising candidates via social media contacts, on job and trade websites, or by hiring a staffing or search firm. A small business development center may also be able to assist you in determining whether to hire more workers.
Having the right number of employees can help protect your business's productivity, but there are other important ways to keep your company secure, too. Learn more about Nationwide small business insurance coverage options today.