Do You Really Need to Hire Another Employee?

Business.com / HR Solutions / Last Modified: February 22, 2017

Ask yourself these 6 questions to determine if your business really needs to hire new employees, or if other options make more sense.

Is now the time to add on to your staff? Whether you’ve been running a small business for a while or are brand new, it can be tough to tell when you need to expand your number of employees. Hiring employees is expensive, but it’s essential if you wish to grow your company.

Many small-business owners remain restive about hiring. The National Federation of Independent Business reported that nearly 80 percent of small, private companies made no hiring changes in July 2013 and 12 percent let workers go.

Before deciding if now’s the right time to grow your staff, ask yourself these 6 pertinent questions to see if hiring is the best decision for you.

Question #1: Where do you see your business in one year?

Hopefully, you’ve made a business plan, set goals and have a general idea of where your business is headed. Before hiring, review those goals (or set them if you haven’t already done so) and see if a bigger staff will help contribute to you meeting them. And if so, what types of employees will help you meet those goals? Do you need someone to assist in product development? Do you need a secretary to help handle the more mundane tasks?

Take a close look at where your business is now and where you hope to see it go.

Related Article: Need a Business Plan? There's an App for That

Question #2: Can you afford to hire new employees?

New employees need to be trained, and you may want to provide them with health benefits. And of course, you will have to pay them for their work. Are you able to take this on?

Hiring new employees may mean you make less money in the short-term while your business gets going again. If you cannot afford the expense of added employees, I probably don't need to tell you that now is not the time to hire.

Question #3: How much time are you spending on random tasks?

Do you find you’re spending a good portion of your day responding to customer questions, handling complaints or managing the bookkeeping? These tasks can usually be taken care of rather efficiently by a new employee, giving you time to focus on growing your business, developing marketing plans and improving your product or service.

Question #4: Can you outsource some of your work?

If you’re on the fence about hiring new employees, take a look at the roles you want to hire and see if that work can be outsourced. The advantage for you is you don’t have to pay an employee directly nor do you have to pay for health insurance.

Instead, you pay a third party to handle those tasks for you. An added bonus is that if you’re slow, you can lessen the workload instead of having to pay someone for 40 hours per week when work is stagnant.

Related Article: Prior to Hire: Things to Consider When Bringing in Freelancers

Question #5: Are you growing?

A simple question, but one that needs to be asked before hiring new employees, is if your company is currently growing. If you are experiencing slow and steady growth, it could be a great time to hire.

If, on the other hand, sales come in spurts (like around the holidays, for example), you may want to simply hire temporary workers just for the busy times and wait until growth is more consistent before hiring full-time employees.

Question #6: Can your business handle a bigger staff?

Do you work out of your home or have a large office space? Does work have to be done at your store or can employees work remotely? These are all important questions to think about before hiring new people. If your office space can’t fit the extra employees, you’ll have to either move to a larger space (which is an added expense) or hire people to work remotely.

Keep in mind that the ultimate goal is to keep your staff as small as possible while still providing excellent customer service. If you’re overstaffed, employees will wind up sitting around on your dime. If you’re understaffed, customers may not feel completely satisfied.

Both of these scenarios affect your bottom line. The key to running a successful business is finding that perfect balance between expanding your workforce while simultaneously growing your business.

Conclusion

According to the Small Business Administration, small businesses represent 49.2% of the private sector employment, so hiring new employees is a very integral component in the growth for any small business. It is important to make sure you hire the right employees for your business, so take in account these 6 questions when hiring any new employees.

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