Should I Hire a New Employee?

When your investment starts gaining traction and you know growth is on the horizon, if it hasn’t begun already, it might be time to look into hiring a new employee. There are many things to consider, and it helps to have an outline to guide you to an answer. Is it a good time to hire a new employee? Here are a few considerations to make before you start placing job ads:

Is It Something Your Business Can Afford?

Think about what drives your businesses’ revenue. If your growth looks good, and you have the capital to maintain a new employee, expanding should feel like a natural step, guided by your needs. If you’re still unsure about where you stand with budget, diving deeper into capacity planning is a sure-fire way to tell if your business is prepared to grow.

Take Time with the Interviewing Process

Always start this process when the financial ability to hire is on the “horizon.” In other words, when the possibility is apparent, start the interviewing process. You don’t have to hire, and even if you won’t be for some time, you will get a pool of prospects. This is data in itself, allowing you to see who your advertising reached, and what caliber of prospects it attracted, including a few other variables. Never hire on a whim. Lower quality corporations essentially hire who they want on the spot. This may seem like the sign of a skilled recruitment regiment, but it’s really the opposite. You see, they hire the first prospect they reach who fulfills a set of “qualifications”, or at least who comes close to it. The turnover rates of these corporations prove a lack of consistency.

Type of Employment

There are four primary types of employment. Each of these employees track time differently, and your approach depends on your business needs.

• Permanent employee:will need constant attention and effort. It’s an open-ended position, with no determined end date. Of course, you have to consider the many legal obligations with this type of employment.
• Fixed-term employee:covers employees whose contract ends on a specified date, after the completion of a specific task, or after the completion of a specific event(s). This is a great solution that can attract good workers, without many of the obligations of Permanent employment.
• Contractors and subcontractors:A great approach is independent contractors because they’re much easier to deal with. Many legal variables like income tax, Social Security, and Medicare from wages paid don’t have to be withheld and sorted out by your business. Furthermore, there are many different tools available to find and hire freelancers or other forms of contractors through the internet.
• Employment agency staff or temp workers:This type of work is done through an agency and isn’t very cost effective for small or even medium-sized businesses. Agency staff is primarily used for physical labor to reduce heavy equipment costs. I only mention this because some agencies have tried to reach out into IT and clerical fields.

Total Employment Costs

There are many parameters to think about when hiring staff. What type of employment you choose will determine the liabilities you have to consider. Building some metrics will help. This article goes into great depth. The gist would be taking the base salary of your employee pool and multiplying it by some of the costs they incur. This method implies around 1.2-1.5 times base salary. So someone making around $30k would incur a cost of around 39k at 1.3×.

The Psychology of Your Prospects and the Workload

This may appear deep and complex, but in the recruiting world, this is what’s studied the most. The first thing to consider is what the job is, and what kind of consistency it requires. This is important as it guides what personality traits you should look for in your potential employees. Do they need to be self-motivated, or will they receive assignments? Will your interactions be remote or in person? These questions help you create an outline beyond academic qualifications. It starts to define the types of people who would excel at a given position. Matching people with things they enjoy in their life helps them have a sense of comfort and regiment. An example would be someone who enjoys technology and computers. They’re already familiar with an operating system, and will probably be able to input data quicker. They’re also more likely to remain interested in the work than someone else. Simple things like this are important in the study of turnover, and the willingness of an employee to push through or quit.

Wrapping Up

Hiring employees is a step that truly defines growth. Not only do you get another person to help reach your goals, but also an obligation to push forward that really feels like your company is growing. With the proper approach and a respectful attitude, you can go far. Also remember, there are those who value some things more than money. Tap into that with a prospective employee, and you will truly gain a loyal employee.