WHEN YOU SHOULD HIRE YOUR NEXT EMPLOYEE


As a small business owner, when to hire your next employee is a big decision unlike a big organisation or set up, hiring an employee can be a thing of little significance to the company. Recruiting the right person in any business is crucial, however in a small business, this decision can have a huge impact on the bottom line almost immediately.
Here are some tips to consider when thinking of hiring a new employee:

STATISTICS: A great way to get meaningful information is to use a ratio known as “wages to revenue.” In other words, you divide the amount you are paying out in wages by your total income. If wages to revenue is trending up this could be a good indication that you are overstaffed, or that you may be understaffed and are paying out lots of extra wages in overtime.
You also need to beware that your staff aren’t being over worked, or that they are becoming fatigued, often signalled by a drop in service levels and quality.

BENCH MARKS: There are a number of industry benchmarks that you can refer to. However, benchmarking data is made up of both great businesses and bad businesses.  An acceptable benchmark differs from business to business, so rely on your firm's average. Every business has a benchmark or average capability of number of staff and other measures it can handle, this is a good factor to consider when deciding on whether or not you want to hire a staff.
WEIGH YOUR BUSINESS TREND: consider if your increase in workload is just for a period of time and you do not need a new hire for a permanent service, rather a contract basis. If you decide to hire on a permanent basis, be certain of how hiring will increase your present productivity. Look at the work space available and be sure you can cater for a new staff.

HIRING COST: When employing a new person, it takes time to train them and for them to become a productive team member. By being realistic about what this timeframe is you can work out how much it is really going to cost to hire and whether it’s worth it.

Its not how big your firm is, its not the number of staff you have, employing an extra hand should make sense financially.