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.