June was a big month for hiring in the U.S., with employers adding 287,000 new jobs.
Should your company jump on the hiring bandwagon? That’s a tricky question for business owners or managers — one that means weighing the benefits of everything new employees can add vs. the very real costs of expansion. Let’s look at some of the factors you should consider when you’re deciding whether to grow your team.
Gauge your staff’s stress levels
Do you see a lot of worn-out faces when you look around your business? One of the main reasons you might want to increase your staffing is that your team members are overwhelmed by your current workload. Pay attention to signs of excessive stress among your employees. For example, do you overhear more complaints? Do you notice workers taking more sick days? One huge red flag is employees requesting time off on short notice. This could mean that they’ve had it with the stress of your business and are going on job interviews at other businesses.
Be aware of customer satisfaction
If your staff is feeling exhausted and overworked, your customers aren’t going to be too happy, either. Keep an ear out for complaints about the quality and timeliness of your work, and be prepared to hire if you realize your reputation is slipping. After all, word-of-mouth marketing is everything for a business.
Evaluate the effect of new business
Have you recently added customers or opened a new location? If business is booming, you’ll want to consider hiring before your staff gets stressed to the breaking point by all the new work. Keeping your team strong also helps you maintain the quality levels that created your success in the first place. If you don’t think the increased workload will be permanent, hire contract workers to grow your staff temporarily.
Break out of the doldrums
While Tribe of Zero, an online resource for business owners and entrepreneurs, recommends hiring as a response to growth, the website also suggests bringing on new employees (if you can afford them, of course) to kick-start growth when business is stagnant. Having a larger team can help you do more and make your product or service better.
Expand your team’s skills
One way that hiring can fuel growth is by adding new skills to your team. Perhaps you have an idea for growing your business that requires expertise your current team members don’t possess. You should also consider hiring if your business is implementing new technology. New employees who are adept with the new technology can help get your current staff up to speed.
Consider the best use of your time
In addition to the morale and productivity of your team, you should also look at how you’re spending your time when you’re mulling whether to hire new employees. Are you feeling stretched thin yourself? Would adding some staff members free you up to be more strategic instead of getting stuck taking care of everyday tasks? When you have more time to do the things you’re best at, your business will benefit.
Calculate your budget for hiring
If you’ve discovered that you need new employees, now your decision comes down to whether you can afford them. Remember that the cost of a new employee isn’t just his or her salary. You should also take into account factors such as the cost of recruiting and training new hires. According to a survey by Monster, 31% of small business owners spend over $300 making a hire.
Once you’ve estimated the cost of the new employees you need, make your best prediction on how much they’ll increase your revenue. If you think you’ll still turn a profit with an expanded staff, move ahead with your hiring plans. (Just make sure you’ll still have some cash on hand for emergencies, too.)
Sometimes, adding employees can be more cost-effective than maintaining your staff size if you’re currently shelling out a lot for overtime pay. If you’re weighing the cost of paying overtime vs. hiring new employees, don’t forget to take into account the major changes to U.S. overtime rules that take effect Dec. 1, 2016.
Adjust the way you manage
Whether your business can support new employees isn’t just a financial question, though. From an administrative standpoint, are you ready to grow? Do you need additional space or equipment? How will you or your supervisors make the adjustments needed to manage more employees? What processes will need to change when your staff grows?