Hiring the right people for your company is a complex task. Hiring the right people at the right time is the holy grail of a human resource director. How many employees does your business need? When is the right time to hire, and how should you go about doing it? What kinds of positions should you be hiring for? All of these are questions that will have to be answered before any business owner can grow beyond a one-person operation or small partnership.
Those questions are also very important, because the most significant expense that any business faces will likely be their payroll. Not only the expense of paying the people that work for the business, but finding, recruiting, training, retaining, and providing benefits for those employees is a major cost for any business that has more than one person working for it. Beyond that, business owners must pay taxes and incur other costs around employing people.
Where’s the best place to begin answering all of these questions? In this post, we’ll take a look at some of the ways that planning, strategy, and timing can help you hire the right kinds of people at the right time.
When is the Right Time to Hire?
There’s a simple rule when looking to hire your first employee: Only hire when doing so will add money to your bottom line. That sounds easy enough, but the reality may not be so clear. Situations that feel like the right time to hire may actually be symptoms of other issues like an abnormal spike in business or inefficient/broken business process.
Knowing that, a full review of current processes and revenue forecasts should be the first step taken before any hiring decisions are made. As a business owner, you can make much more deliberate and forward-looking choices when you’re armed with the right information. Hiring to grow your business or add expertise or experience is a good thing. Hiring because you feel stressed about the orders coming in the door may not be.
How Many People Do You Need?
It would be nice to be able to hire so many people that you never have to work again, but as we’ve seen above, the costs of hiring and paying those people add up quickly. Several blogs and websites have formulas or guidelines for the exact numbers of people that need to be hired to grow or sustain a business, but real life is much different that the theories posted there. The number of people you need to grow will depend largely on what type of business you run and where in the lifecycle your growth falls. Service-based businesses that operate largely in the professional services space might not need as many hands on deck as one that produces a physical product or service. Likewise, a business that is just getting started will benefit greatly from having an extra person or two to do the heavy administrative lifting on things like invoicing and customer service, but too many people will slow the company’s ability to respond to problems and will ultimately cost too much to sustain.
Where Can You Find the Most Qualified Employees?
Job boards may seem like the best place to start posting positions when you’re ready to hire, but it might not be surprising to find out that the best candidates don’t come from the most obvious places. Job boards, especially those online, attract vast numbers of people and don’t always deliver the best search results to those looking for work. As a result, there is sometimes confusion over whether an applicant is qualified or even interested in a position. This can waste time, money, and brain power trying to sort through all of the resumes that are received through an online portal. While it’s true that recruiting is a numbers game – as many as 60+ applicants can be needed to yield a single qualified hire – there needs to be strategy involved in targeting those applicants.
In many cases, an employee referred through a business associate or friend will be the best fit. Similarly, utilizing the services of an industry-experienced recruiter can yield candidates that are not only qualified, but very motivated to succeed in your industry. The costs of these services are higher than posting on a job board, but the avoiding the cost of recruiting multiple failed candidates can quickly add up as well.
What Kinds of Positions Should You Hire?
What positions should you hire for? That depends on what your business does. It also depends on your strengths, both as a business owner and an employee. That’s a long way of saying that you’ll need to know and be comfortable with your strengths and weaknesses in business, especially if you are a one-person operation only looking to hire one or two employees to get the business off the ground.
It can be tempting to recruit for the area of your business that is the most hectic or the most painful for you to deal with, but like the other points we’ve made here there is more planning needed to make the right decision. If you, as the owner and only employee, are particularly skilled in finance or sales, finding a person that is strong in operations or technology might be the best counterbalance to your work. This is all obvious, but the real challenge with the first few hires is determining which areas of your business will be most likely to generate the most additional growth and revenue by adding another employee. Much like choosing the right time to hire, selecting the right type of employee is a game that is won through careful planning and analysis.
Bring it All Together
All of those questions and not one about hiring someone that you actually like or can trust. In a thorough recruiting process, those two important points will likely be addressed, but in some cases the best hires for new businesses might not technically be hires at all. Several startup advisors recommend taking advantage of a co-founder or co-owner to share the load of a small and growing business. In many cases, these people have a personal stake in the success of the business and are dedicated its ultimate survival.
No matter your industry or the size of your business, making the right hiring decisions will only happen if the process is looked at proactively. Making stress-based, reactive decisions will lead to hiring the wrong people at the worst possible time. Take a step back, assess your skills, your goals, and your ability to grow, and begin placing people where there are holes or opportunities for improvement.