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When Is It Time to Hire Another Employee?

When Is It Time to Hire Another Employee?

By: Catherine Conlan

Timing is everything for your business, especially when it comes to hiring another employee.

Yet as a busy CEO, it can be challenging to keep your staffing levels aligned with your company’s growth goals, without overspending your hiring budget.

“If you don't hire quickly enough, the work begins to outpace your capacity, and the unfinished work starts to pile up,” says Leo Welder, founder of ChooseWhat.com, a startup guide based in Austin, Texas. 

“If you hire too early, the most obvious problem is that you may not have the cash flow you expected, which puts the business and your employee in a bad financial situation.”

So how can you strike the right balance? Watch for these signs that it’s time to expand your staff.

Customer Service Is Slipping
One of the most obvious signs that it’s time to hire is when your level of customer service begins to falter. "Clients are noticing missed deadlines and that your team is stretched to the max,” says Ky Kingsley, a Los Angeles-area vice president at the staffing agency Robert Half Finance & Accounting

If it’s gotten to this point, it may be time to hire to ensure your firm’s reputation and workflow doesn’t suffer.

Other signs that customer service is suffering: orders are unfulfilled or fulfilled past their due date, emails that fall through the cracks and phones aren’t picked up, says Nellie Akalp, CEO of CorpNet, a business consultancy in Westlake Village, California. These are red flags indicate that you need to bring someone on board as soon as possible, before your customers become disgruntled and decide to move on.

Your Employees Are Overwhelmed
Perhaps your business keeps ticking along, but you start to notice increased absenteeism or employee sick days. It might be as simple as hearing from your employees that they’re tired, overworked and frustrated.

“I’ll talk with my current employees and get a feel for how they feel,” Akalp says. “If they are overwhelmed and also see things falling through the cracks, I know that I should trust my instinct even more and move forward.”

You Find Yourself Saying ‘No’ to New Business
Whether it’s a lucrative market opportunity or a large contract that lands in your lap, new business can be an obvious sign that it’s time to hire. 

“It's time to hire when you are losing business because your existing staff cannot meet demand,” says Donna Lubrano, adjunct professor at the College of Professional Studies at Northeastern University

It’s Time to Bring Some Tasks In-House
As a business that may just be getting its footing as a startup, it can make sense to outsource some tasks rather than hire staff to perform them. But as your company grows, it may make more sense to bring these tasks back in house.

When you find it takes extensive time and money to manage an outside resource, it’s time to bring the work in house, says Deborah Sweeney, CEO of MyCorporation, a business consulting firm based in Calabasas, California. 

“Also, sometimes knowledge of the ins-and-outs of the business becomes more critical. Often outsourced resources do not have the deeper understanding that a full-time employee can have.”

High-Value Employees Are Doing Low-Value Work
You may find that you or your higher-paid employees are spending a lot of time on junior-level tasks. If these high-value employees – or even yourself – are doing administrative tasks that really should be handed off to someone else, it’s time to look at making a job offer.

A great way to determine whether it makes sense to hire someone, start by putting a dollar value on your time, says Meredith Wood, vice president of content at Fundera, an online marketplace for small-business loans based in New York City. 

“Calculate what you cost an hour,” she says. If you’re doing tasks that would cost less for someone else to do, seriously consider delegating them to a new employee