5 Signs That it’s Time to Hire for Your Small Business
Timing is everything in business—including knowing when to bring on a new hire. Hint—it’s often sooner than you think.
When it comes to hiring another employee, it’s absolutely critical to understand your needs and act in a timely manner. 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.
Knowing when it’s time to hire in order to meet business needs is not easy, but it’s critical to your success.
If you don’t hire quickly enough, the work will start to outpace your capacity and begin to pile up. Hire too early, and you may not have the cash flow you expected, putting your business and the new employee in a tough position.
So how can you strike the right balance? Watch for these five signs that you may be ready to hire more staff.
1. 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. If clients start calling you about missed deadlines or incomplete tasks, it could be a sign that your team is stretched to the max. Not hiring adequate staff, if it’s gotten to this point, can damage your company’s reputation or result in employee burn out.
Other signs that customer service is suffering include orders going unfulfilled or fulfilled past their due date, or emails and phone calls going unanswered. These 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.
It’s important to understand the cost of retaining loyal customers versus gaining new ones. While bringing in new customers costs anywhere from five to 25 times the cost of retaining existing ones, a problematic churn rate reflects negatively on the overall health of your business. Churn, the opposite of retention, measures the rate at which customers end their relationship with your organization.
2. 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. However, many employees may be unwilling to admit that they’re overworked for fear of being perceived as not being up to the task.
Assuming your company culture values honesty and open communication, it may be best to just talk to your employees to get a sense of how they are doing. Even if they don’t admit that they’re overwhelmed, you should trust your instincts and regularly take stock of how the workload is being handled by your staff.
After all, an overworked staff will not be able to handle your business needs properly, which could end up costing you more than hiring new employees.
3. 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. As long as you have a solid business model, hiring new employees to take on new business opportunities should be a win for the organization even if you have upfront costs related to recruiting and onboarding.
On the other hand, there may be special occasions or seasonal events that prompt the need to hire more staff for a limited duration. In these instances, you may want to consider hiring temporary contract work as needed, just be sure you’re aware of the legal considerations that come with hiring temp workers.
4. 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.
It may be the case that as your business needs expand, outsourced tasks become more complex and end up costing much more than if you hired in-house employees who are able to focus on these business needs full-time. As an organization’s specific needs and processes become more critical, the learning curve and dedication of in-house employees can be much more effective than outsourced help.
5. 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—possibly even yourself—are doing administrative tasks that really should be handed off to someone else, it’s probably time to hire.
A great way to determine whether you’re ready to hire someone new is to start by putting a dollar value on your time. Even if you’re the owner and you’re not paying yourself much of a salary to begin with (perhaps you’re even in significant debt), you should have an understanding of your highest value.
If you’re doing tasks that would cost less for someone else to do, seriously consider delegating them to a new employee. Remember, as a business owner or senior-level manager, time spent doing tasks that could easily be delegated to a new employee is time you’re not spending on higher-level tasks that could help your business grow or innovate.
Is it Time to Hire? Find the Right Fit for Your Business Needs
Running or managing a small business requires wearing a lot of different hats and understanding every facet of your operation. Even when you hire staff and delegate responsibilities, it’s important to stay on top of everything. Get expert advice on recruiting, hiring, and managing your employees, delivered free to your inbox.