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Is it time to grow your business?
Determining if you need to hire is one of the most important functions of a Human Resources department. But, even more than this, is the importance of proactively hiring. Proactive hiring allows your business to have the right candidates, in the right roles, at the right time. Planning or anticipating human resources needs is critical to the success of a business especially over the long term.
If you are able to effectively anticipate future business needs by analyzing the demands of your business and then executing on these needs you will have a competitive advantage over the vast majority of employers who rely on reactive hiring.
The truth is, establishing the right time to hire is crucial for your business and its growth and development. If you hire too early, you will be wasting money on an employee who has nothing to do. With the added bonus of managing a person while simultaneously stressing about business growth.
Conversely, if you hire too late, you risk losing out on the opportunity to onboard and train your employee during a period of relative stability and risk working yourself to death to compensate for the lack of help. Plus, there can be an added loss of opportunity, and potentially business/customers.
So how do you effectively plan?
Develop or refer to your business plan: A business plan is the blueprint for your business. It should contain short, mid, and long-term objectives, including ideas about growth, new services/products, expansion, and new markets. Having a clear idea of where you want your business to go will help determine your employee needs.
Sales/Production Estimates: By monitoring your sales and production, estimating future needs, and referring to your historical data you can determine whether or not you need new employees.
Expenses/Budget: Whether you have a surplus of cash, a boost in sales, a new contract, your available financial resources should contribute to your HR plans.
Business Change/Expansion: If you plan to pursue new markets, expand your business, or merge with another company chances are your employee needs will change.
Know your Workforce: Knowing when an employee is retiring, is pregnant, attending school, moving overseas, quitting/resigning (hard to predict), or when you plan to terminate an employee will help you plan our HR requirements.
If you refer to these steps you will have a reliable system to anticipate and project your employee needs. Of course, it will be hard to predict to absolute certainty your future needs but with systems in place you can mitigate a significant amount of risk. In addition, having a clear process will also assist you in determining when you need to reduce your workforce.
There are also signs to demonstrate when you MUST hire. This is often called reactive hiring and it is important to try and avoid this type of hiring. Because, not only do you have to deal with the added stress of needing a new employee you have to commit time to sourcing, screening, and selecting a new candidate.
Here are a few red flags that can serve as a wake up call and that lead to reactive hiring:
1. The amount of work/time you or your employees put in is increasing at a rate that isn’t sustainable: Sacrificing a weekend, a night, a get together, a family dinner, etc. These are sacrifices entrepreneurs have to make. Sacrificing every one of these as an entrepreneur or expecting your employees to do so is a clear sign your business needs help.
2. Productivity/Quality is suffering: If you find that the quality of the product/service you provide is lessening or that the production you need to fulfill demand is not being met, chances are you need to consider hiring a new employee.
3. Trying to do everything: An entrepreneur is generally an expert in a couple of things and good at many others. However, when you or your employees spend a significant amount of time on areas where they don’t excel, your business suffers. As a business owner learning social media, customer service, logistics, correspondence, and the like isn’t always feasible especially if you want to focus on growing your business.
4. You can afford to/you can’t afford not to: Either of these have implications. If you can afford it, it usually means your business is doing well, you’re making money, but you want to make more. In this regard employees are integral to growth.
On the other hand, you can’t afford not to. You are getting bad reviews, you are losing customers, you’re turning down work, you’re working too hard, these problems are generally because you do not have the support you need to focus on the fundamentals of your business.
5. Fear: Sometimes the things you want to do the least are the things you have to do the most. Giving up control, letting go of your work, and trusting others is very challenging. Whether you have zero or 30 employees you have to learn to trust others or your business will never expand. Often, when entrepreneurs approach me and tell me they are afraid to hire I know almost immediately that they probably need help.
6. You’re missing growth opportunities: When businesses and entrepreneurs are too burdened by their workload they lose out on opportunities. Whether it’s a missed meeting, conferences, or an ill-prepared sales pitch your business will begin to lag behind in growth.
7. Workforce Changes: This is one that is harder to predict and a reality of having employees. If someone quits unexpectedly, is ill, dies (hopefully this never happens) you will be forced to react to their absence.
Deciding whether or not you need to hire is a vital aspect of owning and growing a successful business. Implementing proactive hiring systems will enable you to more effectively hire the right people at the right time.
While it is ideal to be proactive, chances are situations will arise when you need to be reactive as well. But, either way, don’t be afraid to hire! Mistakes are an important part of learning, growing, and improving your business. You won’t grow without help so letting fear and uncertainty control your decisions will undermine your success.
Besides, if you contact us or purchase our Mastering Recruitment workshop, you will be prepared to find top prospects for your business in a way that gives you an advantage over your competitors.