You’ve done it all yourself or with a lean staff for so long that you can’t quite imagine adding another person to your payroll. You worry about the expense and the effort required to train a new employee. Yet, with your small business growing as quickly as it has been, you know you need to do something. Is it time to hire another employee? Can you afford to? Can you afford not to?
While the economy appears to be on the rebound, the CareerBuilder 2014 U.S. Job Forecast indicates that only 24% of companies anticipate hiring full-time, permanent employees in 2014. That figure is down 2% from 2013. This suggests that companies are being cautious about adding employees and are taking a wait-and-see approach.
It makes sense — for both you and for any potential new employee — to treat hiring with caution. However, if your company is growing, you need to take a look at whether what amounts to understaffing is actually hurting your business.
Can You Afford to Hire?
To determine if you have the cash flow available to hire, consider your current monthly profit and the additional revenue that could be generated with an additional employee. Subtract from that number the monthly salary and benefits you would need to pay out to that employee, as well as the added tax withholding an employee would require. These are rough estimates, but the higher the total, the easier it is to justify hiring an employee.
Of course, if your calculation results in a negative number, you should look at other options.
Indeed, there are several options beyond creating a full-time, permanent position. They include:
Of course, the type of position you create will depend on the work that has to be done, but these options can provide flexibility now and in the future.
If it is clear that a new employee makes sense for your business, you’ll need to start spreading the word that you’re looking for help. In your advertisements — through traditional channels or on newer platforms such as social media — make it clear that anyone is welcome to apply.
When you start interviewing candidates, ask the same questions of everyone. Avoid questions regarding an applicant’s age, race, religion, marital status, gender, sexual orientation, disability or veteran’s status. Considering these factors in your hiring decision could open you up to a lawsuit.
Be consistent in how you describe the position, the requirements, and the pay and benefits.
No matter what type of position you create now, it's important to periodically evaluate your company's staffing needs. Adding positions to fuel your growing business is a good problem to have.
Insights on the top cash flow challenges business owners are facing today.
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