One of the most common mistakes that businesses make is hiring employees before they’re ready. You think you need staff, but soon after hiring, you realize you’re over your head, the new employee isn’t working out the way you’d hoped, and you’re spending more time cleaning up the new employee’s mistakes, rather than building your business.
To really determine if you’re ready to handle employees, ask yourself these questions:
1. Do you have the cashflow now AND in the future to pay for employees?
Employees are expensive. For many companies, employee wages are the largest fixed expense. If you hire employees, you MUST have the on-going cashflow to pay wages. The last thing you want to do is miss payroll because once you miss that commitment, it is unlikely that the employee will want to continue working for you.
2. Is there sustainable workload for the employee for the foreseeable future?
People want to work in rewarding jobs. They want to know what is expected of them and they want to be able to meet those expectations. Before you decide to hire an employee, you need to create a clear job description – be clear on the roles, responsibilities and expectations you have of an employee. Don’t just hire someone because you need help. You need to be organized in your approach and determine what help you specifically need. Then create a position around those requirements. A foolproof way to de-motivate an employee will be to give him/her work as it becomes available or give them the “joe” work that you don’t want to do yourself.
3. Is there a return on investment for hiring the employee which is greater than their cost?
Will the employee pay for themselves, or free up your time to generate income for your business? There needs to be a return on your investment for hiring an employee. They need to provide an advantage to your company which is greater than the total cost of their compensation. It would not make business sense to hire an employee if they will not save you time or energy, or make you money.
4. Do you have the time and energy to train and manage the employee so that they can add value to the company?
Employees are an investment in your time. If you hire someone, you need to be prepared to spend the time to train them to do things your company way. You not only need the time to train them when they first start, you need to spend time to manage and work with them on an on-going basis to make sure that they are on-track. A surefire way for an employee not to work out is to spend so little time with them at the beginning, and give them so much autonomy, that they end up doing things their way, which may not necessarily be your company way.
A very simple example occurs often when companies hire a Receptionist. They assume that the Receptionist will just know how to answer the phone and greet guests. Without training, the Receptionist will answer the phone however he/she deems appropriate (for instance, “Hi, ABC Company. How are you?”). You may, however, want a more professional greeting (e.g. “Good morning, ABC Company. How may I help you today?”) Without training, the Receptionist will never know. And, given that the Receptionist creates the most important first impression for your company, you want to ensure that the image projected is what you want to project.
5. Do you have a human resources strategy and plan in place to manage employees on an on-going basis?
Once you have employees, you need to ensure that you have the proper systems and plans in place to properly manage the employee. This includes: employment contracts, payroll systems, on-going reviews of performance, on-the-job training, policies and procedures related to vacation, sick time, time-off, handling problems, etc.
Having the proper systems in place will help to ensure that you keep the employees that you’ve spent your valuable time to hire.
If you answer “yes” to all of these questions, you’re ready to hire. If your answer is consistently “no”, you are not ready and need to find some alternative ways to get assistance without hiring employees. If you have a mix of “yes” and “no”, you will need to weigh carefully how you will meet the requirements of all 5 questions over time, while you also undergo a hiring process to find an employee. Best of success as you travel down the hiring road.
Copyright 2008 Clear HR Consulting Inc. All rights reserved.