5 Key Questions: Are You Ready To Hire An Employee?

One of the most common mistakes that small business owners make is to hire an employee before they’re ready. Rushing into a hiring decision can often lead to a huge disaster. The 5 key questions to ask yourself to determine if you’re ready to hire an employee are:

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.

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? 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.

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 are uncertain whether you are ready to hire an employee, please contact Clear HR Consulting for assistance with your hiring process.


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