Here’s how to determine when to hire more employees

We’ve all been there … too much work to do and too little time to do it … or so we think. As a business owner the buck always stops with you. Sure, you don’t mind routinely being the first one in the office to make the coffee in the morning or at times being the last one to leave in the evening. But if you can’t afford to slip out a little early on occasion, or take a much-needed vacation to recharge your batteries, then something is probably wrong.

Confirm The Need

So, is there really too much work to do or is the real problem centered around the fact that there may be too much unproductive time involved? Technology is a wonderful thing, but in today’s connected world it’s awfully easy to get caught up on our smartphones and tablets with personal business rather than tend to the workload at hand. In many cases, productivity measurements can help identify the root cause of the problem. Do you measure your own productivity and that of your employees? If so, great! If not, why not?

Metrics for measuring productivity will not only help you and your employees better understand the business cycle but they can also play a key role in determining the need to hire additional help. A few examples of some simple yet important metrics you might consider monitoring could include sales per employee (monthly and annually), daily/weekly orders processed, daily/weekly orders shipped, backlog of unentered orders, volume of inbound calls and volume of outbound calls. Measuring credit memos written for incorrect or late orders can also be used as a barometer of an effective and productive workforce.

As a business owner, you can and should monitor a number of different metrics. But it’s important to make sure the data and information used to calculate those metrics are reasonably easy to accumulate and assemble. You want to measure the work you are doing rather than create more of it. Post the results of your measurements in the break room or in a common area, some place where all employees can see it. The interesting thing about measurement is that employees tend to perform at a higher level when they can see and monitor their own progress. Use the measurements to set goals. When goals are met, reward employees with lunches, paid time off, gift certificates or some other method to express appreciation for a job well done. If goals are missed, it’s important to understand the causes and reasons for the poor performance. If you do, it should help you make an informed decision about whether you have a productivity issue or simply need more manpower.

Address The Need 

If you find that, no matter how focused you are, your productivity metrics just don’t seem to be improving and you continue to miss key dates and deadlines, and you routinely  disappoint customers, then it may well be time to take hiring action. Each company is different and there’s no magic formula or silver bullet to let you know when the time is right. However, there are some things to look for.

Determine where the need is greatest. In times of rapidly growing sales it may be a customer service or order processing position that a distributor will need to fill. For a supplier it may be additional manpower on the shop floor. In either case, when sales are growing quickly companies will need to hire and train employees sooner in an effort to stay ahead of the curve. Determine if the need is a short-term situation or more likely to be a permanent, long-term need. If it’s a short-term demand, you may want to consider alternatives such as temporary services, mandatory overtime or shift options (for suppliers) to fill short-term spikes in demand. If the need is longer term or permanent in nature, the best option is likely hiring a new full-time employee.

Hiring a new person can be exciting but it’s also an important undertaking, so use care and be diligent when hiring for the long term. Resist the temptation to hire the first candidate who successfully fogs a mirror just because you’re under the gun and feel pressured to get the position filled. Instead, take the time to interview numerous potential candidates. Work hard to find and hire well-qualified, educated employees who have the skill sets needed to perform not only the position they are being hired for but also those who are capable of growing with the company over time. Hiring people who are “promotable” is good for both the company and the employee, and many times will result in greater job satisfaction and longer tenure.

Hiring a new employee will incur budget constraints. Hire the most qualified individual you can afford but remember you must be profitable and make money to be able to afford new staff. If your business does not turn a profit, you can’t pay your employees.

Time of hire is also the perfect opportunity to have new employees execute a non-compete/non-disclosure agreement. At some point, most employees will almost certainly have access to proprietary material and/or trade secrets that have been developed over time within your company. It’s important for the employee to understand that this information belongs to you as the business owner. It cannot be shared with others and cannot be taken by the employee in the event of termination. A clear, well-written non-compete agreement executed at the time of hire will convey these important points to the employee before he or she gains access to the proprietary material. Note that each state differs in terms of enforceability of non-compete agreements so be sure to consult your attorney for advice when creating them.

Manage, Move Over or Move On

Everyone has different professional abilities—some people are very effective managers but lack the sales skills necessary to sell cold beer to baseball fans on a 90-degree August afternoon. Then there are others who could easily sell snow to Eskimos yet don’t have the knowledge or experience to effectively manage people. The point is, once you hire good employees it’s important to retain them. Effective management practices along with job satisfaction are often the keys to retention and low-employee turnover. As a business owner, your employees are your most important assets. If you are either unable or unwilling to effectively manage them, you need to find someone who can.

We’ve seen several instances over the years where business owners have hired employees to run their operations. Many times owners remain involved but in a capacity which allows them to focus on their strengths. In the case of distributor companies, those strengths are typically centered around sales. Supplier companies are a little less predictable, but operations and finance are areas where an owner tends to gravitate when not functioning as president or general manager.

Sometimes simply moving over and allowing someone else to run and manage the business isn’t a good option. As a business owner you may have grown the company to a point but don’t have the wherewithal or desire to take the risk of getting it to the next level. In situations like this it may be time to find a buyer who brings resources to the table so your business can continue to grow and prosper, which should be good for you, your employees and new ownership.

Hiring decisions are never easy. It can be difficult to determine if the need is real or perceived. Timing can also be tricky to nail down. But, with a small investment of time and effort spent on measuring your operation’s output, the decision will likely become  clearer. Once you decide to hire remember to be diligent in your search for the best possible employee you can afford. You want someone who can grow with your company and contribute to its success at all levels. And finally, remember that not all of us are effective managers. We need to be smart enough to know when to step aside and let others manage the company’s most important assets.

John Schimmoller is chief operating officer at Fort Wayne, Indiana-based business services provider Certified Marketing Consultants.

Five Key Considerations When Hiring

1. Make sure the need to hire is real through use of productivity measurements.

2. Determine if the need is short or long term and hire accordingly.

3. Keep budget considerations in mind. You must be profitable to hire new employees.

4. Be diligent when hiring. Take your time, screen many candidates and hire the most qualified person you can afford.

5.  Make sure effective management is in place to oversee new hires and employees in general which will lead to greater job satisfaction and lower turnover.

Communicate to Lead

Improving your communication skills will help put you one step closer to being a leader and getting that position you’ve been eyeing. Lori Bauer, vice president of sales at BIC Graphic, shared these tips during her presentation, Communication: The Art of an Effective Leader, at the PPAI Women’s Leadership Conference in July.

When communicating with those in positions above you:

• Invest in relationship chemistry with your boss

• Lighten your boss’s load when you can

• Do the jobs others won’t

• Know when to push and when to pull back

• Be prepared when you take your leader’s time

When communicating peer to peer:

• Complete don’t compete

• Be a friend to peers

• Avoid office politics

• Expand your circle of acquaintances

• Don’t pretend you are perfect

When communicating with those in positions below you:

• Model the way

• Don’t play favorites

• Explaining the “why” can be an eye-opener

• Provide small awards for achievements