In large companies, hiring “another employee” has a relatively small impact on the company – its budgets, its work flows, its customers. In a small business, the impact is just the opposite. Every new hire matters. The costs are noticeable, the impact to the team and customers can be significant. Hiring the wrong person can change a team’s momentum.
The mistake of “hiring before you really need to” isn’t a staffing mistake that gets talked about much, but can have the same type of impact – wasting time, money, and risking some disruption in results.
We think the first question any hiring manager should ask is not “Who should we hire?”, but “Do we really need to hire?”
We start every recruiting entake call with that question – what is the business reason for this opening? What results are you trying to achieve? We recommend that before you reach out to a recruiter, you take some time to understand the business need you are trying to solve, the business impact your new hire needs to make in order to be considered a successful hire.
Here’s some questions that can help you with that analysis:
1. What is creating the business need to hire?
Start by identifying what has changed:
- Have you just lost a valued employee? leader?
- Are teammembers consistently working more hours than they would like? Are you paying overtime?
- Are customer requests going unanswered? Opportunities to grow your business being ignored?
- Has the business added some new customers or signed a contract that has some new performance standards?
- Is one of your higher impact leaders (or even your owner or CEO) spending too much time on administrative detail instead of focusing on the future?
- Is someone on your team falling short of expectations? Not delivering the impact you need?
It may seem like obvious point of analysis, ,but your first line of thought should always be to separate out a temporary workload problem from a permanent staffing need. A busy month doesn’t necessarily justify adding another to staff. Six months of your team “over their head” may be telling you something important.
2. Is there enough work for another employee?
Before hiring, look at the actual work that needs to be done. Make a list of the tasks or responsibilities you expect the new employee to perform and estimate how much time that work is going to require.
- You may discover that what initially looked like a full-time position is actually only 20 hours of work each week, in which case you should look for a shorter term or parttime solution, opening up whole new ways of getting work done.
- You also might discover that several employees are actually doing different pieces of the same function, providing an opportunity to combine responsibilities into one position that might make the team or even the entire organization more efficient.
- Or how about that job where you’ve always had turnover. Could it be re configured to provide more opportunities for success, ways to build in more job satisfiers for the right candidate?
This exercise, breaking a job down into its most important responsibilities, will not only give you a chance to reconfigure work, but help you create a realistic job description when you eventually start recruiting.
3. Is adding an FTE the only option?
Adding an employee isn’t the only way to increase your capacity to get work done. Before hiring, ask whether the work could be:
- Eliminated because it no longer adds value
- Simplified by changing a process
- Automated using technology or AI
- Reassigned among existing employees
- Outsourced to a specialist or outside service
- Handled on an interim basis by a temporary or contract employee
- Covered by a part-time employee rather than a full-time hire
Lots of business get into a hiring mode as a way to fix an inefficient work process. Fixing the process may be considerably less expensive than adding another FTE to the team.
4. What will this employee cost?
Salary or hourly pay is only part of the cost of being an employer. The employer incurs lots of hidden costs for each employee over and above their direct pay – payroll taxes which in Washington State are 12-13% of the workers direct pay, state mandated and voluntary benefit programs, paid time off, the costs associated with recruiting, providing and maintaining equipment, software, and workspace, the costs of employee training, supervision, and management.
A great question to spark your cost analysis might be. – What additional revenue, productivity, capacity, or risk reduction does this employee need to generate to justify the total cost of the position?
Every hiring manager should understand the real economics behind a new hire so that they can make the right business case to support the decision to add to or even replace departing staff.
5. What will happen if we don't hire?
This may be the most revealing question of all. What would happen if you postponed your hiring decision or put it on hold for another 3-6 months?
- Would customers receive worse service?
- Would you have to turn away business?
- Would existing employees burn out?
- Would important projects continue to be delayed?
- Would one of your leaders have to continue spending 15 hours a week doing work that someone else could do much less expensively?
Sometimes the strongest business case for hiring isn’t simply that you have more work – it’s that not hiring is already costing you money.
6. Are we hiring for today's problems or tomorrow's business?
Small businesses often make hiring decisions based entirely on today’s workload – dealing with the here and now. . We don’t object to that pov, but we also think a good hiring decision should make sense for where the company is going.
If you expect the business to grow, think about the skills you will need six months or a year from now. A position that solves today’s problem but can’t grow with the business may simply create another staffing problem down the road. This doesn’t mean that you should hire ahead of your needs, but to make sure your hiring decision today supports tomorrow’s business strategy.
7. What does hiring success look like?
Before recruiting anyone, we recommend you have an answer to one final question:
What would have to be different six months after this person starts for us to say, “That was a great hire”?
Maybe customer response times have improved. Overtime has decreased. Your business owner has another ten hours a week to spend developing high impact strategies. Sales have increased. Orders are processed faster. Errors have declined. Morale is up.
Those outcomes become the foundation for defining the position, selecting candidates, and eventually measuring the employee’s performance.
We always ask our clients in our entake calls to describe the RESULTS their new hire needs to achieve in order for them to believe they’ve made the right hire?
Final Thoughts...
For most small businesses, hiring decisions are too important to just launch a search with an outdated job description. We think the right analysis starts with questions about the business.
Identify the problem. Measure the workload. Look at alternatives. Calculate the real cost. Consider the cost of doing nothing. Then determine what skills and capacity the business actually needs.
Once you’ve done that kind of analysis, there is a chance you may decide you don’t need to hire at all. But if the answer is we need to hire, you’ll be in a much better position to know what kind of employee you need to hire, what you need them to accomplish, and why this particular investment in people makes business sense. And that’s a great place to start your hiring process.
How Can PACE Help?
PACE helps small and mid-sized employers find the “just right” staffing solution—from temporary and contract staffing to temp-to-hire and direct-hire recruiting. When you’re not sure whether the next step should be hiring, adding flexible capacity, or redesigning the work, we’d like to be that staffing partner who can help you think through your options.
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Before deciding to hire, how often does your organization step back and evaluate alternative solutions? We'd love to hear how other employers approach workforce planning, staffing decisions, and hiring strategy.
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