Particularly at this time of year, as business begins to thrive during the summer months, you may be considering hiring a new employee. Hiring more staff can lead to greater productivity within your team (if your current employees are struggling to manage the workload), can bring new skills to your workforce and can allow you to scale up the business. However, due to the high cost of the hiring process, there are many considerations that should be taken beforehand. If you have been considering hiring a new employee, this summary of the top considerations that need to be taken will hopefully determine the appropriate course of action for your business.
First of all, consideration must be made to whether you can afford a new employee for your business. Not only will you be faced with the additional costs of their salary, national insurance and benefits, but there are also further costs that you may not have considered.
- Training costs – Employers often forget about the cost of training employees, which is estimated to be around £1068 per employee.
- Office space and equipment – When you hire a new employee (who isn’t replacing an employee that has previously left your organization), then you may be subject to significant costs to set up their workspace, such as computers, software, desks, phones etc.
- Sick pay and holiday cover – When your employees are sick or book time off, you may be required to pay for your employees leave, as well as to pay for cover of their role during their absence. Costs such as these could negatively impact your bottom line if they are not accounted for.
Before deciding if you can afford to hire a new employee, it is important to factor all of these costs into your budget to avoid financial strains or stresses.
Is a new employee necessary?
It is important to distinguish whether it is necessary to hire a new employee, or whether this is a temporary spike in demand which is manageable for your workforce. Hiring a new employee may be necessary if…
- Your employees are overworked – if you employees are more tired or stressed than usual, then they may begin to make mistakes which affect your business and its success.
- Unable to expand – If your lack of staff has resulted in you being unable to expand or prevented you taking on new opportunities, then your staffing issue may be prohibiting your future success. If this is the case, hiring a new employee would be arguably a positive option for your business.
- The spike in demand has occurred for a significant amount of time – If the spike of demand within your business has been occurring across the past few seasons, this could suggest that the increase is not just fluctuations and potentially a long term increase in demand. Therefore, you may need new staff to meet demands and encourage business growth.
Can you outsource?
Depending on the skills you require, you may want to consider outsourcing the role you wish to fulfill. Outsourcing provides a flexible option which could be useful to handle fluctuating demand, with a professional who is already experienced within that field. You could also benefit from outsourcing due to…
- Lower costs – it can be significantly cheaper to outsource a role to a professional rather than to hire internally someone with the same experience.
- Focus – Your employees can focus on the critical factors for your company’s success, rather than using valuable time and resources on less essential tasks which could be outsourced to experts within that field.
However, outsourcing may not be the best solution for all required roles. If the role could be fulfilled better in house, or is crucial to your businesses offering, then outsourcing may not be the option for you due to the risk to your organizations success.
Can you hire internally?
Finally, if after answering these questions you determine you do still require your new employee, you may want to consider hiring internally. Promoting one of your current employees into the new position can benefit your business as…
- Cost – Significant time and money is required when searching for a new employee, therefore you may want to consider accessing your current employees to determine if any have the potential to fill the role.
- Performance history – You will have a full and clearer understanding of your current employees performance history, rather than taking a risk on an unknown external candidate.
- Increase job satisfaction and loyalty – Demonstrating that there is the opportunity for development within the business will increase employee satisfaction and loyalty, as they understand their efforts will be rewarded.
- Company culture – The employee will already have an understanding of the company culture and the expectations placed upon them.
However, this may not be beneficial if your company is looking for new skills or a fresh set of eyes over the organization’s processes. Therefore, it is important to consider what you want from your new employee before you decide to hire internally or externally.
We hope that this list of considerations will help you with your decision. If you have any further questions, such as whether your business can afford to hire new staff, or what is the most financially beneficial option for you, please get in touch with one of our team today – we will be happy to help.