If your organization is like many in the U.S., you have been doing more with less over the past few years. Running a lean operation is good, but eventually you reach a point of diminishing returns, especially if your business is ramping up for expansion. It may be time to invest in additional staffing resources … but how do you decide? We recommend you ask yourself the following five questions to get to the right decision.
Question #1: How’s my current staff doing?
Ask your managers how their teams are doing. Are staff members keeping up with their to-do lists and meeting all their deadlines? Are customers receiving the quality they expect from your products and services? Is there bandwidth for process improvement initiatives, customer service enhancements and product innovations? Are your people getting burned out—are they putting in excessive overtime hours and missing vacations?
If your staff is struggling to keep up with the current workload and your top performers are getting frayed around the edges, you can be sure your company isn’t operating at an optimum level. Something’s got to give. But is increasing headcount necessarily that something?
Before deciding that adding staff members will provide the help struggling teams need, review current employees’ performance to determine whether there are weak links. Poor work product, poor attendance and poor attitude—all are good reasons to replace an employee. And it can be every bit as effective and much less costly to replace a sub-par employee as it is to augment the team.
Question #2: Does my business need specialized skillsets my staff doesn’t currently have?
It could be that your Java programmers don’t have the chops to program the mobile apps you’re planning to add to your offerings. It could be that your business has outgrown your office manager’s capacity to handle the bookkeeping. It could be that regulatory requirements for your industry have changed and new qualifications or certifications are needed.
If your current staff doesn’t have the skillsets needed now, first consider whether it makes sense to develop such skills internally through a training or certification program. If this is time- or cost-prohibitive, or simply not feasible, it’s probably time to recruit for the talent you need—either by bringing on a permanent employee or by using a staffing agency to find a contractor that can fulfill the requirements of a time-limited project.
Question #3: Can our current level of business absorb the cost of increasing the headcount?
To determine whether hiring is a viable option, compare the associated cost with your current and projected revenue. In addition to the (hopefully competitive) salary or hourly rate you will offer a new hire, you will need to budget for additional expenses. For a permanent employee, these include onboarding, taxes, benefits, unemployment insurance, and workers’ compensation. For a temporary or contract worker, you will likely pay staffing agency fees.
Question #4: Do we have the infrastructure to support additional team members?
Is that new hire going to have to share a one-person cubicle with the two other people? Do you have the equipment they need to hit the ground running—a computer, internet access and telephone, any manufacturing equipment or tools? What about office furniture and supplies? Do you have procedures and training in place to bring the new person up to speed quickly? You’ll get the most value from your new hires if you are prepared for their arrival.
Question #5: Are we experiencing ongoing staffing pressures, or is the need short-term?
This is the “do I hire a permanent employee or a temp/contractor” question. If you are in a temporary uptick such as a busy summer season, or if you are unsure of your long-term need for new staff members, it probably makes sense to augment your staff with temporary or contract workers. If your business continues to grow, you can make offers to your temp/contract hires for longer contracts or temp-to-perm.
(Our upcoming May 24 newsletter article, “Temp/Contract versus Direct Hire,” gives you the low-down on pros and cons of these hiring approaches.)
If your corporate culture has crossed over from energetic to frantic and your workers have moved from dedicated to workaholic, chances are it’s time to bring in reinforcements. This is a good problem to have! Just be sure you go through the thought-process and preparation to gain the full benefit from your growing team.
Are you looking at hiring? What questions would you add to those we’ve listed here? Tell us about your experiences augmenting or replacing staff.