Since running a startup is a constant balancing act, assessing just when to invest in hiring more employees can be tricky. As you work on scaling your business and reaching profitability, it's best to run as lean as possible. With labor accounting for 50 to 60 percent of business costs, hiring more people isn't exactly "lean." In this guest post, Bob Cerone, CEO of Cognos HR, shares his insights on when its best to start expanding your team.
Guest Author: Bob Cerone, CEO, Cognos HR
If you’re experiencing classic signs that it’s time to hire (stressed or overwhelmed employees, missed deadlines and opportunities, everyone feeling like they're constantly “slammed”), you probably do need more help.
The question is: will hiring more full-time employees solve the problem?
Here, I’ll outline a process for answering that question so you can confidently decide on the solution that’s best for your organization.
Step 1: Think Globally, Learn Locally
Take a step back and consider your business as a whole – try to get above the daily tasks you do to stay above water (easier said than done), and focus on big-picture stuff like your product roadmap, market trends, and your vision for the next 12, 18 and 24 months.
Next, talk with your employees. Ask them what’s going on day to day – where they need more support, what’s not getting done, where they believe your organization is failing, etc. Encourage them to be as honest as possible and share the context behind your questions. The goal here is to get enough information to complement your high-level view with some on-the-ground perspective.
Then, talk to partners. Talk to your board. Talk to your advisors.
Don't shy away from asking for help or advice as the stage that you're in is one that every growing organization has been through. When you approach your work in a thoughtful and organized manner, you demonstrate a heightened sense of awareness and solid leadership to those around you..
The goal of these conversations is to build support and get additional perspective on where you are right now, where you’re heading, and what it might take to get there.
Step 2: Look at Inefficiencies from Several Angles
Sometimes, the problems leap out when you talk to your team. But the solution is not always as obvious.
For example, maybe the employee handling customer service is a “people person” and he’s passionate about your product – but he’s slow with email communications and not the best project manager.
As the backlog of customer emails grows, the employee becomes overwhelmed and procrastinates, causing your organization to lose customers due to lags in response time. Before you look to hire another customer service rep, ask yourself if you could...
Restructure your customer service workflow to better-suit your current employee’s strengths.
Invest in software to help the employee.
Shift some responsibility to another employee who is equipped with skills that are more suited to the job requirements.
The intent here is to think critically about problems and solutions. The practices that worked when your organization was small can become cumbersome as it grows, so don’t be afraid to question the way you’ve always done things and shift gears as needed.
Step 3: Make a List of Solutions and Evaluate Your Options
Once you’ve identified areas that need improvement, consider the various ways you might solve them. Typically, these include…
Introducing new software: Could automating or streamlining manual processes (via chatbot, communication and scheduling tools, project management software, etc.) save you enough time so you don’t need to hire someone quite yet? If so, new software is probably a smart investment.
Working with a consultant: We observed a situation where a client was considering hiring a sales manager to build a new sales program for their organization. After reviewing several options, they instead decided to hire consultants to evaluate their current state and work with leadership to put together the processes and documentation needed to improve the consistency and performance of its salespeople. The consultant’s fees were less than an ongoing full-time salary would have been and the results were delivered faster.
Outsourcing work to an individual contractor: With websites like Upwork, it’s easier than ever to outsource work that you can’t handle in house. Of course, hiring and managing individual contracts can bring its own set of challenges including, time spent vetting, training, quality control, etc..
Outsourcing to a service provider: For larger, ongoing tasks that require expertise you don’t have and/or come with risks for getting things wrong (HR, database management, payroll, SEO, etc.), outsourcing to a vetted and trusted partner can be a cost-effective choice. Doing this means you should get access to deeper expertise for less than what it would cost to hire in-house.
Hiring a part-time employee: Lots of people want part-time hours – stay-at-home parents, students, artists, recent retirees. If you can make this arrangement work, it can save time and money while building a lasting relationship with someone in-house.
Hiring a full-time employee: If, after vetting your options, you determine that a new full-time employee is the right move, then your next step is making sure you’re setting them up for success.
Step 4: Set Your New Hire up for Success
Once you decide to pursue a full-time hire, it’s important to be clear-eyed about the realities of hiring a new person into a fast-growing and rapidly changing organization. In addition to thinking of how that new hire will fill your current needs, think about the things that you need to do to help that person feel supported and successful in their new role.
There’s nothing worse than feeling like you’re failing in your first few months at a new job. To put yourself and the new employee in a place to succeed, be realistic about timelines, set clear expectations, and ask relevant questions such as:
What tools and resources will they require?
What will they have to learn about your industry and business?
Will they have to create new infrastructure and processes? If so, how can you support that process?
How can you expedite their transition so they start contributing quickly?
When someone is hired into a newly-created position at a startup, it’s difficult to avoid the phenomenon where new hires essentially have to build the bridge as they cross it. With this in mind, commit to giving your new hire the time and resources they need before you start adding more to their plate.
This takes discipline but it will help your new employee stay focused and build confidence in their first 90 days. Follow this approach, and it will pay dividends back to your organization over time.
When you know a full-time hire is the right move for your business, check out our last post, What Makes a Good Hire for Startups.
Interested in contributing a guest blog? Share your ideas with us by following this link.