Hiring a new employee is an investment. Having one more person around to pitch in will likely save money, but it also costs more, and not just because it is one more person on the pay roll. As a business operator, you must ask yourself, ïWill your new hire deliver a return on investment?ï Sometimes the answer is yes, but you need to remember that sometimes it is no as well. A successful employers knows when it is smart to hire and can recognize when one more employee will only lost money. The following short guide is intended to help you gain a better understanding of when to hire and when to improve internally.
Do All the Preparatory Work
Before you do anything, think about why you need a new hire. Have specific reasons. When asking yourself if you need to hire someone, ïIt feels like everyone is working too hardï is too vague of a reason. Instead of needing an extra hand, there may be mismanagement or some existing employees may have been trained improperly. Instead, you should analyze if employees are doing more than one job. In that case, it may very well be a good idea to pursue a new hire to spread work out more efficiently. Remember that in a business setting, demonstrating that hiring is necessary may be more important than analyzing whether it is. Board members and investors want to know that you have seriously considered, ïWill your new hire deliver a return on investment?ï Even if you are confident that hiring is the right action, you need to be able to communicate this confidence and explain exactly what responsibilities and roles a new hire will have.
Calculate All Costs
Once you have decided that hiring would be beneficial, you must now calculate exactly how much money it will cost to hire and how much money can be saved. This is the only way you will know the answer to the question, ïWill your new hire deliver a return on investment?ï It is relatively easy to determine how much it will cost. By looking at existing recruiting and training procedures, you can calculate costs with a high level of accuracy. Of course, you should have an idea of how much the new hire will be paid as well. Determining how much money the investment of hiring will save is a different matter, however, but it is just as important. When hiring for a position that directly influences profits, such as salesperson, it may not be too difficult. When you are hiring for the back office, such as bookkeeping or human resource employees, it becomes trickier to decide how much costs will be cut by adding another worker. After calculating costs, you should always assign an exact dollar value on new hires so you know what needs to be accomplished for the hire to be profitable.
Before you hire, you must also research how you are going to keep costs to a minimum. Taking this extra step shows investors that you are taking this decision seriously and that you are committed to maximizing the return on investing in a new hire. To start, think about how you will do training. If you get an existing employee to train new workers, you can keep costs to a minimum. Additionally, it may not be as efficient to simply add someone into the existing crew. Rearranging roles and responsibilities to better fit the new employee base will almost always be more cost effective.
Do Not Take Shortcuts
The best way to ensure making a new hire is profitable is to take each step seriously. As with any investment, you should minimize costs, but not jeopardize returns. If you take the time to analyze where your most efficient employees come from and choose candidates appropriately, you will know the answer to ïWill your new hire deliver a return on investment?ï It may cost a little more to take your time, but rushing through the process will guarantee that more money is lost. Figure out exactly what kind of employee each candidate will be before you hire. You do not want to have a worker around that will be continuously costing your business money over the years.
To learn more about answering ïWill your new hire deliver a return on investment?ï and other business questions, take advantage of the resources that Mighty Recruiter offers. There are numerous articles on all sorts of business topics to help you run your company successfully.