When hiring employees, do you follow the "just enough, just in time" paradigm?
If so, you could be stunting your organization's growth.
Conventional business advice says you should expand your team when your business trajectory justifies it. Say, for example, your business has picked up due to an influx of new clients. The demand for your products or services has increased, and your existing employees are struggling with the additional workload.
And even then, you should make sure the uptick isn't temporary or a fluke. At least, that's what some experts say.
So you accept the fact that you have to keep overworking yourself and current staff, until you can afford to hire more people.
The Opportunity Costs of Waiting to Hire
But that way of hiring doesn't take into account the time it takes to find the right people, onboard them, train them, and get them up and running.
According to the Society for Human Resource Management, time-to-fill (the number of days from opening the vacancy to having a candidate accept an offer) varies by industry, from 26 (retail) to 51 days (government).
Almost two months just getting a warm body into the seat!
How much longer will it take for the new hire to actually become productive? In a survey by the Institute for Corporate Productivity (i4cp), 75% of the respondents said time-to-optimal productivity ranged from 12 months to two years.Opportunities won't wait that long.
Not only are you missing out on opportunities, but you're also letting problems escalate. Order fulfilment is delayed, customer service issues rise, and employees are increasingly stressed out and exhausted. Things will only get worse until you get your team in place.
At that point, you're more likely to make hiring mistakes. You're desperate, after all, and desperation is never a good place to make decisions from.
Why You Need To Hire For Growth
If you want to build a world-class organization, you need to invest in hiring before you need people.
Build your staff today for the organization you want to have in 3 to 9 months.
In Good to Great: Why Some Companies Make the Leap... And Others Don't, author Jim Collins says, "first get the right people on the bus (and the wrong people off the bus) before you figure out where to drive it."
In other words, it takes an infusion of fresh talent, experience, and perspectives to grow your business.
Tribe of Zero summed it up perfectly when they said, "hiring more staff for your small business might actually create the burst of growth that you've been waiting for. More employees will enable you to tackle more tasks, expand your audience reach, provide higher quality service, and generate new ideas."
Isn't Hiring Now A Leap of Faith?
Some of you may be thinking, "but I can't afford to hire employees yet."
People think they should hire out of cash flow. They think, "If my net profit is larger than the salary, then I can afford to hire someone."
The math's all wrong.
Instead, look at your financial reserves for the next 90 days. If you have the means to cover the salary for 90 days, and in that time you're able to grow the business to a point where you can cover the cost of the new employee, then go ahead and hire.
Of course, you better have a plan for exactly how the new hire is going to help you drive the kind of growth you envision. If not, then you would be hiring just for the sake of hiring.
And that's not at all what I'm talking about here.
Hiring is one of the inputs to business growth, not the result of it.
Give It A Try
Where would you like your business to be in 9 months, 12 months, or 18 months? What would your team look like then? Forecast your hiring needs.
Next look at your reserves and resources: which new positions can you cover in the next 90 days? Take it from there.
The question isn't whether you can afford to hire new staff, but whether you can afford not to.