Is it Time to Hire Your First Employee?
According to the Small Business Success Study, most small business owners are not trying to grow their business. One reason for this is that small business owners are taking on additional responsibilities themselves. However, if you’re finding it a struggle to get everything done at work, it may be time to bring in some reinforcements. But before you start your search for the perfect employee, consider the following points:
- Expenses. Can you afford an employee? Salary and benefits are ongoing costs, but you also need to factor in expenses that will be necessary to equip an employee to do the job you have in mind, such as buying new computers, furniture and other amenities, moving to a larger physical space, plus legal requirements and tax expenses, like unemployment insurance and payroll taxes.
- Time spent searching and hiring. The hiring process involves writing a job description, posting it on boards and search engines and then searching, screening, and interviewing candidates. It can be time consuming. Make sure you can spare that time without hurting productivity too much, keeping in mind the increased productivity you’ll gain once you get your employee in the door.
- Consultants and freelancers. It might be more cost-effective to hire a consultant or independent contractor on a project basis if your needs are not long-term. If you’re looking to grow your business organically, you’ll likely want to bring in a salaried employee to provide more consistency.
- Part-time vs. full-time. This, too, is often a cost-based decision. Part timers require less compensation and benefits and often have scheduling flexibility, but those advantages may be offset by less loyalty and higher turnover, which could increase your training costs. Full-time employees have the potential for higher productivity, more loyalty and solid team unity, but compensation and benefits costs are higher. Make sure you have enough work to justify paying someone 40 hours a week over the long haul.