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Published on June 24, 2022

When To Hire In Your Small Business (A Step-By-Step Guide)

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When To Hire In Your Small Business (A Step-By-Step Guide)

For many small business owners, profit margins are not what they used to be. At least one outworking of these ever-thinning margins is a growing reluctance to hire additional staff, even when the need has become evident.[1]

Balancing your bottom line against increasing worker fatigue is always tricky. Knowing exactly when to hire in your small business can elude even the most discerning managers.

Prospective employees are also bringing a shopping list to interviews as they increasingly demand “finding the right fit” for them. How is a small business owner to know when to hire or even how to engage in such a vastly altered landscape?

Some Benchmarks on When to Hire in Your Small Business

Of course, the small business owner who is exclusively focused on the bottom line for deciding when to hire will miss every boat that sails past.

Yes, asking yourself whether you can afford to hire additional staff is common sense and should be your top priority. However, the migration of commerce to online retailers has added a few wrinkles you must iron out.

When Is the Right Time to Hire Additional Staff?

I’ve already mentioned thinning profit margins and the tendency to postpone adding additional staff as long as possible. But you also don’t want to delay so long that your existing team gets fed up with the pace of an increased workload and bails out.

Your investment in gathering helpful information does not need to be countless hours of supervisory oversight. Instead, implementing four primary practices as a regular part of operations can help sound a “trigger warning” when the time to hire might be at hand.

1. Guard Your Team Against Ever-Shifting Job Descriptions

Back when you hired one of your historically most reliable staff members, they knocked down every obstacle placed before them. As a result, you kept adding and adding to their responsibilities.

However, you might also be unwittingly contributing to worker fatigue and burnout.[2] Sometimes, this even happens with staff that is genuinely enthused about taking on new challenges.

Periodically just glancing at your current team and asking yourself why you hired them in the first place can bring tremendous insight.

Nip worker fatigue in the bud by setting aside consistent, scheduled time for informal, one-on-one meetings.

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How often and how long meetings will be will depend entirely on your business model. You might decide to go with weekly meetings of 5 to 10 minutes or lengthier review sessions every month or quarter.

If you aren’t touching base with your people regularly, it’s time to start.

Also, ask your managers to sign off on company job descriptions intermittently. This can be informal (quarterly emails, for example) or face-to-face reviews. The bottom line is that you want to keep tabs on workload and qualifications.

Are your people still doing what you hired them for? Have their daily assignments shifted, perhaps imperceptibly? Document, document, document.

2. Consider Staffing Changes When Implementing Any New Technology

It may be somewhat embarrassing, but more than one small business owner has gone “all in” on a new piece of technology or software without pausing long enough to ask a simple question:

“Which of my existing people will operate—and maybe even be called upon to troubleshoot—this new technological marvel?”

Few things will cause more stress than asking existing staff to operate a new device or piece of software that is unfamiliar. Tread carefully as unique needs arise.

Maybe this is the time to add a part-timer with specialized skills or delegate this new responsibility while simultaneously taking other tasks off someone else’s plate?

Before your company makes any significant investment in technology, ensure that part of your due diligence includes talking to other trustworthy business owners who have already taken the plunge. While they may not have purchased the same brand or model you are considering, they can certainly offer insights you may not have considered.

Also, whatever you do, don’t rely solely on web-based reviews or ratings. Make sure you talk to real, flesh-and-blood users, too. Be sure to ask specific questions about team morale before and after the implementation.

Yes, this research will require more of your time upfront, but it can save you the higher costs of hiring and turnover.

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3. Prioritize Seeking Feedback From Your Longtime Employees

There are many reasons why ignoring or dismissing feedback is potentially disastrous. Brushing off “we need help” comments as encroaching laziness may be tempting. However, at a minimum, you should take the time to evaluate this sort of feedback carefully.

Has this particular employee been prone to complaining in the past? Have you previously noticed them not having the best interests of your business in mind? Perhaps more to the point, have multiple staff approach you with the same sort of feedback?

If you’re the lone holdout on a need to hire for your small business, it’s time to hit pause and do a bit of soul searching. This is where your daily, weekly, monthly, or quarterly bull sessions with staff will pay off.

You already have enough information to put together a draft proposal for hiring someone new. Position this draft as “something we are considering for the future” and pass it around to those employees likely to be most affected.

Once you’ve honed the job description to something that seems manageable, there’s one more thing to do before posting it to LinkedIn or Indeed.

Take a quick look at salary and lifestyle expectations for job seekers in that niche. Can your company compete against other employers in your geographic area and industry? If not, it might be time to look for staffing alternatives.

4. Be on the Alert for Changes in Customer Demographics

Perhaps your small business’s product or service appeals to a particular market niche. That being the case, has the median age range of your average customer gone up or down? Have changes in the local community resulted in a different clientele than previously?

Over time, even incremental changes in your customer base can give rise to an almost-imperceptible increase in how hard your existing staff is being asked to work. Typically, if you wait until lines at the register are stretching out the door, you’ve already lost longtime customers.

Of course, any increase in sales is excellent—until people start hitting the exit.

Assuming that your business has any sort of web presence, your first step for noticing demographic shifts is to dive deep into your website analytics.

For example, if you are using Google Analytics, you can easily create custom reports based on user demographics and have these automatically emailed to your purchasing team. Don’t expect your team to go out looking for information.

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Your next step is to compare and contrast user demographics against actual sales.

For example, increased urbanization may be changing the needs of your local community. Online interest may not translate to real-world dollars and cents.

Of course, it can only help to connect with local business associations, reputable realtors, or chambers of commerce, too. Information will be your best friend as you seek to stay ahead of any shift.

How Is Hiring for Small Businesses Unique?

Many small business owners still make a categorical mistake when evaluating applicant resumes or portfolios. They can easily give applicants little more than a cursory glance before deciding who they want to interview.

The underlying assumption is that the most qualified candidates are always the best. That’s often true, but not always.

For example, someone who looks great “on paper” might only be looking for a paycheck until they can move on to bigger and better things. More prominent companies can weather frequent staff turnover far better than small businesses.

When hiring for your small business, try to consider factors that contribute to long-term success. Does the applicant have roots in your community? Are they willing to join your mentorship program[3]‍?

It’s always easier to spend some time training a less-than-perfect applicant than to invest time, effort, and expense in a job hopper.

How Can Small Business Owners Spot Suitable Applicants?

Of course, word-of-mouth is probably your single best tool for evaluating someone’s suitability. If the applicant has worked in other small business settings, take the time and effort to call their previous supervisor. Even better if you already know their former boss!

Even if you really, really like the applicant, make the phone call anyway.[4]

The other characteristic to look for is a genuine interest in what your business produces and an intrinsic desire to learn more.

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It can be eye-opening to introduce applicants to longtime staff and then leave the room. Consider giving applicants a chance to interact informally with other trusted team members without your oversight.

Additional Hiring Tips

Anytime you hire anybody, there is always a risk that you will spend a lot of time training them only to lose them to a better position elsewhere. That’s just part of the game.

However, when you demonstrate an authentic interest in positioning your staff for individual success, they will be far less likely to take their talents elsewhere.

In today’s market, it will help immensely to treat every interview as a two-way street. Many managers still make the mistake of believing that the assessment is one-way.

Asking two-way questions, such as “Does this sound like something you’d be interested in?” or “Has this interview raised or lowered your enthusiasm?” can help. It signals to applicants that you are not merely viewing your staff as task-completing drones.

When you hire for your small business, you plan to invest in your new hires.

Never Enter the Hiring Process in a Hurry!

Lay the groundwork for your next hire while all is well, and your small business is purring like a contented kitten. This is where you want to combine your long-term personal goals with those of other employees.

Yes, you want your business to thrive, but that can only happen when you are prepared to help your people do likewise.

Featured photo credit: Blake Wisz via unsplash.com

Reference

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John Hall

John Hall is the co-founder and president of Calendar, a leading scheduling and productivity app that will change how we manage and invest our time.

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