When to hire a full-time employee.
Running a business is not easy. At the beginning you need to everything yourself, which is of course very time consuming. It also takes you away from the more important tasks, like running the business itself. At some point, all businesses need to hire employees and delegate parts of their workload to ensure that they can focus on what the business owner really needs to focus on.
Hiring comes with a lot of its own complexities as well, such as deciding whether to hire full time, part time, contractors or outsourced staff. Getting the right decision will affect the cost to your business, your cash flow, and how you can growth the business in the future.
Positives of hiring full time.
As a full time employee, you can schedule and use the human resource as you need to, knowing they will be around, and they have a commitment because of vacations, benefits and other perks of being a full time employee. Given that they are always around, it is easy to schedule work, invest in training, develop their skills and more.
You also have the ability to build up a company culture with full time employees, as a full time employee is there for more than just getting a salary. They are there to grow professionally and gain new skills as they work. When you start hiring full time employees, you can set the company culture moving forwards, training them about how things operate, how they should work and what is expected from them.
Another large benefit is that communication is simpler. With full time employees, they get to become aware of a lot of aspects of their job as well as the widercompany. The need to formalise details about the jobs or process is less important.
Cons of full time employees
Full time employees are generally a large cost to the business, as you have to pay their salary, associated tax and their benefits. These costs really adds up, so you need to be sure that you can deliver and cover the cost of the employee. As well as the large commitment you make to the employee, if the employee does not turn out to be a good worker, the process of termination is complex and time-consuming.
You will need to handle sick time, down time, as well as management time. Full time employees have committed to the business and work takes up a large amount of their time, so they are invested in you and your business, which means a greater amount of management as well as entertainment.
Hiring part time, independent contracts and outsourcing all have their pros and cons as well. With these type of staff, it needs to be viewed more as a plug and play situation, which means you will need to be more organised with training, process and requirements of the job. As employees come and go, they can be revenue generating in the shortest time possible.
You need to be able to track and monitor them to ensure they are delivering to the expected rate that you desire.
But on the flip side, as a small business you have greater control over your cash flow, who and when to hire, as well as hiring the right skills when you need them. In many cases you have a workload which requires multiple skills, but hiring full time will limit the work to a single employee. When using alternative labour sources, you can divide that workload up in to specific tasks and assign to the best people.
As part of growing a business, it is probably going to be the hardest aspect deciding how to hire, who to hire and when to hire. It’s catch 22 – you need staff to grow your business, but you need your staff revenue generating so you can cover the cost and pay for their expenses.