When you are setting up a company, it is essential to hire people to fill specific roles and perform certain tasks. It’s one of the oldest and most effective forms of leverage. If you have 100 people working for you, it allows you to do extremely more than if it were just you by yourself.
Of course, figuring out how many people you need is a challenge. Overhiring drains your budget, while underhiring leads to employee burnout and prevents you from completing the projects that will ultimately push your business forward.
Assess your current workload and capacity
The trick here is to assess your current workload and capacity. Ideally, you want to figure out how your team is handling their daily tasks and what additional team members could potentially augment their work efforts. If you are noticing frequently missed deadlines and consistent overtime, then it is a sign that your team is being overstretched. It’s okay for overtime to be seasonal in the run-up to a big project or a launch, but if it’s occurring all the time, staff turnover is high. This is usually an indication that you simply don’t have enough staffing.
Map out your future business goals
The next step is to think about what you’d like your business to achieve in the future. This will tell you the type of hiring you’ll do. For example, let’s say that you currently run a business with a large call centre operation. In some cases, it may be worth taking on more call centre staff, but it could also be more economical to hire an engineer who can build a customer service AI robot to serve low-priority customers. You can then use a triage system to escalate to human operators where necessary.
Calculate the return on investment of new hires
If you have the ability to calculate the return on investment of new hires, do so. All new employees should immediately generate revenue for the company or save it money in some way.
You should compare the projected value of an employee against the total cost of employment using workforce planning software where possible. Typically, the employee should generate three or more times their annual salary. Generating one time their annual salary creates the revenue you need to pay them. Generating twice their annual salary covers the full cost of employing them. Generating three times their annual salary builds in a margin of safety and additional revenue that they generate, which makes it worth hiring them in the first place.
Identify skill gaps
Lastly, and perhaps most importantly, you’ll want to look into identifying existing skill gaps. Sometimes the issue isn’t a lack of hands, but the specific expertise you require to move your business forward. Often all you need is a single breakthrough or keystone employee that can unlock new levels of productivity for your enterprise as a whole. It’s often worth hiring people with highly specialised knowledge to deliver projects effectively. People who are in the know, especially those who have unique and gated knowledge, can be extremely helpful.
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