Hiring people is one of the most important steps in growing a business to its full potential. It’s the cornerstone of expansion, but it can also be unexpectedly complicated.
Hiring people brings with it a great deal of responsibility. The fate of your employee is now tied, to an extent, to the fate of your business. Likewise, you may find yourself dealing with employee welfare and health. In order to grow a business however, building a team is essential, so it’s important to tackle the challenges that come with hiring.
The Reason Hiring Should Be A Priority
Internet’s solopreneurs might be tempted to wear all the hats in their business for years. Whether we’re talking about a YouTube channel, a successful blog, an ecommerce site, or any other online business, all of these usually start small. If not with a solopreneur, at least with a small team of people that share in the gains and losses equally.
This model can work for a while, for sure. It’s how most businesses get started. But it’s an inherently limiting company structure and there’s only so far an individual can take a business without bringing others onboard.
Hiring people means taking off some of the load from the owners’ tasklist. In turn, this lets them focus more on new ways to grow their business, like an innovative product, updated features, or new marketing campaigns and strategies. But hiring doesn’t just have to be about growth. It can also be about heading off problems before they arise. An assistant manager that takes care of the paperwork 4 hours/day can be the difference between a happy entrepreneur, and burnout.
Plus, depending on each person’s individuality, these can also be considered benefits:
- Rapid growth & the opportunity to expand to new markets.
- More time off to enjoy personal life.
- The opportunity to work in a broader team.
- The chance to create a vibrant company culture.
- The chance to practice coaching with more people.
And many more.
These are all reasons why hiring should be a priority. So why do so many companies don’t do it when the time is right? It’s usually the same anxiety most new owners feel when hiring people. But the benefits far outweigh these risks.
The Statistics Behind Hiring
Recruitment is not a simple process. The average job post gets 250 applicants. That’s a lot of CVs to filter through, so when deciding to hire new people, businesses should be ready for the process.
And the people that send these resumes have expectations. Qualified prospects are far more likely to apply to businesses with reputable brands, and diversity matters to 76% of them.
But it’s worth it. Engaged employees stay loyal, drive innovation and help companies stay profitable, even when the going gets rough.
So hiring is important. But when is the right moment to do it?
When Hiring Becomes Profitable
Here’s a really short answer: companies should hire more people as soon as they can afford it.
That threshold is different for different companies. For example, a freelance software developer can start hiring help as soon as they’re making over $2000 a month. An established software development company could only look to hire more help when they can afford to pay a $6000 salary plus benefits.
So “when they afford it” may differ. But the benefits provided by new hires are always clear.
The biggest one is scalability.
Imagine that freelance software developer for a minute. If they reach the $2000/month threshold, they’re probably working 10-20 hours a week.
Technically, they could keep working on the project on their own. In time, they’d slowly get more clients and work 40-50 hours a week, for as much as $10,000/month. But the growth is capped at that point. Not too many people can actively code for more than 12 hours a day, everyday.
And with 4-5 clients to keep happy, any free time is spent sending invoices, managing expectations, or holding meetings. There’s little room to acquire more clients.
Alternatively, the freelance developer could’ve hired part-time help when they were at $2000/month. By the time they reach $10,000 in revenue each month, they might part with half, or all of it to pay salaries. But that’s the only way they’ll ever reach $100,000 revenue each month.
In order to scale, managers need the free time hiring gets them to close more deals, think about their business strategically, or develop new products.
Beyond scalability, new hires offer new perspectives on problems that help drive innovation. And if that’s not the case, they at least give owners the free time they need.
How To Hire People
Hiring is a complex business and each role, and each business, will bring with it it’s own challenges and considerations. There are some general principles however, which can be used to guide the process and give us the best chance of success.
When hiring people, it’s important to:
- Look at candidates from multiple angles. One interview is never enough to get the full picture about anyone. We recommend one chit-chat interview, a practical assignment, and a technical interview before making a final decision. For more reading on what makes a great interview – check this recent article I wrote on Medium.
- Don’t just look for expertise – common values matter just as much. If a company and a candidate aren’t a good fit, resumes are irrelevant.
- Be prepared. A job post can net you hundreds of applicants. It’s important to be ready to sift through the applications, as well to have a meaningful discussion with candidates at upcoming interviews.
Conclusion: The Right Moment To Hire
The right moment to hire is always as soon as possible. Employees offer new perspectives, higher productivity, higher profitability, and the chance to scale a business.
Regardless of market, size, product, and track record, companies can start hiring as soon as they afford to. It’s an investment that, if done right, will pay real dividends.