Smart Work

5 Questions to Ask Before Hiring Employees

Posted 06 May 2016 | BY Sansan

Just as companies are sometimes guilty of understaffing and overworking existing employees, they may be equally guilty of hiring when there isn’t a real need to. This checklist will help small and medium-sized businesses (SMBs) determine if they do, in fact, need more employees.

  1. Do you have adequate work?

When you’re a business owner swamped with responsibilities, hiring can seem an attractive option. But first, you must determine if there's adequate work to justify employing someone. Consider the tasks that need to be managed – unless they add up to more than 20 hours of work each week, you probably don’t need to hire just yet.

  1. Can you outsource?

If you’re certain you have adequate work, the next question is: do you need to hire in-house? Many business processes and tasks can be outsourced or done by freelancers. That way, you only need to budget for a rise in variable costs and be flexible enough to respond to changes in demand. You can outsource tasks such as accounting, marketing and web design – or even explore the use of virtual assistants.

If the work you need done is irregular and outside your business' strengths, outsourcing would be more suitable. This method allows you to engage vendors with more skills and experience than anyone you could afford to hire.

  1. How sustainable is the companys growth?

Many entrepreneurs rush to hire when the company sees an influx of business. But the rise in demand could be temporary, triggered by a one-off event. Before placing job advertisements, you need to be certain the workload is going to be sustainable in the long run or you’ll be left with employees with little to do. If your growth is in fact momentary, you might wish to consider engaging temporary staff instead.

  1. Do you really need executives?

In the race for profits, first-time business owners often hire executives too soon. You should only consider bringing them on-board when your business experiences significant growth. If you’re still testing products, for instance, wait until you get more clicks and some visibility before hiring a marketing manager.

Also, remember that executives with big-business credentials aren’t always a good fit in an SMB environment. They might be used to organisations that are heavy on rules and processes, whereas small businesses often won’t have well-defined roles, and employees need to be flexible to pitch in.

  1. Do you have the budget?

The final question to ask yourself is whether you have the budget for another employee. You need to consider the full costs involved – from recruitment expenses to training, salary and severance (in case they don’t turn out to be the right fit).

On top of that, there are expenses involved in providing adequate office supplies, computers and maybe even a mobile plan. Then there's taxes, insurance and any other benefits your company might offer to attract and retain talent. All these extras add up. List them down and cost them out, and you’ll get a clearer idea if hiring is within your budget.

Hiring before you’re ready for it can drain resources. So, before rushing to find talent, remember to ask yourself these five questions. If the right requirements aren’t met, it might be better to wait until your company gets to a point where expanding your workforce becomes a must.