The costs of hiring a new employee
Depending on when you do it, hiring a new employee may help your business grow or it might set the business back.
For business owners, the decision to hire is complex. Can you afford to? Can you afford not to? Before you decide, you will need to assess the costs of a new hire.
Here are some guidelines to remain objective, calculate potential costs and help consider all your options.
When to hire employees
You might decide to hire a new employee when:
Determine the health of your bottom line
If any of the above apply, you will want to estimate the costs associated with hiring an employee and how those costs will affect your bottom line. In fact, the costs start adding up before you sign the first paycheck.
Consider different remedies
Before you set the hiring process in motion, think strategically about what you want this new hire to accomplish. Write a job description and be as specific as possible. Could a part-time employee or contractor fill this role? Is it a year-round job, or do you just need extra help getting through a seasonal uptick? Could the job duties be divided among existing employees?
You should also consider whether hiring a new employee fits in with the long-term vision for your company. How many employees can you comfortably manage?
Avoid the side effects of understaffing
Despite the costs of hiring, the costs of not hiring may be greater. If you prefer your business to remain the size it is, then hiring a new employee may not be a good idea. The potential long-term effects of not hiring include:
In addition, you may find you don’t have enough time to focus on the big picture because you are continually putting out fires caused by insufficient support.
Although the question of if, or when, to hire employees may include numerous costs and considerations, which may be daunting at first, it might be worth the investment for the sake of long-term growth.
There’s always more to learn about managing your business, so please continue reading at usbank.com/small-business.