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As a business owner, one of your most important tasks is workforce management. It’s your job to make sure you have the right people–and the right number of people–to keep your company running smoothly. But how do you know when the time is right to hire additional staff? It may be time to consider hiring more team members if your business meets one or more of the following conditions:

  • New business: You may need to expand your workforce if you recently acquired a major client or even several small clients. You need to ensure that you have the staffing to support the new clients and keep the promises or commitments you have been made to them.
  • Overwhelmed employees: Too much work can overwhelm even the most efficient and dedicated employee. This can lead to increased stress levels and missed work days for employees. When employees are spread too thin, the quality of service provided can be impacted, causing delays in customer service, missed deliveries, lack of follow through and increased complaints from clients.
  • A lot of overtime: Are your employees spending an inordinate amount of time completing work after hours or on the weekends? Long-term overtime can mean your employees are not getting proper rest, leading to more sick days. Overtime pay also impacts the financial health of the company. If you calculate the costs of overtime over a time-period of six months to a year, it may be cheaper to hire a few new employees than continue to pay current employees time and a half.
  • Expansion to a new office: Growing your business to an additional location will require adding staffing to support the move and the new clients. Solely relying on current staff to meet the demands of multiple locations can lead to overworked employees who may seek less stressful job opportunities elsewhere. Expansions should include a workforce and workload management plan to mix the old and new employees between offices to ensure your standards of quality service are delivered across all locations.
  • Missed opportunities: Are you unable to commit to new opportunities due to staffing limitations? Concerned that your current workforce would not be able to keep up with incoming demand without compromising quality? These missed opportunities also impact the financial health of your company and limit growth and profitability.

While it may be easy to reply yes or no to the scenarios above, making the decision to hire more employees is not easy. To know when to expand your workforce, you need to ask yourself some fundamental questions about your company, where you want it to go, and what is happening now:

  • Identify growth: Is it temporary/seasonal or can it be sustained over time? Make sure an increased workload will last long enough to justify hiring new employees. If it is only short-term, hiring temporary employees to support the increased demand may be another alternative.
  • Can you afford it: Take a hard look at the realities of your business. What drives revenue? Determine the leading indicators, those predictable factors that can forecast where your business is headed. Analyze these to see if you can justify additional help.
  • Determine the type of company you want to be: For many, one of the joys of operating a business is the personal interactions with clients and employees. Expansion and growth may mean becoming less involved in the day to day operations and focusing on high-level issues. This will involve delegating more tasks to managers and other team members. If you prefer a smaller business feel, you may want to reconsider how and when to expand your business.
  • Is there outside help available: Needing more help is fine, but do you need to hire in-house? You might have business processes that could be outsourced to other companies for a reasonable increase in variable costs you can handle through pricing rather than the fixed business costs of permanent employees.
  • The impact on profitability: Hiring additional staffing will cause costs such as payroll, employee benefits and payroll taxes to increase. The costs may reduce profitability short-term until the benefits of increased revenue can catch up with the costs of expansion. Also, the more people you bring on, the less money available to cover your own contribution or to invest back into the business.

The thought of expansion and growth can be at once an exciting and terrifying concept for many businesses. In order to make the right decision for the company, owners should take an honest assessment of their workload, the skills of the current staff, the company’s budget and the organization’s overall goals. In many cases, the reward will outweigh the risks but be sure to look before you leap.