Know when you need to hire
As the economy begins to turn around and companies start growing again the need to hire new workers is coming.
It is important to hire at the right time. If a company hires to early they hurt the bottom line. If they hire too late they are already overworking their staff and possibly loosing revenue.
This is especially true in the construction industry.
When looking at when to hire companies need to keep in mind the amount of time it will take to train new workers and “get them up to speed”. It is never possible to bring in a new worker and have them producing at 100% right of the bat. It takes time. The amount of time depends on the skill and background of the worker, the job, and the complexity of the systems they are walking into.
At one extreme is a McDonalds worker. The job systems are very easy to learn and require few previous skills, yet the food chain still allows time for training.
On the other end could be a professional airline pilot. This is an extremely complex job, that requires high levels of specific skills. It can easily take six to nine months from the time a pilot is hired until they are fully working for an airline.
These may be extremes but most jobs will still fall somewhere in between the two.
Managers also need to plan for recruitment time. Even with high unemployment and piles of resumes on HR manager desks there is still a need to do complete job recruitment. Realize you want the best and that will take some time to find. There is a good chance you do not want unemployed whose resumes you already have.
The best workers, the ones you want to hire, will still be employed and may not be aggressively looking for a new job. You will need to give them a chance to find you, or you to find them. Plus you will need to give them time to give notice at their previous job.
When you have a time frame of how long it will take to recruit and train a new hire you will be well on your way to knowing when to increase head count.
However there is still one question that needs to be answered: When?
It all comes down to numbers, when does not having the person cost you more than having them on staff?
To get to this number start by figuring out how much an employee actual costs. Not just in salary by the fully loaded amount. Include things like, benefits, health insurance, sick/vacation/personal leave days, unemployment and social security taxes, and administrative costs. It is not uncommon for these costs to be 20-40% of a person’s salary.
Now look at how much work is available for that person. If you returned your current employees to a normal workload, and took on lost business, how much revenue would there be? When this revenue is equal to or greater than the full cost of an employee it is time to hire.
If you are not yet ready for a full time employee look into part-time or temporary workers. These can be great to bridge the gap as business increases.