Factors That Influence Hiring Decisions
In early 2015, an index that measures the hiring intentions of small businesses rose to its highest level in seven years.1 About 90% of the U.S. workforce is employed at businesses with 20 or fewer employees, so rising employer optimism is good news for the U.S. job market and the broader economy.2
Fortunately, successful small businesses are likely to continue providing employment opportunities in the years to come.
It’s exciting to discover an opportunity to expand the size or scope of your business, and sometimes extra help is needed to make that happen. But how do you know whether your company is really ready to add new employees?
Here are a few signs that it may be time to hire.
- Customer demand for your company’s goods or services is steadily increasing. It may take some time to confirm that growth is consistent and not a seasonal or temporary surge.
- You (and/or your staff) can no longer handle critical work in a timely manner, and customer service is suffering.
- You regularly pay current employees a significant amount of overtime.
- You would like to act on attractive growth opportunities, such as opening a new location.
- A person (or people) with a particular skill set is needed to help develop a new product or add to your menu of services.
Consider the Costs
You may need to invest a fair amount of time and money to build a good team. Adding a salary can be substantial by itself. However, providing common benefits such as health and dental plans, disability coverage, and life insurance adds to the cost. In December 2014, the average employer cost for each full-time civilian worker was $31.32 per hour ($21.72 for wages and $9.60 for benefits).3
There may be additional expenses associated with recruiting and screening applicants, training new workers, purchasing workers’ compensation insurance, and complying with any federal and state regulations. It’s important to research the possible cost to implement requirements that apply specifically to your area and/or industry.
In fact, you may want to consult an accountant to help determine whether you can afford to hire extra help.