Is it Time to Grow Your Team?
Is Scaling Your HR the Right Move, Right Now?
Business growth is great, but growing blindly isn’t.
While growth means you’re experiencing increased revenue, it also means you’re making bigger decisions with greater consequences, such as an over-commitment to the overheads that inevitably come with increasing your team size. So, should you grow your team right now?
Unfortunately, the answer isn’t always cut and dried. This is a nuanced discussion and it’s important that you understand whether your need would be best addressed by an increased number of staff or if you could address your need with a lower-cost, quicker solution.
Express Business Funding’s Chief Growth Officer – Gareth Bird offers his insights into how to navigate this trying time in this article.
“Whether you’re considering hiring more staff, opening new locations, or launching a new product line, it is vital to consider the costs of growth before diving in headfirst,” advises Bird.
To identify whether now is the right time to expand your team, let’s look at various scenarios that may warrant expansion and alternative ways you could address these scenarios without hiring more staff.
Why Expand Your Team?
There are likely several reasons you would want to scale your team. Do any of these describe your situation?
- Increased workload: As your business grows, so does the volume of tasks and responsibilities.
- Missed opportunities: How many times have you closed the door on a potential opportunity due to being understaffed? Nobody likes it, but sometimes you just don’t have the manpower.
- Decreased productivity: Overburdening your existing team can lead to burnout and decreased productivity.
- Poor customer service: With a smaller team, it can be challenging to provide exceptional customer service consistently.
There are, of course, other factors that can impact your business’s productivity. For this reason, you need to ask yourself, “Is this a staffing issue?”
Is This a Staffing Issue?
When considering the need to expand, it is important to evaluate whether it is a staffing issue. This involves examining various factors such as:
- Operational Bottlenecks: Identifying areas within the organization where processes are slowing down, or hindering efficiency is crucial for streamlining operations and optimizing productivity. Are these bottlenecks due to a lack of staff?
- Under Skilled Employees: Assessing whether there is a lack of expertise or skillset among the current workforce that is potentially limiting the growth potential of the organization. If employees are not equipped to do the job, they will greatly decrease productivity as a result.
- Poor/Unavailable Service Delivery: When examining instances where the quality of service provided to customers is compromised, it is important to consider various factors such as customer feedback, service level agreements, and potential areas of improvement. How are your staff handling service delivery?
- Inefficient Management:Conducting a comprehensive analysis of the effectiveness of current management practices and carefully identifying any potential shortcomings from your team will help determine whether you need to expand or replace where needed.
- If you have determined that it is, in fact, a question of staff and requires upscaling, you should now ensure that you understand the financial implication that accompanies your growing team.
The Financial Consideration
Before you consider expanding your team, it is essential to evaluate your company’s financial health, lest you pre-maturely grow and incur greater costs in the long run. Consider these key financial factors:
- Budget Allocation: Without the necessary funds, you run the risk of financially overextending your business. Make sure you can cover the cost of new hires’ salaries, benefits, and any additional costs associated with onboarding your new team members. Additionally, consider the duration of time you would need to bear these expenses before the additional overhead offsets its cost-to-company.
- Revenue Growth: Analyze your company’s revenue trends. Are you consistently generating enough income to support an expanded team without straining your finances?
- Return on Investment (ROI): When considering the long-term return on investment (ROI) of hiring new employees, it is crucial to carefully evaluate whether the cost of hiring will have any short-term impact on productivity. Will the additional talent contribute to increased productivity and profitability over time?
Of course, you cannot establish the true cost of hiring without first understanding the (often nuanced) cost of a new hire.
While the upfront costs of hiring new employees for your team can be significant, there are other considerations to take into account when weighing these expenses:
- Start Small: Consider a gradual approach to team expansion. Hire one or two new employees initially to gauge their impact on productivity and profitability.
- Forecast Future Revenue: Create financial projections that account for both the costs and potential revenue generated by new hires over time.
- Explore Outsourcing: Should the cost of hiring new employees be too high, explore outsourcing options for specific tasks or projects. This can be a cost-effective way for you to access expertise without committing to long-term salaries.
- Performance Metrics: Implement performance metrics to track the effectiveness of new hires. You can then adjust your hiring strategy based on their contributions to the company’s success.
- Employee Development: Invest in training and development programs to maximize the potential of your existing team members before adding new hires.
Expanding your team is a significant decision that requires careful consideration of the financial, operational, and managerial aspects involved. While the costs of hiring new employees are undeniable, the potential benefits – such as increased productivity, diversified skills, and growth opportunities – can offer you a worthwhile investment for your business. Ultimately, the key is to strike a balance that aligns with the financial health of your company, as well as your long-term goals.
“Our team has gained invaluable experience in the many high-impact decisions that contribute to the growth of a business. We’ve worked hand-in-hand with countless businesses in distress and helped them to surpass anything they had previously imagined. Our Consulting services are a by-product of the work we’ve done in the alternative finance space and something we are immeasurably passionate about. If you are contemplating upscaling your team or even seeking out solid advice, reach out to me directly,” concludes Bird.
Get in touch with us today to explore your financing options and take your business to the next level. You can easily connect with and contact Bird via LinkedIn here, as well as contact the rest of our team here.