PeggyBank‘s web ad was more successful than company founder James Simon could have possibly hoped. After placing the ad, the firm — which digitizes photos, VHS tapes and slides — suddenly found itself deluged with orders, reports The New York Times.
While this was certainly good news, it also presented Simon with a problem. So many orders came in that employees couldn’t fill customers’ demands fast enough, taking up to five weeks instead of the normal two-week turnaround.
Management had to ask employees to work more overtime — up to 15 hours per week.
Simon saw both excessive overtime and excessive backlogged orders (more than 100) as signs that it was time to hire more employees because his business was growing.
But it’s not always that easy to know when to add to your staff. Growing a business means walking a tightrope. You don’t want to increase costs more than you have to, but you also need to be able to meet customer demand.
So how do you decide? Here are some signs you may need to hire more employees:
1. Your employees are overloaded
Your employees are telling you they’re overwhelmed and, as with PeggyBank, overtime is increasing. Even your top workers are making uncharacteristic mistakes. Vacation time is down while sick days are up.
2. Customers are getting angry
You are taking too long to fill orders, you’re missing deadlines, or you’re making mistakes in finished work. You don’t have enough staff to wait on customers or answer their calls, emails and web inquiries.
3. You’re missing opportunities
You aren’t following leads because you’re too busy, or you actively turn down projects because you can’t fulfill them.
4. You see continued demand ahead
You can see that there is opportunity in your industry and you want to strike while it’s hot. But be sure you’re not just going off gut instinct, says Bill Peppler, managing partner of staffing firm Kavaliro, in Ziprecruiter.
Study your profit-and-loss statement, analyze trends, and look at key data and metrics to be sure you’re seeing sustainable growth and not just a temporary bubble.
5. Your current employees don’t have the right skills
As your business expands, you may find that you need workers who have higher-level or different expertise, points out Strategic Contract Resources.
6. You’ve tried reconfiguring staff and it still hasn’t worked
One way to handle expansion is to get more efficient: to use your employees in the best possible way. Sometimes shifting responsibilities to different people is all that’s needed to meet demand.
But if you’ve tried shifting these tasks and personnel around and you still can’t get the work accomplished, you’ll need to consider adding people, notes Ziprecruiter.
7. You can afford the cost of hiring
Adding workers means not just their salaries, but benefits, worker’s compensation and payroll taxes, plus their desks, computers, software licenses, and training and supervision costs, notes Erik Sherman in Inc. These costs might need to be carried until revenues pick up enough to cover them.
If you decide to hire, remember that this doesn’t mean you’re restricted to just full-time, permanent workers.
Consider hiring temporary or contract workers for a few months, to see how they will work out and to verify that your company really does need the help, advises Rachel Hartman at Intuit. You can also use a contract worker while seeking permanent employees to add to your expanding business.