Business StrategyGeneral Business

Hire to grow or grow then hire?

Should you first hire new employees to achieve your business growth ambitions? Should you first grow with what you’ve got so that you have enough resources to increase the team? Which one is better?

In this article you will learn:

  • When to hire.
  • Identifying the necessary skillsets.
  • Determining the ideal hiring sequence.
  • Managing the costs and time.
  • Finding the right candidate.
  • Productivity and fast integration.

Hire to grow or grow then hire? There’s no proven evidence that favours one over the other. The most appropriate answer to this question is ‘it depends’, which we understand it is a bit annoying for those looking for some clarity.

As your business experiences growth, in most cases, hiring new employees becomes both a necessity and a challenge. This critical phase can make or break the trajectory of your company. Particularly because expanding the team does not necessarily mean you’ll get an immediate boost to help manage the increased workload in a productive way. There is almost always a lag due to the learning curve new employees typically experience.

Hiring the right number of people to match your business’s current and future needs is a delicate balance. Over-hiring can lead to excess capacity – put that down as inefficiency. Under-hiring can lead to missed opportunities. Finding the right talent at the right time presents numerous challenges.

Let’s explore these challenges and discuss practical strategies to overcome them, ensuring your business continues to thrive.

Timing is one of the most critical aspects of the hiring process. Knowing when to hire can be challenging, especially because sales and client/customer acquisitions are – despite best efforts – somewhat unpredictable. You might land a few new clients, prompting the need for additional staff. However, if those clients don’t materialise as quickly as expected, you could be left with a inflated payroll and no more cash to meet your obligations. Alternatively, delaying hiring until you have a steady stream of clients might overwhelm your current team, especially since staff don’t ‘grow on trees’. Both scenarios come with their own set of stressors and can impact your business growth.

What Can You Do?
Monitor business metrics closely. Use data-driven insights to predict when additional resources will be needed. Track indicators like client acquisition rates, lead times, project timelines, and workload distribution. Establish thresholds that trigger the hiring process—for example, when client load consistently exceeds 80% of your team’s capacity. As well, don’t discount what your team can tell you. Create recrimination-free feedback loops that allow your team to signal that they are starting to experience an overload (among other things).

This proactive approach allows you to anticipate needs and avoid both understaffing and overstaffing. Additionally, consider hiring part-time or freelance workers initially, providing flexibility to adjust staff levels based on demand. Get creative with this – you might find that others in your industry are forcing staff into early retirement or scaling back their workforce. Very experienced workers can sometimes find it attractive to ‘keep their hand in’ by agreeing to join you on an ‘as and if needed’ basis.

Adopting Financial Modelling can definitely help you making better informed decisions on this regard.

One of the primary challenges is identifying the specific skillsets your business needs. As your business evolves, so do your operational requirements. It’s crucial to have a clear understanding of the roles and expertise that will drive your business forward.
For example, if you’re a service provider, you might need additional project managers or customer support staff to handle the increased client load. This requires a detailed assessment of your current team’s capabilities and the gaps that need to be filled.

What Can You Do?
Conducting a thorough skills gap analysis is a good way to start. It involves evaluating your current team’s abilities and determining where additional expertise is required. Employee performance reviews and client feedback are good place to identify areas needing improvement. Additionally, consider consulting with industry experts or using benchmarking data to understand what skillsets are essential for similar businesses. This analysis will help you pinpoint the exact roles and expertise needed to drive your business forward. Where the gaps are too to close, or too urgent to close by training, then you will have to consider hiring in.

Another significant challenge is deciding the sequence of hiring for your business growth. Should you bring on a senior manager first or several more junior staff members? This decision can have a substantial impact on your business operations. Hiring a senior manager might be beneficial for strategic oversight, but if your business doesn’t yet have the volume of clients to justify their salary, you might find yourself with excess capacity and higher costs. Conversely, hiring junior staff might help manage day-to-day tasks but could leave you lacking in strategic direction.

Can’t you simply hire someone who’s a sound hands-on and has a strategic mind? Of course you can. They’re like pigeon chicks though – they exist, but we’ve never seen one.

What Can You Do?
An effective option is to develop a Strategic Hiring Plan. If you’re considering hiring, it means you already have a lot of plates spinning. And reading that you should develop a Strategic Hiring Plan may sound like you’re just adding another one. However, this is critical.
You can start by identifying your most immediate needs—roles that will directly impact your revenue and client satisfaction. Prioritise these hires to ensure critical functions are well-supported. For example, if client management is crucial, hiring additional project managers or customer support staff might be the priority. Balance this with future planning, where hiring a senior manager could be delayed until there’s a sufficient client base to justify the expense. Of course, this is never set in stone. Things change. So, review and adjust your hiring plan regularly as the needs of your business change.

Hiring new employees involves considerable costs and time investments. From the recruitment process to training, each step requires resources that most businesses might find stretches their budgets thin. Posting job ads, conducting interviews, and onboarding new hires are time-consuming tasks that divert attention from core business activities.

Additionally, the costs don’t end with hiring. Training and integrating new employees also require significant investments. During the initial period, new hires are a cost-centre rather than a profit-centre. They need time to learn the ropes, understand company processes, and start contributing effectively.

What Can You Do?
Budget for hiring and training costs so you are not blindsided by them. Allocate specific funds for recruitment processes, including advertising, interviewing, and onboarding. Recruitment agencies might look costly at first (and they are), however, if you’re in a niche industry, or if advertising the open position can expose you to your competitors, their hiring practices can reduce time spent and risks involved, and so an agency could prove to be worth the investment.

Think about how well equipped you are to draw out meaningful insights through the interview process. If this is a ‘sometimes’ and not ‘always’ activity for you, chances are you could brush up on your skills and/or call on expert help to get you through the screening, interviewing, negotiating and hiring process efficiently and effectively.

Finding the right team member is another hurdle to meet your business growth ambitions. It’s unrealistic to expect that you can post a job ad on a Thursday and have the perfect candidate ready to start by Monday. The hiring process requires foresight and planning. You need to think ahead and possibly be prepared to carry too many people for a while or manage with fewer until the right candidate comes along.

What Can You Do?
Start by crafting detailed job descriptions that clearly outline the required skills and responsibilities. This becomes clearer once you have developed the Strategic Hiring Plan we mentioned earlier. Another important aspect is knowing your company’s values and beliefs and hiring against those. On paper, a candidate can meet all your criteria. But it doesn’t mean this person is a good fit.
Networking within your industry to find potential candidates or having an employee referral program is probably the less painful way to find the right person. You might be surprised how much your network and your current team know about your business culture and needs.

Once you’ve hired a new employee, the next challenge is integrating them into your team. This involves not just training them but also helping them understand your company culture and processes. During this period, productivity might take a hit as current employees spend time training the newcomer.

What Can You Do?
Create a comprehensive onboarding program that quickly brings new hires up to speed. Include orientation sessions that introduce new hires to your company culture, values, and processes. Pair new employees with experienced mentors who can guide them through their initial tasks and provide ongoing support.

Set clear performance goals and regular check-ins during the first few months to monitor progress and address any red flag promptly. Encourage open communication to ensure new hires feel supported and engaged, helping them become productive members of the team faster. Even appoint a third party to seek out feedback on your behalf, because sometimes the feedback is more honest without the fear of causing offence.

You will probably be getting the feeling that there is a lot of planning, project management and change management skills needed here and you’d be right. Sustainable business growth demands it.

If you’re ambitious business owners that want to grow, let’s have a coffee. Having the right advice can guarantee you’ll be well-equipped to manage the exciting challenges of growing your business.

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Neil Parker
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