10. Decide If You Should Employ Staff

• 10 Indicators that you need extra staff
• So, you have decided that you need to recruit new staff but you still have some concerns
• Costs - Can your business afford extra staff?

The first question should be, do I need staff? Employing a new member of staff can be costly when you consider the time and money spent on recruitment, their salary, employers’ contributions, training and other benefits your company may provide. You must therefore assess your staffing requirements carefully before recruiting.

1. Do you need to bring in a new skill to your business that none of your existing employees have, e.g. do you need an employee to carry out your marketing? If this is just a short term rather than permanent requirement you could consider employing temporary staff or consultants.
2. Has your workload increased? If so, is the workload likely to carry on increasing in the near future or is it just a temporary increase? If the increase is seasonal or a large one-off order, you might consider temporary staff, rather than permanent employees.
3. Are you replacing an employee who has left? Think about the reasons why the previous employee left and the skills and experience that your employee had. This may help focus your thought when it comes to creating the job advertisement.

10 Indicators that you need extra staff
Please answer the following questions on a scale of 1 to 5, where 5 is yes, most definitely and 1 is no, not at all. There are no "right" or "wrong" answers, the more honestly you answer the questions the better indicator you will get.

		1	2	3	4	5
1.	Are you working prohibitively long hours?
2.	Would employing an extra person reduce your work load, freeing you up to concentrate on other areas?
3.	Would sales increase if you employed an extra person?
4.	Is the work that needs doing permanent, i.e. all year round and not seasonal for example?
5.	Does your "gut" feeling tell you, you need an extra person?
6.	Do you think the business can afford an extra person?
7.	Will an extra employee be a better solution than using an outside contractor e.g. a subcontractor or agency person?
8.	Are you so busy that customer satisfaction levels are suffering?
9.	Would an extra employee bring new skills that would significantly benefit the business?
10.	If you asked your spouse or friends, would they say you needed an additional employee?

Remember there are alternatives to employing staff. Click here for more information.

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So, you have decided that you need to recruit new staff but you still have some concerns

As a potential employer it's likely that you will have some concerns, over employing extra staff. Many of these concerns are perfectly legitimate, however they can be minimised through good recruitment and selection procedures and employment practices all of which are covered in this course.

The following is a list of the most common employer concerns, which we've identified through talking to small business owners. It you share any of these click on the button for further guidance & information.

1.	Getting the right person	Main Concern
2.	Form filling and red tape	Main Concern
3.	Employee leaves to setup in competition	Main Concern
4.	Financial commitment	Main Concern
5.	Employee theft	Main Concern
6.	Ruining your reputation	Main Concern
7.	I'm not a good delegator, can I manage	Main Concern
8.	Employees keaving to join a competitor	Main Concern

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Costs - Can your business afford extra staff?

A key point that has been referred to already is the cost issue. Can your business afford extra staff? The following is a sample tool to give you an indication of how much additional sales are needed to cover the real cost (including taxes, perks, and associated costs) of an additional employee. Only you can then assess how achievable these extra sales are.

	Cost
How much will the employees gross annual salary be?
Weekly take home pay?
Employers National Insurance Costs	Yes/No
Will you contribute to the employees pension and if so please select your contribution as a percentage of gross salary.	1 2 3 4 5
Will the employee require?
A computer
Office furniture
Tools which you will provide
Other equipment
Will the employee have a company car?	yes/no
Cost of car
Will you pay car tax, insurance and travel costs and if so what annual mileage do you anticipate?	Yes 10k Yes 15k Yes 20k Yes 25k Yes 30k
The employee will cost you approximately
What is your gross profit margin expressed as a decimal for example 35% gross profit = 0.35 click here for gross profit explanation [Help]
The level of additional Sales required to cover the cost of this new employee is:

Please Note: figures rounded to whole number

By now you should have a good idea as to whether or not you actually need a new member of staff, how much that member of staff will cost you and whether they will be required on a permanent full-time or part-time basis. Now we will look at the process of recruiting the right person for the job!

 

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