Staffing is a constant struggle for most small businesses. Time is spent training employees just to have them move on shortly thereafter. Being understaffed is common, and not having cash flow to hire enough staff to function optimally is even more common.
It's easy for business owners to make mistakes when they hire staff. After all, dealing with people is more of an art than a science. People are on their best behavior during the hiring process, so employers don't always know what they will really be like once they are hired. And hiring mistakes can be costly, whether it's hiring someone who turns out to be unreliable or trusting an employee who turns out to be a thief.
Another key problem can be knowing how many staff you need at any given time. It's difficult to predict how many customers you will have on a given day, whether your business is a retail storefront, a restaurant, or phone-based sales and service. When you overstaff, you are wasting money that you may not recoup in sales, and when you understaff, you may be losing out on sales if no one is available to take care of customers in a timely manner.
Measuring Staff Productivity
According to Chron Small Business, it is a wise decision to look carefully at your current staff's productivity to gauge a realistic expectation for what they can handle. How many customers can each staff member take care of in an hour? How many tables can your servers handle at a time?
Once you know how your staff is functioning, you can decide on some productivity goals and rewards to help staff maximize their productivity, which will keep your costs manageable. If you find that your customer base has grown beyond staff's ability to handle it, then it's time to hire -- and you will have a good idea how to structure your hiring appropriately to your actual needs if you have a general idea about expected productivity based on current numbers.
Don't forget that brand new employees will be less productive than your seasoned workers at first as they learn the job and practice the skills needed. Although this can add to your labor cost temporarily, training is necessary and all part of the cost of doing business.
Added Costs of Hiring
When staff are hired, you aren't just paying them a flat hourly rate in most cases. Payroll taxes, employee discounts and other benefits need to be calculated into staffing costs for an accurate picture of cost to emerge. Part time workers get fewer benefits than full time (now calculated at 32 hours per week), but it is the rare business that can staff itself completely with part time staff and do top notch work. If you grow enough, you will need dependable full time staff to help you manage everything well, and it will be worth paying them accordingly (including benefits).
Funding Staff Increases
In some cases, the need to hire more staff will come after the money is there to pay for it. Often, though, more staff is needed even though the growth isn't yet showing up on the profit and loss statements. The need for additional staff can be immediate, even when increased sales aren't, due to customers' need to browse awhile before buying or buying small items first.
One way to handle increased staff needs without breaking the bank is to slowly increase current staff hours if you can, rather than hiring new staff. You may also be able to hire interns such as college students, paid or unpaid, to fill some of your staffing needs. When your staffing needs surpass your cash flow, a business cash advance can be the answer to your temporary crunch. With a lump sum of cash based mainly on your track record of sales, you can afford to staff your business in a way that will keep it growing.
Quikstone Capital Solutions offers business cash advances to businesses for needs like staffing that can help them grow. Apply now to find our how much assistance you can get.
