By Sandy Cody

HandshakeYou’ve started a successful business that has grown to the point that you need to hire your first employee. Congratulations!

It’s exciting to grow, but hiring additional staff is one of the most important decisions a small business owner will make. Adding staff will give you additional responsibilities, obligations and expenses. Having employees also can give you big headaches if your new hire is not a good fit.

Draker Cody, Inc., helps clients navigate the unknown waters of staff growth. We use the following worksheet to help guide executives in their initial and ongoing staffing processes.

Creating the Human Resource Function

Business Requirements Checklist:
Review your business and/or strategic plan and ask yourself:

  • Did the original business plan consider adding staff?
  • If it did, review the goals, objectives and criteria for adding staff.
  • If the business plan did not include staff, what were the reasons? Was the goal to remain small and not have employees? On the other hand, was the future need for employees just overlooked?

The answers are not right or wrong; just consider them a starting point in examining where the company is today and what your current needs are relative to the business plan.

Once comfortable with the business growth and its long-term strategies, it is appropriate to revisit the plan and ask:

  • Is the financial climate of the company such that it will support employees and the related costs?
  • Due to the growth, what areas of the business may be suffering? Also ask yourself “In what areas am I not proficient and could those areas use assistance from someone other than me? The answers to these questions will establish for what functions or tasks you will want to seek assistance.

When answering the questions above, also consider “What do I enjoy doing? What are my strongest and weakest skills? What am I willing to give up and trust others to do?”

Having decided what you can AFFORD, what YOU want to do and what you want OTHERS to do, it is time to consider the Human Resource function itself.

  • All of us know that expanding our businesses to include staff brings certain obligations mandated by federal and state legislation and, in some cases, by the regulations of our particular industry. Therefore, it is critical to research what is required when we decide to have staff.

Of course, this brings another set of questions:

  • What type of staff is best? Contract, employees, outsourced, leased, volunteers?
  • What are the costs and are there tax advantages?
  • What are the less tangible advantages to the business (i.e. customer service, loyalty, commitment)?
  • What are the industry standards and trends?

Regardless of what type of employee you decide to hire, hiring and retaining excellent staff, depends in part, on the following:

  • Implement policies and procedures that clearly outline the relationship between you, the business and the staff.
  • Job descriptions or position profiles clearly stating tasks, duties, responsibilities, minimum requirements to perform the job, physical demands and the physical environment of the job (required to comply with the Americans with Disabilities Act and other regulations), machines, tools and equipment used in the performance of the tasks, and relationships encountered on the job with peers, customers, supervisors, etc.
  • Wage and salary plans will include pay and when and if to give bonuses, raises and other incentives.
  • If offering benefits, what benefits meet the needs of the organization and the employees?

Then there is the issue of retaining staff.

Now that you have a staff, you are set! Life is easier, and the company is continuing to grow and prosper. However, employee needs, organizational needs and the economy change.

Nothing in business is static, so the suggestions listed above require ongoing review and modification. Successful companies stay flexible; not just in the services and products they offer, but in how they structure the employee base.

It is highly recommended that unless the organization is large enough to hire a full-time Human Resource professional, it consider using the expertise of a contract HR professional during the planning and implementation of staff hiring. For many smaller companies the option of outsourcing the Human Resource component is cost effective in several areas: reduced employee relation errors, time savings (you are able to perform the tasks you do best, such as building your business), regulatory compliance, reduced costs in taxes, benefits etc., and added peace of mind.

Small businesses often need additional staff to grow. How you grow and manage staff is critical to future success.

Sandy CodySandy Cody, president of Draker Cody, Inc., has more than 30 years of management and human resources experience and holds a Masters Degree in Management with a focus on Human Resource Management and Organizational Development.