How To Tell If It's The Right Time To Hire

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Note: This post was originally published on OPEN Forum.

Sure, there may be some tepid signs that the economy is improving.

But it’s still hard to know whether the time is right to start bringing on new full-time employees.

“Caution is the word of the day, because there’s so much uncertainty out there,” says Michael Alter, president of Sure Payroll, a Chicago-based payroll processing company that targets small businesses.

How to tell whether it’s wise to take the plunge?

Consider these steps.

1. analyse your numbers

That means looking at trends in sales and profits, probably for a three to six month period, to see whether there seems to be a sustainable uptick. And include close rates in your analysis, as well.

The exact amount of time that should show positive results varies according to your industry, however. A big ticket item that has, say, a 12-month sales cycle will require a different timeframe from something that's sold in a matter of weeks.

Two examples:

The key is to have accurate methods for forecasting demand

2. Consider an individual's cash flow potential

3. Determine whether you need specific skills that no one on your staff has

4. Look for signs of burnout

If mistakes are being made often or important details are slipping through the cracks, it may be a sign that your employees are being over-worked, and you need more people.

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