It's not that easy.
Knowing whether to invest in a new hire.
You're probably feeling a bit uncertain about whether you should recruit a new employee, and what skills would best compliment your small business if you did.
You're afraid that you'll hire the wrong person. Someone who doesn't jive with your team or your culture. Someone that will be dead weight, or will drain your company of valuable money without adding to your top-line.
And what could be worse than that?
The thought of burning cash on a new employee who can't keep up with the work and is making life worse for everyone around them is a real threat.
On the flip side are small business owners who need to hire but won't pull the trigger. They stand frozen by uncertainty. They don't know who to hire, and can't justify hiring to grow their business. So they don't act. Their businesses are suffering from overwork and stagnant growth.
What these unfortunate small business owners don’t have is a method to sort through the confusion, making it clear when to bring on a new employee, and what skills they should have.
This is the method I’m going to show you today. And if you’re not sure it’s needed, consider this:
The Danger of Hiring Too Fast (or Waiting Too Long)
When, while running a small business, you find yourself doing your employees’ work, it’s tempting to bring someone new on board as quickly as possible.
To do this thoughtlessly, however, invites disaster.
With salaries, health insurance, and benefits costs, new employees are the quickest way to burn your cash. Ultimately, every new hire should either save money or make money for your business. If they’re not doing either, your bottom line will fall out quickly.
Of course, waiting too long to hire invites slow growth, delayed product development, unhappy customers from too little customer support, rising sick times from overworked employees, and burning out your staff (or yourself).
What does this all sound like?
It sounds like the future of your company can depend on the timing of your next hire!
For many, it’s as simple as that. For others, perhaps it’s not so drastic. But I would venture to guess that even if one poorly timed hire didn’t bring down your company, 3 in a row would hurt, and 5 in a row would be a complete disaster.
So let’s look at that method to see how we can bring some more certainty to our decision. Let’s look to former President Dwight D. Eisenhower.
What Does Eisenhower Have to do with Hiring for Small Business?
If you’re wondering why any President, past or present, would make a difference in your hiring process, you’ll be surprised to know that Eisenhower is known for his “priority matrix”—a productivity tool used by many to organize their ever-growing task list.
It’s based on a simple concept:
“What is important is seldom urgent and what is urgent is seldom important.” –Dwight Eisenhower
Take your tasks, mark them urgent or not urgent. Then mark them again based on their importance.
You should complete the urgent and important tasks immediately. Not urgent and not important ones should be thrown out immediately. Everything else can be scheduled or delegated.
It’s best shown in this diagram:
Source: http://jamesclear.com/eisenhower-box
This simple task management technique can reduce uncertainty concerning skills and timing of a new hire.
In other words, use this technique and you’ll feel confident in your decision to hire (or not).
Better yet, even if you decide not to hire, you will still gain valuable information, allowing you to make a different decision. After all, new salaried employees aren’t the only answer to task overload or growth problems. Often contracting or reorganization of workflow can do wonders.
From Hiring Priorities to Decisions – Filling Out the Matrix
You likely see where this is going. But let me fill you in since I’ve uncovered a few gotchas over the years.
Before we get started, consider whether you are hiring for you or for your team. In other words, do you believe this new employee will be picking up your tasks, or will they be covering a gap in your staff’s skills or workload?
If you're recruiting for an ever-growing personal task list, you can likely do this exercise alone. If you’re hiring for your team, call a meeting with them (or at least a team lead or development manager of sorts).
Either way, here’s the plan:
Start with a blank Eisenhower Matrix. I’ve found a nice big one on a whiteboard is a good way of doing things. For each task you write down, put them on sticky notes. If you don’t have a whiteboard handy, pen and paper or a 2x2 spreadsheet is fine.
With a fresh matrix in front of you, ask yourself these questions and follow these steps:
1. When You’re Behind, What Can You Delegate?
The first set of tasks we’re going to prioritize are those that are slipping.
““Only do what only you can do.” ”
Begin filling in your fresh matrix with all the tasks you are behind on; things you believe need to get done that aren’t. You can paint broad strokes, or drill down into specific, individual items.
However you do it, make sure you are listing tasks that you can delegate. Keep the things that only you can do out of it.
Remember, as you fill in the priority matrix, ask yourself if each task is urgent or not. Then ask if it’s important or not. Based on this, you can quickly place the task in the right quadrant of your matrix.
2. What Would You Like to Delegate?
Load up your matrix with tasks you need to delegate, and tasks you'd like to delegate.
Next, load your matrix with the tasks you would like to offload.
Like before, these should be tasks you can delegate. And, like before, these tasks should be placed in the appropriate quadrant based on their urgency and importance.
You don’t need to separate these tasks from those you listed in step 1. Their urgency and importance will naturally filter them appropriately based on where you place them in your matrix.
3. Identifying Skill Buckets with Intelligent Task Grouping
Group your tasks by skills required to do the job. In this pic, I used stars, pluses, and other indicators (since I couldn't find my highlighter).
You may have 100 things to do, but if they require a variety of skills, you may not have enough tasks in common to hire a single employee.
So, to figure out if we have enough tasks in common to warrant a particular type of employee, let’s group the tasks by the skills they require.
If you’ve used sticky notes on a whiteboard, you can rearrange each sticky note and group them with other tasks that could be accomplished by a single person (being careful to keep them in the same quadrant). On paper, different colored highlighters work great.
Do this for all tasks on your priority matrix, in all quadrants.
4. How Much Work (Actually) Needs to be Done?
For each task, I listed either hours, days, weeks, or months of work to be done. It gave me an idea of how much work each skillset would have to do, should I decide to hire.
For each group of tasks, make some time estimates. How long would it take a new employee to accomplish everything?
You’re not going for accuracy here. Just a rough guess. Mark each task with “time units” (is your task going to take minutes, hours, days, months, or years).
Pay attention to whether these time units are recurring or not. If they are, just do the math and figure out how much time they will consume over the course of a year or two. You don't want to be surprised either way when you bring a new employee on and they run out of work in a months.
5. Justify a Return on Investment
For each task, I guessed at how much money it would make over the next year or two. Nothing exact... just tens or hundreds or thousands of dollars.
You may want to read this twice:
Just because you have a lot of work to do doesn’t mean that this work will make you (or save you) enough money.
Therefore, for each of your task groupings, you’ll want to calculate how much money your company will make or save if the duties were completed. If you need to make your calculations on a task by task basis, go for it. Otherwise, an off-the-cuff guesstimate on the entire grouping of tasks should suffice.
Feel Good About Hiring (or Deciding Not to)
Step back and look at what you’ve done.
You’ve got your priority matrix filled out with “delegatable” tasks that are both urgent and important. These tasks are grouped into skill sets that one person could accomplish. Each task has an estimate of how much time it would take to finish, and how much money your company could expect to make or save if it was done.
Given all of that, you should be able to see immediately whether a new hire is necessary.
How? Let’s take a look:
- Not Urgent and Not Important tasks should be thrown out… don’t worry about them, and certainly, don’t hire anyone because of them.
- Urgent but Not Important tasks indicate a potential new hire down the road. Don’t put out a job requisite just yet, but keep an eye on these tasks and reassess their importance every week or so. Eventually, some of these tasks will increase in importance, and a full-time hire may be necessary. For now, see if you can get away with ignoring or outsourcing these jobs.
- Not Urgent but Important tasks may push you toward starting the hiring process. In this quadrant, look at your task groupings carefully. If you have many tasks grouped by skill set and adding up to an enormous amount of time, it’s a good indicator you should hire.
- Urgent and Important tasks need someone right away, be it a new hire or a contractor. Choose a new hire if your recurring tasks add up to a significant amount of time; enough time to justify a new hire. Contractors can be hired if the tasks are more immediate and not enough to warrant a full-time employee.
Urgency + Importance + Skills + Time + ROI = Hire (or Not)
You started off feeling uncertain, afraid to pull the trigger and hire someone that might not mesh with your team; worried that a new employee might not make or save you money.
But with this short exercise, you now have a formula to make hiring decisions like a boss. Data-driven, defendable decisions that give you the power to know when to hire, what skill sets to hire, and whether to recruit full-time or outsource.
You should walk away from this exercise feeling relief.
Perhaps hiring a new full-time employee has been nagging you for some time, and you’ll have discovered that it wasn’t necessary. Perhaps recruiting is a source of contention for your team, and you can show them why (or why not) a new employee is necessary.
Either way, running through this process will give you a handle on unfinished business, give you an indication of what skills to hire, and when to do it.
It’s a system that’s worked well for me over the years. It has eliminated the confusion I often felt when hiring: whether it was necessary, and whether it would be worth the investment.
Beyond justifying it to myself, this always resulted in enough data to justify it to my boss/management/leadership. It was also a way to explain to my team why we couldn’t afford to hire a new employee at the time (often a source of contention for a team under hiring freeze).
So now it’s time to pull the trigger on this process. Do away with this fear and uncertainty of hiring and take 30 minutes to figure out how to move forward.
When you’re done, write us in the comments below and let us know if and how this process helped you make a comfortable decision.
About the Author
Michael Mehlberg
CO-FOUNDER | TECHNOLOGY, PRODUCT DEVELOPMENT, MARKETING, AND SALES
Michael Mehlberg helps small businesses owners achieve their goals and live their passion. His approach to technology, corporate strategy, product development, marketing, and sales is both practical and highly effective, and has helped multiple small businesses grow into the company their owners envisioned. Reach out by emailing him at mike@moderndavinci.net or learn more on our About page.