Two years ago, I consulted with a professional services firm that had been in business for 25 years and was ready to grow from 15 employees to 50. That was their long-term goal, but they weren’t sure how to get there, or how long it would take.
On further inquiry, I found out that their numbers had fluctuated quite a bit over the years. At one point they were up to about 25 employees, and at another they were down to just five. The managing partner gave me the business history year by year and tied the number of employees to the business climate during each period.
This firm had been in a dead-end hiring loop for most of its existence. They would hire additional staff when they got really busy, and then lose staff when work slowed down. On paper, they had reasonable predictions for steady growth to a certain level, but they didn’t seem able to execute, and they couldn’t figure out why.
The managing partners enjoyed discussing marketing strategies that would bring in new business, but when I mentioned hiring more staff they got very quiet. The firm had been through so many bad hiring situations in 25 years that no one was anxious to start that process again.
In fact, after I worked with the firm for about a month, a key employee left and the partners prepared to take up the slack without even a nod toward hiring someone to fill the position. They would rather work 90 hours a week covering administrative tasks they were unfamiliar with than go through the frustration of hiring.
This is not an usual situation for a small business. All of the expertise is in the core business area, and there is little energy leftover for basics like staffing.
Unfortunately, in order to grow the capacity of the firm to take on more projects and serve more clients, additional staff is essential.
You cannot build a business on transient staff.
To turn around this transient culture and start legitimate staff growth, there are a few things to consider:
You cannot hire is a hurry, during the chaos of a work overload, and expect long-term results. If you have too much work and not enough time to organize your hiring process, consider temporary help. There is less investment in this short-term solution, and it will get your through until you have time to do the work necessary to bring in another full-time employee.
Hiring is a long-term commitment. You want employees to stay and grow with your company because that is the best return you can get on your investment. Be prepared to offer them steady work and growth opportunities.
Success has a lot of different definitions. You need to share your expectations clearly with employees. They cannot be successful according to your definition unless they understand what it is. No, there is no such thing as common sense. Spell it all out to them.
Organization and planning are like the chicken and the egg. You need one to have the other. A loose organizational structure where it is unclear who reports to whom or where promotional opportunities are not defined does not work for scaling a business. While it is important to remain flexible, you cannot build the structure around the people, waiting to see how it all works out when the personalities are in place.
Policies and procedures are the backbone of a strong organization. They should be documented and clarified regularly. Most importantly, everyone needs to be held accountable. When everyone is subject to the same rules and they are all completing the work the same way, quality is high, customer satisfaction is optimum, and employees are productive.
Everyone needs to have one boss. In a small company, employees may serve a combination of functions and work with other staff members to accomplish their varied tasks. The organization may not be large enough to truly breakdown into departments, but that is no excuse for multiple supervisors or a murky hierarchy. Everyone needs to have only one boss, and no one is the boss of himself.[/message][su_spacer]
If you are turning over employees in under one year consistently, your business is stuck in a dead-end hiring loop. For some organizations, it is hard to recognize the dead-end hiring loop because it progresses so slowly. You have to look at a longer continuum, say three years or more.
The size of the staff should only increase, even if it is slow growth. When you bring new employees in, you should have enough work to keep them busy and enough continuing revenue to cover their salaries long term. They should also have some growth potential within the organization, so they will want to stay and grow with your business.
An employee who has held several different positions in the company is a good sign of successful hiring and business growth. When you can recall several different people occupying the same position over the last couple years, none of whom are with your company any longer, you probably have a hiring problem.
There is no rule for employee longevity that fits every business, but you want to strive for multiple years of employment for each staff member. Keeping the same employees adds continuity for your customers and increases the perception that you are running a successful business.
Most importantly, the longer an employee stays with your business, the more value he adds to the firm. Employees are a big upfront investment. For the first six months to a year or more, you are paying their salary, taxes, and benefits, but they are not earning money for your business. After the learning curve, when your employees start increasing your revenue, you start to get a return on your investment.