How Do I Know When Can I Employ Someone?

How Do I Know When Can I Employ Someone?

Anyone who runs a service business knows the feeling, a constant concern about balancing the amount of work on and knowing when you can employ someone.


If you have all your major processes and margins working properly, it’s this resources balancing act that can take up a lot of your thinking time. Maybe even in the middle of the night. None of us can see into the future but there are some things you can do that help you get a better feel for what to do.


Firstly we have to acknowledge that things can change overnight, sometimes drastically. Leaving aside black swan events it’s always possible that someone will ring up and want you to start work on Monday, or a major client will pull the plug on a big project overnight. You need to have contingency plans in place to deal with these events.


Some things that can help are good relationships with contractors, ex-employees and competitors that can help you fill some emergency demand in a squeeze. Taking the time to find a new employee, and train them, usually takes too long. When the heat turns up you want people that can hit the ground running.


Some people might baulk at the thought of calling in a competitor but, if they need the work, and you get on well, it can be a great thing. It can be the start of alonger term relationship beneficial for both of you, perhaps even a merger.
Or, if work dries up you have a hole to fill, you can reach out to existing clients and discuss potential special projects. Client depth sales are always the fastest and most efficient. You can’t live on it long term but it often fills holes really well.


You can ask staff if they want to take some well-earned leave, perhaps even become a contractor. Worst case, and let’s hope this never happens, put people off.
Being responsible for the continuing livelihood of the firm and its people is a heavy responsibility, it’s the reason that a lot of professionals gladly give up so much of their potential hourly rate. They want to sleep at night and have a life, a life not worrying about this stuff. You, on the other hand, are the one to bring in the work. A lot of us don’t like selling but picking up the phone is the fastest way to solve a lack of billable work for staff. Knowing you’re responsible is sometimes the incentive you need to make that happen.
For business as (relatively) normal, you can best manage demand and resources using weekly utilisation reports. I know, I know, I say this is the solution a lot of the time but, it usually is. That and sales pipeline reporting and management.
Recurring revenue is the ultimate solution to this problem. When your recurring revenue is greater than your recurring costs you can sleep easy at night.
If you are a small but growing business and you worry that an expensive new employee will be a big risk, take small steps, know your numbers, employ the most junior roles first. Maybe even take on an intern using