Dialing in your staffing levels is critical to your company's success. Not having enough employees can seriously hinder your team's production, while having too many staff members puts an unnecessary dent in your bottom line.
As CEO and partner of Sterling Staffing Solutions, Stephen Carter knows all about the importance of hiring the correct number of employees for a business. Sterling Staffing Solutions is a medical staffing firm in Texas that specializes in providing contract employment opportunities for medical professionals to home health agencies, hospices, hospitals and rehab facilities.
We recently spoke with Carter about the best way to determine how many employees your company needs, how to ensure new employees start off on the right foot, and how long you should give struggling employees before making a change. Additionally, we asked him several rapid-fire questions about technology, his career and advice he has received over the years.
Q: What is the best way to determine how many employees your business needs? How do you know when you have too few or too many workers?
A: The first step is to create an organizational chart that clearly defines every job function required to effectively operate your company. Initially, multiple job functions may be covered by a small number of employees. For example, sales, operations and payroll is initially the CEO's responsibility.
As your company grows, you will need to watch for indicators that the efficiency, productivity or quality of your work may be being impacted by inadequate staffing. Examples of those indicators are more frequent service failures, a higher number of customer complaints, employee burnout, excessive overtime, an inability to fulfill new orders in a timely matter, etc.
You should be able to develop statistical data tied to your industry that allows you to mathematically calculate when an employee hire is required. For example, in the healthcare staffing arena, we have determined that for every $35,000 to $50,000 in additional monthly revenue generated, there is a need to hire a new employee.
An easy way to determine this calculation is to take your annual revenue divided by your average annual employee count and divide by 12 for the number of months. This will give you a number that reflects the amount of income required to sustain the productive employee. Obviously, there are other factors that impact this number, but it serves as a gauge for your organization.
Technology and automation may be used to decelerate the need of hiring new employees. Investing in tools to make your existing employees more productive can alleviate the long-term cost of excessive employees. A capital investment in the short term can lead to long-term efficiencies and cost savings.
Before making the decision to hire an employee, consider your resource options. If the increase in workload for your company is project-specific or more short-term, consider outsourcing those duties to a staffing company or consulting firm that specializes in those activities.
For example, hiring a full-time accountant could be outsourced to a CPA firm or a bookkeeper. A six-month project that your company has won may call for a layoff at the end of the project. Laying off employees can negatively impact your firm's reputation. Additionally, training a new employee requires a significant amount of time and money invested. Make sure that investment makes sense.
Q: When hiring employees, how much priority should you put on technical versus soft skills?
A: The new hire must meet a minimum level of proficiency in the job function. You must know that they can get the standard requirements of the job done effectively.
Next, consider the type of role you are hiring. If the role is more of an independent contributor role that has little to no impact on others and essentially works in a silo, the need for soft skills is probably minimal.
On the other hand, if the role requires interactions with other employees, working on teams, or direct interaction with clients, the need for soft skills is much more important.
Understanding your organization's culture is key as well. Bringing on an employee who is a high performer but has very limited social skills into an organization that has a close-knit environment could be a disaster. Some employees don't feel the need or lack the desire to interact with co-workers on any type of social level. If the culture of your company does not allow for that, it could be a problem.
Q: What are the benefits of using a staffing company when you need extra help?
A: There are a number of benefits, such as:
- The ability to fill a short-term need without the worry of a long-term financial commitment.
- Speed of filling a need with a vetted resource at often a higher level of quality.
- Experienced staffing resources often require a shorter ramp-up period.
- Resources can be increased or decreased very quickly.
- Avoid the requirement to cover tax and benefit burden.
- Resources have been screened via background checks, drug screenings, reference checks, etc.
Q: How do staffing firms handle background checks?
A: Prior to starting a resource with any client, background checks are completed. Depending on the client's requirements, background checks can be local, regional, national or international. Drug screenings can be conducted upon hire as well as randomly throughout the course of the project. These background checks are rerun annually.
Q: What steps should a business have in place to ensure new employees get off on the right foot?
A: Ensure that on the first day of employment, the employee is set up with all required tools to do their job: computer, laptop, phone, email, security badge, office key, etc.
Their formal orientation should include a clear description of the company's purpose, goals, mission, vision; the organizational chart and description of other roles and responsibilities for their co-workers; and a clear job description for that employee's role. The orientation should also include an introduction to current staffers, a safety presentation, etc.
You also want to discuss with staff in advance of the new employee's role and ensure that there is not any animosity regarding the new employee. Ensure a willingness from staff to help the employee succeed.
Other steps include:
- Setting realistic goals upfront.
- Slow and deliberate training so that the new employee is not overwhelmed.
- A face-to-face meeting with upper management is always very helpful.
Q: What are some common mistakes employers make that hurt new employees' chances for success?
A: They have ineffective orientation or training, they assign too many tasks too quickly, and they have unrealistic expectations. They also don't appropriately prepare current staffers for new employees.
Q: How long should you give a struggling employee time to get on the right path? What are some signs that a separation is the best move forward?
A: Thirty days is the average time needed to get an employee struggling on the right path. But it is essential that the employee receives a formal PIP (performance improvement plan) that clearly defines where deficiencies are, what is required to maintain a satisfactory rating, and then provides that employee the tools or training needed to improve.
One should always ensure that the appropriate training was provided. Further, recognizing that some employees learn in different ways – verbal, visual, on the job, do-it-yourself – is valuable as well. Identifying the appropriate method or combination of methods can ensure that the employee has been properly trained and rules out this stumbling block.
Rapid-fire questions
Q: What piece of technology could you not live without?
A: Our most utilized piece of technology is our medical electronic medical records system (EMR). Being in the healthcare industry, all clinical notes must be appropriately documented in a secure, confidential, HIPAA-compliant system.
Our EMR system allows our clinicians to seamlessly record their patient treatment notes and save the documentation to a cloud. The EMR system can be accessed anywhere via Wi-Fi and allows immediate access to a patient's diagnosis, treatment plan, and treatment progress.
Q: What is the best piece of career advice you have ever been given?
A: As a young employee in corporate America, I learned from my fellow superstar co-worker to always show up to work 15 minutes before your other co-workers and leave five to 15 minutes after your last co-worker has left. This always ensures that you appropriately prepare for your day and to recap your day's activities at the end of the day. It also gives management and your fellow co-workers the perception that you are willing to go the extra mile and work harder than others.
Additionally, at another company, our senior leadership team brought in a consultant to help fix our broken processes. The gentleman was very sharp and knowledgeable and seemed to be light-years ahead of our company management team. He shared with me his key to success: constant learning. He told me that most people simply won't pick up a book, trade magazine or industry periodical and learn about their craft. Most won't take the time to attend development courses, trainings or conferences to learn about cutting-edge ideas or futuristic thinking. In short, they are lazy. They would rather pay someone who has taken the time to read, learn, grow on their own and can come put that knowledge into a quick, concise package for them to quickly learn from – essentially the microwave approach. Quick and easy.
He said that he was no smarter than anyone else. He was just willing to invest in himself and constantly be in a state of learning. Since that conversation, I've always tried to learn as much as possible.
Q: What's the best book or blog you've read this year?
A: The Culture Code: The Secrets of Highly Successful Groups by Daniel Coyle.
Q: What quality do you most seek in an employee?
A: The ability to learn quickly and to multitask.
Q: What's the biggest risk you've taken professionally? Did it pay off?
A: We started our staffing company in 2011. At that time, both myself and my partner were still fully engaged in other projects. My business partner was the CEO of an outpatient physical therapy clinic that was keeping him busy, and I was a senior manager for an engineering firm. Both of our careers were lucrative, but we wanted more, and we realized that our business idea had the potential to be something great.
We managed our staffing company part time and relied on an office manager to handle the daily operational tasks between 2011 and 2014. During this time, we realized modest growth. We could see the potential in the company, but the growth was stifled by our limited or partial commitment to it.
In late 2014, I had gotten enough of corporate America and had to make a change. Financially, I wasn't in the greatest position to jump out on my own but had faith that God and hard work would prevail.
In 2014, I finally left corporate America to work full time as CEO of Sterling Staffing Solutions. I remember asking my wife for one year at this entrepreneurship thing – [and] if it didn't work out, "I can always go get another job." Within the last 3.5 years, our company has grown by 450%, and we are on target to have our biggest year yet. We've earned several accolades, including being identified on Inc. Magazine's 5,000 Fastest-Growing, Privately Held Companies in America for the past three years in a row. I would say that the risk definitely paid off.
In summary: 9 actionable tips on how to hire for your business
To summarize our conversation with Carter, we've condensed his insights into nine actionable steps on how to get the most out of your hiring process, from the employee hunt to the onboarding and training stage. We've also given rough estimates of how long each step should take.
1. Know when to hire.
When small businesses initially launch, one employee is often responsible for tasks that would normally fall to many workers. As your business grows, this imbalance in responsibility can reduce not only your efficiency and productivity, but also the quality of your company's products and services. This becomes a problem when you start noticing an increase in service failures, customer complaints, employee burnout, overtime, and employees' inability to meet deadlines. When you see these indicators, it's time to hire someone new. It may take two to four weeks to become apparent that these trends are permanent troubles rather than temporary woes.
2. Create an organizational chart for your company's jobs.
As your business grows, you'll also come to realize that you need effective departments for not just your main products and services, but sales, customer service, internal operations, office management and payroll. Anticipate these needs by creating an organizational chart that lists every job your business needs and all the responsibilities each entails. This will make your employee search significantly easier. If you set aside some time every day to work on your organizational chart, you should complete it within two weeks.
3. Reevaluate your needs before hiring.
Now that you've detected a need for extra help in the office and determined what each role in your company will look like, you'll probably feel ready, if not eager, to hire. But what if hiring someone on a short-term or temporary basis is more effective for your company's needs? For project-specific or shorter-term needs, you can turn to a staffing company or a freelancer for help instead. You should make this decision after a few days of considering your business's operations and finances and how you can balance the two.
4. Develop and post a job listing.
One of the easier parts of the hiring process is posting your job listing. Since you've outlined the work required for each role in your company, you'll only need a few minutes for each job listing you create. Be sure the job listing is clear on what you are looking for. You don't want to spend time reviewing resumes and interviewing candidates who lack a clear understanding of the role you want to fill.
5. Interview and screen your best candidates.
No hiring process is complete without a job interview. After posting your job opening and receiving numerous applications, you'll want to choose several to interview. Don't just pick one or two, even if one or two candidates really stand out from the crowd. It's worth identifying at least a handful of options in case your top choices don't pan out.
Once you have your list of interview-worthy candidates, set aside at least half an hour for each interview. You may want to set aside another hour for a second interview with any candidates you move forward in the process. Once you have identified a candidate you want to extend an offer to, you should consider conducting a background check using a quick and easy software platform. This will ensure there aren't any major red flags about someone before you bring them on to your team.
6. Make an offer.
When you've found the candidate you think is a good fit and conducted the appropriate background and reference checks, you can make an offer of employment to the candidate – including all of the salary and benefit information, ready for them to review. While some applicants might jump at the offer, be prepared for a bit of negotiation. Candidates may ask for some time to consider the offer. They then may come back and ask for more money or additional benefits. Ideally, you will come to a fair and equitable agreement for your business and the candidate. If you have some hard numbers you aren't willing to go past and negotiations reach that point, you may have to move on to another candidate. With all of this in mind, this step could take anywhere from a few minutes to a few days.
7. Begin the onboarding process.
When your new employee comes on board, they need to fill out the appropriate new-hire tax forms, and be sure to report their hiring to the government thereafter. You should also onboard these hires onto your HR software or platform. In total, this process should take an hour or two at most.
8. Ensure your new employee has all the tools they need.
Giving your new hires the tools they need to do their job can be a long-term project, but each step should take just minutes. For example, if you need to order a work laptop for a new employee, you can make the purchase in moments online. As other job necessities become obvious, you can set aside a few minutes to place these orders as well. Ideally, however, you will take into account all of the responsibilities your new hire will have on their plate and make sure they have all of the tools they need from the start. You don't want to slow down their work because they are waiting on a piece of equipment or access to some new software.
9. Train your new hire – and do it right.
In our interview with Carter, he stressed the importance of proper and thorough training. No two companies will need the same amount of time or take the same steps to train a new hire, so estimating how long your new employee orientation, proper co-worker introductions, and other important onboarding steps will take can be difficult. You definitely don't want to shortchange your business or employee here. Investing quality training time upfront should pay off in the long run. What matters most is that you take ample time and care to show your new employees all they need to know.
Max Freedman contributed to the writing in this article. The source interview was conducted for a previous version of this article.