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If you are like most businesses you want to grow and hiring employees is usually a necessary step in that process.


One of the biggest questions we get when this step starts to take place is ‘can I afford to hire this person or not’, and then ‘if I do hire them what all do I need to get my paperwork setup?’

The reason for the first question is usually tied the pocketbook.  Do I have work for them to do? Can I afford the cashflow hit? How long will it be before they are actually helping our productivity instead of hurting it? 

The second question is because of the big bad IRS and not wanting to get scary letters in the mail. The first one is best with some experience, consultation, and what if scenarios. 

Here are some metrics you can look at from a cashflow perspective.

Do you have this persons salary saved up for the next 2-3 months?  This would be ideal. 

Have you projected out the revenue that this person is going to generate or the added production the team will produce with this person? Is this person a necessary hire because you currently don’t have skillset in house and you can’t outsource it.  How much and how fast will this person help improve the business’ ability to generate revenue?

It’s hard in the very beginning to understand what those numbers look like, you don’t know what they’re going to do. You try to do the best you can to do the math and figure out the hiring cost.  It could take you two, three, six months where this person is fully productive and then it’s going to cost you inefficiencies on your own.   There are just so many unknowns. 

We recommend you create some good, bad, and ugly what-if scenarios where you look at each of these scenarios from a couple of perspectives and make sure that you truly can afford this person.  When you feel understaffed it is hard to put current work situations in perspective. 

Maybe instead of hiring you can outsource the work.  Maybe you don’t need a full time person.  Or maybe you need two people to ensure that you don’t get back to zero people if one of these people don’t work out.  All of these are scenarios you should put pen to paper.  We can help with these what-if scenarios.  We often have these issues come up with our own business as well as with our clients.

Now the real fun begins, you have hired someone.  This is the same paperwork most of the time if you are hiring your first employee or you have 100 employees.

If this is your first hire, you have never done this before so you need to create your rules.

You’ll need a handbook, and you’ll need to know what your policies are.  What are your hours of operations going to be?  How you are going to handle holidays, vacation requests, benefits?  There are a ton of items you need to address with even the very first hire.

We HIGHLY recommend that you find a reputable payroll or HCM company to help you. Hopefully it is us here at Whirks, but if it isnt you still should not do this alone.

You will need to make sure you have all of your tax paperwork, hiring paperwork, policies and procedures in place.  You should also have your definition of what winning looks like for this new person.  We call this a KRA or Key Result Area.  You will need to ensure if this person is an exempt or non-exempt employee for overtime purposes.  You will need to determine if they are hourly how are you going to capture this time.  There are a lot of other issues to consider as well so it is important that you have someone in your corner helping you each step of the way.

If you are deciding to hire or have already done so and now are thinking you need some help, we would love to have a conversation.

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