Even if you are sure you need to staff a position,
you still need to consider whether you should hire a
full-time employee or outsource the work. Follow these
steps to evaluate the benefits and costs of both
options.
Review your growth goals and operating
budget.
You need to have both your goals and your budget
in mind as you make the outsource versus hire
decision.
Determine the tangible and intangible
benefits you could realize if you hire.
Forecast the extra income a new employee could
generate in his/her first year with your
business. If you're hiring a sales associate,
for example, forecast the amount of new business
he or she could bring in. If the individual's
work is not so directly connected to the bottom
line, make your best estimate of his/her impact
on your business profitability.
Consider other less tangible ways that a new
could help you achieve profitable growth. For
example, could this new employee free you up to
do the following:
Spend time with valued customers to ensure
their continued business
Attract and win new business
Develop new products or services
Work on operational or financial projects
to make your business more profitable or
accelerate its progress toward your growth
goals
Determine the costs of hiring.
Calculate the minimum salary and benefits
you would have to pay the first year
Add the extra costs involved in recruiting
and hiring a full-time employee
Add the costs of orientation, training,
mentoring, and supervision
Compare benefits with costs and decide
whether to hire. If the benefits
(tangible and intangible) exceed the costs of
hiring, you can justify hiring a full-time
employee. But if the costs exceed the benefits,
you should explore the following options:
