When to hire and who to hire

Why do you want to hire another employee?

It might be to give your company access to another skillset, help you deal with seasonal demand, or simply to fill a gap in the rota.

Whatever your reasoning, your new employee will play an important role at your business.

But staff also come at a cost. In service-based industries, for example, payroll costs can account for up to 50% of revenue.

For small businesses in particular, the financial impact of hiring another member of staff can be significant.

That’s why it’s critical to be certain that hiring another employee is the right route to take. You know your business better than we do, but there are some common signs that now is the right time to hire more staff.

10 signs it's time to hire

Unsure if you're ready to take the leap? See how many of these signs sound familiar...

1. Your staff are working long hours of overtime on a regular basis.
2. Routine work falls by the wayside — it's delayed or never completed.
3. You can't maintain your usual levels of customer service.
4. Your quieter periods are becoming shorter and busier.
5. You’re confident in your financial position — both your profit and your cash flow.
6. Your team is missing skills and training current staff isn’t working.
7. Your business is on the up. Forecasts and projections are positive and you’re confident that strong sales will continue.
8. You have the space and facilities to cater for another employee.
9. Your employees are concerned about their workload.
10. You’re having to outsource more and more tasks.

If you're ready to take on more staff, your next decision is this: what type of employee should I hire?

Types of employee and worker: explained

In today's job market, you have far more options available than just hiring full-time employees. Let's take a quick look at your choices.

Full-time employees

Full-time employees work for at least 30 hours a week and are usually paid a salary rather than a wage. About 74% of UK employees work full-time.

Hire if...

Avoid if...

Part-time employees

Part-time staff are contracted to work less than 30 hours, but their contracts are otherwise very similar to those of full-time employees. Contracts are (usually) permanent, but hours of work aren't necessarily fixed each week. Part-time staff often have the option to work overtime when required.

Hire if...

Avoid if...

Zero-hours workers

Note: This section is subject to change. The Employment Rights Bill is expected to ban or significantly restrict the use of these contracts.

Workers on zero-hours contracts have no guaranteed hours from week to week. They can be rota'd to work whenever the business requires, and are entitled to decline work with no negative consequences. In many cases, staff on zero-hours contracts are workers rather than employees, and therefore have different rights at work.

Hire if...

Avoid if...

Contractors

Contractors are skilled individuals working either on a self-employed basis, or are employed through an umbrella company (an intermediary that pays the contractor on behalf of the client or recruitment agency through PAYE). Contractors take on fixed-term contracts covering a set time period or project, and expect to change clients on a regular basis.

Hire if...

Avoid if...

Interns

Interns are students or trainees working on short-term (two week to six month) contracts to gain work experience in a specific field or role. Internships can be paid or unpaid, but unpaid internships are on shaky ground legally in the UK.

Hire if...

Avoid if...

Apprentices

Apprentices are trainee workers who gain a formal qualification at the end of their placement. The work element of the apprenticeship is accompanied by off-the-job training carried out by the employer or the main apprenticeship provider.

Hire if...

Avoid if...

The costs of hiring (and not hiring)

If you're still unsure about which type of worker to hire, or whether you should hire anyone at all, it helps to work out how much a new employee might cost you.

Even if you're confident you're going to hire someone, we highly recommend estimating how much you'll be paying out — not just in terms of salary, but other onboarding and facilities costs.

Take into account:

• Salary or wage
• Recruitment agency or advertising fees
• Employer's pension and NI contributions
• Other benefits
• One-off costs including a new computer, uniform, and initial training
• Ongoing costs including office supplies, software fees etc.

There are plenty of online calculators to help you add up all these different costs. Here's one from Cast UK that's a good starting point.

You might balk at these costs, but you have to weigh this figure up against the cost of not hiring an employee. This number is more difficult to estimate. Most of these costs will be opportunity costs — in other words, benefits lost because the business didn't hire an employee.

These might include:

• Lost productivity through stress and fatigue
• Increased employee turnover due to burnout
• Stalled growth because of missing skills and expertise
• Reduced customer loyalty due to poorer customer service
• Reduced sales because of lack of stock management, marketing analysis, acting on changing trends etc.

It is a challenge to put a number to any of these costs, but comparing the costs and benefits associated with each pathway (however vague they are!) can still be useful.

Writing a job description

If you choose to go ahead with recruitment and know what kind of worker you want to hire, the next step is to note down the duties the new employee will have — in other words, a job description.

Even for low-level roles or contracts of only a few hours a week, it’s good practice to write an up-to-date job description so that there’s never any confusion about duties and responsibilities.

Your job description should start with the job title of the role and who the new employee will report to. Next, write a sentence or a couple of bullet points describing the main purpose of the role. For example, for a sales assistant role:

Next, detail the responsibilities and duties associated with the role. Bullet points will do — just ensure you cover almost everything you think is relevant.

Continuing with our sales assistant example:

You should also include key performance indicators (KPIs) in job descriptions, to give additional clarity to the role. In our sales assistant example, we might mention sales targets or customer service goals in the job description to show that these are the main priorities of the role.

Here's a sample job description you can download and print off for reference, as well as a template that you can fill with your own information.

Person specification

You know what you want the new employee’s duties to be — now you need to specify the skills, qualities and qualifications you want them to have in order to fulfil said duties. The person spec is usually livened up for job adverts, but it’s chiefly used as a tool for comparing candidates in a fair and objective way.

A person specification is usually displayed as a table with selection criteria in the left-hand column and details of the required skills in the other. Sometimes this column may be split into essential and desired skills.

For example, under the qualifications row, our sales assistant might have nothing listed in the ‘essential’ column, but might have C-grade or above maths and English GCSEs listed under ‘desirable’.

For a copy of a template or sample person specification, click the buttons below:

Summary

These initial steps may seem like overkill — after all, you probably knew what kind of person you wanted to hire before you even opened this guide.

However, now that you’ve considered all the options available to you and formalised your choice, the rest of the hiring process will be far less of a headache.

With a job description and person spec presenting clear guidelines of exactly who you’re looking for, it becomes significantly easier to narrow the field, host interviews, and make that final hiring decision.