Successful start-up businesses can be prone to periods of very strong growth that are sudden and unexpected. While strong growth is welcome, it can be difficult to manage, and hiring staff is often one of the trickier issues to solve. When you are hiring you have to keep in mind that employing permanent staff involves a commitment over the long term, while the business growth you are experiencing may slow in the future.
Predicting growth and hiring accordingly
At the start of your business, you are unlikely to note steady and predictable growth. Seeing the first spurts of growth can be very exciting, but it is important not to overreact and start hiring employees extensively. This may come at the cost of not being able to fulfil customer orders, but hiring staff for permanent employment while your future revenue and growth are uncertain could ultimately put your business under a lot of strain.
Instead, try to grow your business in stages. Initial spurts of growth in response to an advertising campaign could be a signal that you need to slightly tone down your advertising efforts in order to manage your growth rate. Once you have achieved a stable level of business, you can re-assess; try to strike a balance between growing at a manageable rate and the hiring commitments that rapid growth involves.
Hiring on flexible terms
One very useful way to deal with labour demands while your business is growing unpredictably is to hire contractors instead of permanent employees. Contractors can be hired for a set period or when you have an ongoing commitment – in terms of supplying products and services – may be retained for as long as the job lasts. Working with contractors introduces some complexities when it comes to paperwork because they are dealt with differently than permanent employees.
However, contractors who are employed by an umbrella company are less problematic to work with because the latter helps the former to manage their paperwork. This help can be in the form of contractor tax help and advice on other legal and financial issues pertaining to their employment. Workers who function in a way similar to fulltime employees need to be aware of regulatory issues such as IR35 which governs taxation on income – contractors who work via an umbrella company will be well informed about this.
Get the right key personnel from the start
Instead of hiring many junior employees to fill customer orders and over-committing on permanent salaries, consider making use of contractors for the less demanding roles. When you reach a stage where growth is uncertain, you should keep permanent positions to a minimum and hire experienced and qualified staff as managers, putting them in place as the pillars on which you build your business.
By selecting for permanent employment the workers who are the most highly skilled, you can ensure that you retain the best skills even when your growth rate slows down. Focus on paying and retaining these highly skilled workers while topping up your labour requirements with contractors and you will be able to successfully ride the wave of growth, while remaining adaptable to changing business circumstances.