How do you staff a new or growing business?
Knowing who to turn to can be a bit of a conundrum. Do you dive right in and hire full- or part-time employees? What if your success doesn’t last and you are stuck with a team of employees with the associated payroll and benefit expenses? What about turning to friends and family or a staffing agency for help?
It might not be something you thought too much about when you started your business, but having a staffing plan can help your business prepare for success and ensure you have the right talent in place to help you scale and grow when the time comes.
Here are some options that you might wish consider as you review and prepare for your short- and long-term business staffing needs.
1. Hiring Friends and Family
Operating a family business has a nice ring to it, and of course if the talent and willingness is there, why not use it? Friends and family can often step-in and help you out on flexible schedules and terms. If this is an option you can take advantage of, don’t abuse it. Give your nearest and dearest clear goals and objectives, and compensate them fairly and within the law.
You should also be aware of several regulations that come with working with family. Read Running a Family Business Within the Law so that you are aware of legal, tax and labor laws that may impact your decision and how you operate your business.
Temporary agencies specializing in communications, accounting or legal work can be a source of job candidates. Many do direct hires, and temp-to-perm options are a great way to test an applicant before making a decision.
2. Consider Independent Contractors
Hiring an independent contractor or freelancer is another flexible approach to staffing your business. It’s also a great way of finding specialist help on an hourly or project basis (independent contractors specialize in many areas of business from HR and accounting, to marketing and web design). The best way to find independent contractors is word of mouth and referrals. Ask around. Use LinkedIn or Facebook to solicit recommendations from friends and acquaintances. Another alternative is to use online freelance "marketplaces" or "bidding" sites built solely for freelancers and the people who want to hire them – although if you are looking for a trusted resource, I always recommend getting a referral.
Independent contractors are technically self-employed, which means you don’t carry the burden of managing payroll, employment taxes and the other obligations of managing employees – which can result in cost-savings over time.
Remember, however, that it is your responsibility to ensure that you properly handle the taxation and other regulatory requirements involved with working with independent contractors. Read more about these in this Hiring independent Contactors Guide from Business.gov.
3. Turn to a “Temp” Staffing Agency
Many businesses turn to staffing agencies when they need to cover gaps in their employee line-up. Say, for example, if a team member takes extended leave or you need to temporarily fill a job vacancy until you can hire a replacement.
But what about turning to a temp agency for your permanent or semi-permanent staffing needs?
Temp agencies can help you quickly staff a position with qualified and screened candidates, which can reduce the recruitment burden. However remember that temp agencies take a cut of the hourly rate that you pay the “temp” (up to 30%) and often charge temp-to-permanent fees if you decide to hire that person full-time.
So while you may get an immediate fix for your needs – if the “temp” is the right fit – it can be an expensive way to staff your start-up or growing business. And don’t forget to consider the fact that one of your biggest goals should be building a team – how invested in the success of your business would a “temp” be?
4. Outsource Core Business Functions
When you don’t have enough hours in the day to operate your business and take care of your clients at the same time, outsourcing core business functions can be a cost-effective and headache-free way to go.
Tax specialists and accountants can help reduce many of the headaches associated with small business ownership – from payroll to tax filing – and the overhead can be a lot less than staffing this kind of help in-house. Accounting firms for example charge a flat monthly fee, which can be as low as $35 plus an additional fee per employee (often less than $5 per headcount).
Another area you might consider outsourcing is your administrative function. Virtual assistants can be hired for as little as $20-$50 an hour to help with all facets of your business – from managing your business expenses and maintaining inventory, to proofing and formatting your sales pitch in PowerPoint.
These articles might help you in your search for outsourced help:
- Need Help Starting a Business? Get the Right Kind of Advice & Take Control of Your Start-Up!
- Building your Finance Team - Do You Need an Accountant? Could You Benefit from a CFO?
- Selecting a Small Business Accountant
What’s Worked for You?
What staffing strategies have or haven’t worked for you as a start-up or growing business? Please leave a comment below!
Additional Resources
- 10 Steps to Hiring Your First Employee - This guide lays out ten easy steps for new employers to follow to ensure compliance with key federal and state regulations.
- Growing your Business as a Team: 10 Team Building Tips from the Real World of Small Business
- Are You Ready to Grow Your Business? – Five Tips to Help You Prepare for Growth
- How to Cope with Overnight Success (SCORE)
- 5 Things to Know About Hiring Independent Contractors
- Misclassifying Independent Contractors can be Costly
- Setting up a Payroll System – A 10 Step Guide for Small Business
Small Business Matters is brought to you by Business.gov to provide helpful and easy-to-understand tips for small and home businesses, including direct links to resources that help business owners to navigate the government maze. Business.gov is sponsored by the U.S. Small Business Administration to provide small business owners with access to federal, state and local government resources from a single access point. Business.gov creates a dialogue among business owners and the organizations serving them, making government resources and information more accessible to the nation's small business community. The U.S. Government and the U.S. Small Business Administration neither endorses nor guarantees in any way the external organizations, services, advice, or products included in any external website links. Furthermore, the U.S. government neither controls nor guarantees the accuracy.
