The most important investment for small business owners is their team. You can’t grow if you don’t make correct hiring decisions, and it’s safe to say that the risks of hiring the wrong people or failing to find the right people stretch far beyond a little chink in productivity. Research conducted by the Center for Management and Organization Effectiveness determined that as much as 80% of employee turnover is due to bad hiring decisions. You would think that a new employee needs only a number of months to match the output of an existing employee but this process can actually take up to two years.
Then there’s the additional damage that comes with disappointed clients, equipment not being used for what it’s worth, and lost productivity from other employees who have to pick up the slack. Like any other investment, the best ways to guarantee that you hire the right people is by having more time and money at your disposal.
Employees And Customers Are A Lot Alike
Small business owners who are hesitant about putting so much effort into hiring need to understand that good hiring = good business. All the resources required for recruiting are essentially the same resources required for attracting new clients or customers. One example is your online presence, which consists of your website, social media accounts, and pay-per-click ads. No one is going to want to work for you if any of these three elements are lacking, just like no one is going to want to give you their business for the same reasons. So when you invest in expanding or improving your online presence, you are really killing two birds (employees and clients) with one stone.
The first considerable expense associated with hiring is paying a reputable private company to tackle at least two of the aforementioned three elements for you. Some digital marketing companies even specialize in building employment funnels as well as sales funnels, which will prevent time from being wasted on unqualified candidates and bad leads. You probably wouldn’t think of using a small business loan to increase staff until you realize that the investment you’d be carrying out will be designed to increase revenue via new employees in addition to new customers.
From Freelance To In-House
Further evidence of the importance of hiring lies within the rise of the “gig” economy. More and more business owners have found that taking qualified contributors on “test runs,” rather than immediately making them full-time workers, decreases the likelihood of an bad hiring decision. If the work isn’t up to par, the money you lost is nowhere near the amount you would be at risk of losing if this person was your newest in-house employee. A great deal of the gig economy is occupied by the digital marketing-related fields. As your company grows, these are the kind of people who become much more vital to success. It’s easy to imagine a freelance social engagement specialist, for example, becoming a full-time employee.
Since the gig economy is arguably a more fruitful endeavor than full-time work, convincing someone to exit this lifestyle can be expensive. But here’s where that investment mentality comes in: you’ll be getting more work out of this person while saving the time of having to fill the role through traditional recruitment methods.
You Can’t Invest Without Business Funding
Alternative business financing companies like United Capital Source have developed small business loans tailored for two types of new hires: Those that begin contributing to your revenue stream in a matter of weeks and those who are more like long-term investments. They don’t start bringing in revenue until several months have past but their value increases tremendously over time and they contribute to more than one revenue channel. The former situation is usually best-suited for a short-term working capital loan whereas the latter might call for a merchant cash advance, especially if a major goal of the new hires is to increase online sales.
Merchant cash advances are repaid when sales are made so the bulk of the advance is repaid when sales volume increases, and you’d receive a lump sum that would compensate for your additional payroll during the new hire’s first months of work. The previous scenario of hiring a digital marketing company to improve your website and create ads for relevant Google searches is perfect for credit card processing loans as well. There’s no set due date, so as long as your projected sales justify the amount of funding you request.
Move Quickly Or Not At All
A 2017 survey by WorkConnect revealed that the most qualified job candidates are in new positions within ten days of posting their availability. This suggest you’re probably going to need cash fast if you plan on filling an important position. Numerous alternative business financing companies can approve applications for small business loans very quickly but only a few offer the involvement of living, breathing human beings capable of customizing terms for your individual financial situation. Their business funding programs are more complex so your hiring process doesn’t have to be. Thanks to alternative business lenders, even companies with fluctuations in revenue can snatch top talent before it’s too late.
Photo Credit to John Jones