A company is only as good as the employees who work for it.” This seems to be the slogan driving most employers in today’s marketplace. Your employees are a direct reflection of your company and, in many industries, may actually be considered the product. Finding the right employee can be one of the most crucial and difficult decisions a business can face.
Businesses must be prepared for the hiring process and understand the steps involved. When an employer decides to hire a new employee, they must first determine the advantages this employee will offer the company. The employee may be a producer, responsible for creating, selling, or supporting the product and generating direct profits for the company. Alternatively, the employee may belong to the coordinator category, responsible for coordinating tasks with other producers to achieve the most cost-effective solution.
It must be determined if the efforts of a coordinator would benefit the producers in a specific company. A new employee may also offer your company the assistant qualities needed to free up the time of a higher paid employee. An assistant can be very valuable to your company by helping your executives become more efficient. Once the potential gains of a new employee are determined, the costs associated with this new staff member must be reviewed. The expenses of a new employee include salary, taxes, hiring costs, supervision, training, and equipment.
The employee’s salary, wages, and incentives must be taken into consideration. Additionally, the company must pay taxes, administration, and accounting fees for this person. The decision-maker should consider the hiring costs associated with the employee, including recruiting, advertising, interviewing, and selecting a new employee. The cost of supervising the employee can be calculated using a percentage of the supervisor’s salary based on the projected amount of time the new employee will require. Training costs can also be substantial, consisting of the direct and opportunity costs of other employees involved in training. Equipment such as computers, desks, safety equipment, and other technology should also be taken into account.
After calculating, reviewing, and analyzing the costs and benefits of an employee, several things must still be considered before developing a conclusion. A human resources or management decision-maker should compare and analyze the effect this employee would have on your cash flow. Realistic income projections can be compared to the initial and long-term costs of the employee. The fact that the employee may not be fully productive until several months of work must be calculated into the projections. For example, the person may take time to adjust to the position and handle a full workload, or you may not initially have enough work for the person to be working at full capacity. The deciding parties must consider the relative value and determine if the gain would be more from a new employee as opposed to investing the same time, money, and resources in current employees or procedures.
The decision to hire a new employee is very important to the company as a whole, as well as to the individual making the decision. A poor choice can reflect the person’s abilities and may indicate a weakness in decision-making to their boss, colleagues, staff, and customers. The company is responsible for ensuring that the new employee can do the job well and fit in with other members of the staff. When making the decision to hire a new employee, the company should keep in mind the importance of the task and consider the potential gain, projected costs, and advantages of the new employee.