Is now the right time to hire another employee? Having the right number of employees on hand at any given time is a challenge for every small business. A surge in demand from a successful marketing push, a change in the marketplace, or some factor outside your control can cause orders to start pouring in.

It’s a good problem to have, but you don’t want to be caught shorthanded and risk losing sales or alienating customers.  At the same time, spending money to hire employees can be a gamble. If demand goes down again, you risk being forced to lay off workers.  How do you ensure that you have enough people on hand to keep everything in your business running smoothly?

Here are six signs that the time is right to add a new employee:


  1. You’re paying too much overtime.

When things get busy, it’s understandable to ask your employees to work more hours. It’s easier than hiring someone new, because you can simply scale back on the overtime if your workload fluctuates. But paying overtime is expensive. And if it goes on for an extended period of time, you risk overworking your staff and burning them out. Sometimes, the warning signs don’t show until it’s too late. If you find yourself always paying overtime, it’s time to start hiring, before your best talent walks off the job.


2. There isn’t enough time in the week.

Are your employees always complaining that they have too much to do? It’s a common complaint. But if they have a legitimate problem, and you’re constantly running out of time to get all of the work done, take a good look at your key productivity metrics. You may be able to reorganize and restructure responsibilities to make your workflow more efficient, but that will only get you so far. If your employees never have time to take on more tasks, or spend enough time on their current responsibilities, it may be time to bring in some additional help.


3. You have a backlog of orders stacking up.

Keep an eye on the number of orders in your pipeline, and the amount of time it takes to fill each order. If you’ve done everything you can to work as quickly as possible and orders still aren’t getting filled, it’s time to start hiring more people. Every order is a commitment your business has made to a customer. Smart business owners will bring more help aboard before they start hearing complaints from customers. Missed deadlines or poor service can harm your reputation and cause your sales to slip.


4. You’re thinking about expanding your business.

Do you see an opportunity to offer a new service, add a new product line, or expand into a new territory? Sometimes, growing your business requires finding new talent with a higher level of knowledge or skill than you currently have on staff. Don’t let a lack of expertise or staffing hold you back from building the business you envision. If you’re thinking about adding a new revenue stream, but your current skill set is holding you back, it may be time to add additional employees to help your business expand.


5. You just know the time is right.

Is a little voice inside telling you that it’s time to hire more help? Sometimes, all of the number-crunching and spreadsheets in the world won’t tell you what your instincts will. If your gut feeling is that now is the time to hire, it’s important to trust that feeling.


6. You need to hire, but you’re worried about cash flow.

New employees add a host of additional expenses. Wages, workers compensation insurance, Medicare and Social Security taxes, training costs, benefits, new equipment – the list goes on and on. But you can’t grow your business without investing in it. To keep the cash flow going, many small business owners tap Into Accounts Receivable factoring. AR factoring frees up the cash flow you need to hire help right away, keeping your business growing.