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Maximising the staff equation

HOW do you find out whether your business needs more staff and how do you go about finding them?

While the answer to the first part of the question may seem simple, the financial implications of taking on more staff adds another variable to the equation.

Human resources experts agree that, in simplest terms, businesses need to add more staff when they cannot cope with present demand.

Other factors affecting the choice could include the company’s future plans. Is it planning to grow? Is it planning to open new offices or enter into new markets? Has demand increased for its offerings?

Small Business Development Corporation managing director George Etrelezis said one sign alerting small business operators of the need for more staff was when they started spending more time working in the business than work-ing on it.

“If that is the case then the business will never grow,” he said.

“The balance factor is another one. If you are not careful you find your-self getting ground into the dirt.”

Mr Etrelezis said a lot of small businesses often employed too many staff.

“They get caught out with a busy period or through seasonal factors and take on extra people,” he said.

“When things slow down, however, they find there’s little work for those new employees to do.”

Beilby general manager Rick Dunn said managers would soon realise when they needed more staff.

“When things start falling through the cracks regularly then it is time to take on new staff. When sales aren’t where they should be is another telltale sign,” he said.

“It comes down to the objectives of the organisation. Are they in a growth phase? Are they looking to open a new division?”

People Soft executive director Tim Ford said the choice to take on new staff often came down to questions about what was driving the company.

 “If it is a manufacturing company and it can’t meet what the market is asking for then it may need more people. If it’s a service company and it can’t service its customers then it needs more people,” he said.

“However, you’ve got to be careful. Is the demand seasonal or long term? Is the market growing for that service or product? Is there opposition in that market?

“One of the best ways to answer these questions is to use a SWOT analysis.”

Standing for strengths, weaknesses, opportunities and threats, a SWOT analysis helps a business owner work out what his or her business’s strengths and weaknesses are and what opportunities and threats face it.

Mr Ford said businesses had to be careful with their staffing decisions because of the financial implications.

“You have to make sure your company can cover the cost,” he said.

“There is often a gap between incurring the expense of new staff and getting the benefits from them.”

Recruitment Solutions CEO Bunty Paramor said she would never add another desk in her office until “the staff I have are flat strapped and I see them working long hours regularly”.

Mr Etrelezis said that, after leasing costs, staff costs were the highest ex-pense facing most small businesses.

“You need to be looking at it as a value add on to the service you offer,” he said.

“Another way to look at it is as a way of freeing yourself up to explore new avenues of income. Your business will never get that new client until you free yourself up from your existing work.”

Ms Paramor said one of the classic scenarios for needing more staff in WA was when a company decided to move its head office to Melbourne.

“Quite often they are looking for new staff because the ones they have over here don’t want to make the move east,” she said.

“In many cases adding staff comes down to what the company’s strategic plan calls for.

“If the plan calls for growth you know you are going to be needing more staff.”

Ms Paramor said companies should often look within their organisation before advertising for new people.

“A good company always has a promotion-from-within policy so staff know they will be given first chance at new opportunities within the organisation,” she said.

“That way they don’t have to look at going to another job for a promotion.

“So many times we’ve gone to press with a job advertisement and the client has rung up and said they had found someone internally that would ‘be perfect for the job’.

“But sometimes a company will say it needs new blood and ideas.”

Mr Ford said promotion from within often worked best in companies with diversified operations because staff had a chance to try different things.

“But in smaller companies they may not have the depth,” he said.

“You have to be careful about going out and hiring. Why is the person on the market? Sometimes it’s better the devil you know than the devil you don’t.

“Companies often go out and hire on a technical skills basis but pay little attention to their soft skills.

“If you are hiring a senior person they don’t necessarily need to know the technological side of the business because you should have people working under them that have those skills.”

Mr Dunn said when it came to hiring decisions, people were essentially just another resource.

“You need to analyse what the company has and what it needs and what the best way is to go about getting it,” he said.

“I believe it is the right thing to do to look within the organisation before hiring people from the outside because it gives that organisation’s people room to grow.”

p Next week WA Business News starts a four-part series on recruitment agencies.

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