This month's Hot Topic
When you go into business, you dream of freedom, of the opportunity to make more money and the opportunity to build something successful.
With business growth and success, there comes a point in a business owner’s life, where they need to decide to keep growing their business and hire employees or stay a one person operation. So how do you know or choose which is best for you?
When I started my bookkeeping practice over 16 years ago, it was just me. I spent all my time working on client sites (back then they only had desktop accounting software) and building my brand and business profile. Within a short period of time I was inundated with more work than I could physically do, so came the decision to hire a couple of contractors.
Hiring contractors can be a great solution especially if you have project work, but it also comes with risk. That contractor is not committed to you like an employee is, they also generally come with more restrictions and cost more than an employee.
Fast forward a couple of years; business was steadily growing and I decided it was the right time to hire my first employee. I will be honest, hiring staff can be tough. Unless you have the perfect solution fall into your lap, there is a lot of work involved with getting the right employee on-board.
So, before you make the decision to hire an employee, there are some key areas you need to look at which will help you determine if you are ready to hire.
- You are turning down work
- You have identified new sources of potential revenue streams
- Your clients are complaining
- The quality of your services are suffering
- You do not have time to take care of your own internal paperwork, administration and bookkeeping
- You need someone with a specific skillset
- You never get time off or a break
- Your company and bottom dollar are not growing
- You can finally afford to hire someone
When you do make the move to hire make sure you look for someone who:
- Has similar values
- Understands your vision
- Is passionate
- Is qualified / certified
- Has a high level of emotional intelligence
- Is flexible and honest
One thing I did as part of my compulsory recruitment process was send the potential off to sit psychometric tests through a chosen provider. This helped me identify the ideal staff member based on how they thought, behaved and thought of themselves and their skills. It helped me eliminate candidates who appeared to be perfect for the role in an interview, but lacked important things that were required.
There are other tests you can do which include:
DiSC profiling – this helps determine their personality and the way they work
Accountests testing – this is a helpful platform specifically designed for Bookkeepers and Accountants
Another thing I encourage you to do is ask yourself – can you afford to hire an employee?
When thinking about hiring an employee, you need to know it is a costly investment. You do not just have to think about the cost of paying someone else’s wages. There is holiday pay, employee insurance, ACC Levies and Kiwisaver to name a few. Working out how much this is going to cost you is easier than you might think. For a basic breakdown, click here.
Also, it pays to brush up on the legalities surrounding being an employer – follow this link to the IR’s guidelines about employer responsibilities, including payroll, tax, records and the consequences of not completing your obligations as an employer.
Remember – if you are an ICNZB member, you have access to our closed Facebook group. It is the perfect place to ask other Bookkeepers who have “been there, done that” questions around hiring your first employee.
Wishing you a great month ahead.