When is the right time to hire staff?
The third most common question for a bookkeeping firm after pricing, and how to find clients is when and how should I employ staff or contractors?
The answer is: when the time is right for you.
Things to consider:
What do you want for your business?
Do you want growth, or would you prefer to keep your business size stable and maximise client services like advisory?
Do you have a succession plan? Is the business all about you, or are you future-proofing by ensuring the business has sustainable processes and internal controls so it can carry on without you?
Are you a people manager?
Yes – good, you will need these skills.
No – can you upskill? Or should you consider appointing someone who can take on clients as well as self-manage and look after the future team.
How much billable time have you set yourself? If you’ve allocated 80%, this leaves 20% of your time to work on the business: marketing, client contact and growing your business if this is what you wish. In my experience, I left it too late to consider expansion. I was already way over capacity with my own time and did not have the time to induct and train new staff. This was hideous, and not much fun for anyone.
How to go about employing staff and contractors
- Clearly identify gaps in your own knowledge and technical skills (this is a good place to start when writing a job description).
- Prepare a financial budget for next six to 12 months to ensure your cashflow can afford this person. Decide if your business would be best with a self-employed contractor or employee, taking into account holidays, sick leave and ACC.
- Prepare a capacity plan. What percentage of time will this person need to be billable? Include your time for supervision and training.
- Write an advertisement, make it personal.
- Have compliance documents ready, you can build a letter of offer, employment contract, including confidentiality and restraint of trade from MBIE.
The interview process
Write interview questions. Build into those questions scenarios that you would like your candidate to articulate. For example, what do you do if the bank account does not reconcile? Have you ever been in a position where you were asked to code transactions to an account that you understood was not compliant?
At the end of the day, always be yourself. Remember, they are interviewing you just as much as you are interviewing them.
If you are not sure which direction to go in, then networking is one of the best ways to crowdsource knowledge. I love the way bookkeepers enjoy sharing stories and issues. There always seems to be a colleague who is happy to step up and help with advice.
The next big networking event near you will be our Xero Roadshow, which is a great opportunity to connect and talk all things bookkeeping, including staff capacity issues. Be quick though, many of our venues are filling up fast.
Xero Head of Bookkeeping