Thanks to layoffs and hiring freezes, there are a lot of talented people looking for jobs. But how can HR figure out if it’s the right time to add staff?
It can be a great time to hire. Here’s how to calculate whether hiring makes sense for you now, according to Diana Ransom of the Wall Street Journal:
- Pick the right areas — Some departments may need more people, while others have too many. The first step in deciding when to hire should be to talk with managers and find out where increased headcount is necessary.
- Estimate future sales — Sales reps can talk to existing customers and ask how much they plan to buy in the next 12 months. Also, ask the sales manager to estimate revenues from new customers.
- Project added revenues — This can be tough to do for some positions, but Ransom uses the example of a production worker: If an employee can build 5 units per day, and each unit sells for $40, that’s $52,000 of revenue a year (as long as sales thinks it can sell that much).
- Add up all costs — It’s important to keep in mind the total costs of hiring and employing a new person. In addition to salary and benefits, look at time and money spent recruiting, training costs and any equipment that must be purchased to accommodate a new worker.
- Figure out profits — Use total costs compared to added revenues to estimate how much the company will make on its investment.
- Hire temps — If there isn’t enough room in the budget to hire workers full-time, you can try hiring through a temp agency. That way, you’ll also avoid laying someone off if there’s no longer enough work in a few months.