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Timing the next employee hire for your growing agency

By February 11, 2019Team

Timing the next employee hire is one of the questions I am often asked. It’s a perplexing decision. Especially when you have multiple balls in the air in your agency, trying to grow while maximising your earnings.

In a nutshell, these are your next employee hire options:

  • Hire to cover your immediate skill requirement (the ‘quick hire’)
  • Hire slowly for cultural fit and long term potential (the ‘slow hire’)

By far the most common scenario is as follows: you are working on a couple of deals and unexpectedly you end up with more work that you thought would come through. Delivery dates for these projects are such that relying purely on your current team will simply not be good enough.  Your options are: get some contract help or hire an employee.

Contractors vs Employees

There are many arguments to the contractor vs employee debate. Here are some that you may not have confronted.

  • Contractors can be a great short-term solution, especially if you are looking for general skills. For more specialised skills though, using too much contract labour can seriously erode a project’s profit margin. So there’s that.

Intellectual property contribution

  • The other issue that most don’t consider is intellectual property contribution – that the knowledge and experience that contractors gain doing your agency’s work stays with them. Contractors make little to no contribution to your firm’s intellectual property development. So in the long run, your agency has to keep hiring the knowledge it constantly needs to do the work that the market requires. So you stand to lose out if you decide to sell your business someday, when there is a lack of depth to the available in-house skills. This is an important issue you should not dismiss.By contrast, good employees give you the opportunity to convert the cumulative intellectual capital that employees represent into permanent intellectual property, and that my friends, is the secret to exiting at a high multiple when the time comes.

Back to our scenario. So hiring the next employee looks like a better solution in the long run than contractors.

Well there’s more to it.

With those looming delivery dates, recruiting a new employee usually becomes a matter of urgency. When you do not have time on your side, who are you going to be hiring given your time frame?

Who’s in the Job Market?

Timing your next employee has a lot to do with who is in the market when you are looking. For a given job, generally, there will be a higher number of people out of a job looking then there are people in a job looking.  A person on the job market but currently unemployed will be available within zero to couple of weeks. A person currently employed, needs to give notice – typically a month for professionals – before they can start.

When you are hiring under time pressure, you have to hire. You cannot wait until a better candidate appears. That may be too late. So the odds are that you will hire someone currently out of a job that can start immediately. 

In general, the best quality candidates are not looking. They are in a job and have to be enticed and could well receive a counter offer from their employer for them to stay on. So your offer could well be declined and you may face further delays.

Other Considerations

In considering timing the next employee hire, there are several other factors related to hiring practises that are worth discussing briefly.

  • It is always best to have more than one shortlisted candidate. When you are only interviewing one person, there is little basis for comparison. When you have more than one, a comparative assessment can help you make the better choice. This is rarely the case when you are doing a quick hire.
  • When assessing a candidate, it is useful to approach each candidate in terms of four dimensions: skill fit, role fit, team/culture fit and long term potential fit. A quick hire however, will be made almost exclusively on a skills fit basis. As the pressing projects are completed, you are then faced with the longer term consequences of a compromised appointment, which may end up costing you.

When you are doing a slow hire, you can afford to be far more particular and discerning in terms of the other aspects of fit. In terms of building a strong team, these aspects need to be given full weight. Whilst this might not be fully apparent, unless and until you have an engaged and committed team in your agency, real growth will elude you.

All that said, when is the best time to hire?

It boils down to this. If you are running your business on a ‘let’s see how we go basis’ you will be responding to the ebb and flow of deals and to the vagaries of your ability to ‘steer the ship in a storm’. You will be hiring in response to the need created by jobs won in a somewhat unpredictable manner. The hiring compromises you may have had to make may ultimately force you to rehire. 

If you are running your business on the basis of a clear plan, your plan will dictate when you should be hiring. You will hire new team members in anticipation of the business you intend to win because the trajectory you put yourself on by executing your plan, makes the winning of business predictable in line with the implementation of your plan. You will be able to make far better hiring decisions, that will produce a stronger, more engaged and more valuable team, that will really help you achieve outstanding business growth.

Where does it all end?

With all that said, you may be wondering how all the other agencies out there are able to manage and keep moving forward? In reality, these issues, like many others, are inversely linked to agency size. In other words, the bigger you grow, the more skill depth you develop, the bigger your ‘buffer capacity’. More resource availability handily smooths out the occasional over-commitment and creates opportunities for more cross functional capability. In addition, when you reach a certain critical size, other than for highly specialised roles, instead of going out into the market to recruit, great-fit candidates will start approaching you with a view to working in your agency.

So how do you get to that state quicker?

Join the Scale your Agency program, where we help you to accelerate your success, help you grow your agency and make it a lot easier to run!


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