The Pros and Cons of Hiring Your First Employee

The Pros and Cons of Hiring Your First Employee

Starting your own business is invigorating; for most it is the fulfillment of a lifelong dream. When your business starts to do well, you might feel even more exhilarated ― until you realize just how much you have to do.

After a certain amount of success, most entrepreneurs consider hiring one or more employees, and you are likely doing the same. However, employees carry considerable risk, which means it is imperative that you consider the pros and cons of adding someone to your team before you schedule any interviews.

Pros: Why You Need Someone to Work With

In the history of the Fortune 500, the list has never once featured a business that lacks employees. To push the limits of your success, you definitely need to form a team, and with any luck, that team will grow into a company, then a corporation, and finally a global enterprise. The reasons two people are better than one (in business) are as follows:

Extra hands. By adding an employee to your business, you can double the amount of work you do. The additional pair of hands (and accompanying brain) will be able to take over the menial tasks while you focus on ways to grow and improve your business. That added productivity is nothing to scoff at, considering how much faster you can complete projects and get paid when you don’t have to juggle all your business responsibilities at once.

Additional insight. No two people are exactly alike, which is a curse and a blessing. On one hand, adding someone new might make you uncomfortable in more ways than one. However, much more likely is that the newfound diversity in your workspace takes your business in fresh and profitable directions. You might be a self-made entrepreneur, but your employee might have an MBA, providing you with exciting opportunities and unknown business insights that bring you both success, while also opening your eyes to new avenues of growth (both professional and personal).

Commitment to company. You sank everything you have into this endeavor, so the idea of bringing someone less connected to your business might seem daunting. However, employees who come in on the ground floor are much more likely to become as committed as you are. By becoming a part of the story of the business, your employee will feel part of something larger, which is important for many young, enthusiastic job-hunters. Plus, the pay and benefits don’t hurt at keeping employees around.

Cons: Why You’re Better Off on Your Own

Then again, full-time employees can be quite a burden. If you make a mistake and hire the wrong person, your small business could be reeling for months. Your business needs to be rock-solid before you can consider bringing on someone new, so if you have any doubts about your financial solvency, you might save that job board ad for later. Here are some reasons to stall the hiring process:

Costs of salary and benefits. Employees are expensive. More likely than not, you’ve been reinvesting any and all income you’ve generated back into your business, but few employees work for free. Though you might ship the idea of payment in company shares or stock options, you should still understand how much you can afford to pay your first worker, just in case.

Costs of hiring/training time. Generally, the smaller your business, the more time and money you waste during the hiring process. Because you can’t work while you’re reviewing applications, interviewing, and training your new hire, a new employee costs you an absurd amount: around $50,000, according to the Centre for Economics and Business Research. Fortunately, the more employees you hire, the lower the cost of the hiring process.

Inflexible work hours. When you work for yourself, you can usually start and stop work whenever you want. Unfortunately, this isn’t true once you have an employee to look after. Though the internet has made flexible work time more feasible, you will need to work alongside your new hire for a while to make sure he or she accomplishes tasks to your standards. Like it or not, your first employee is the start of your 9-to-5, 40+ hour work week.

Only you can determine what is right for your business, which means only you know when the right time is to hire your first worker. By weighing the pros and cons ― your need versus the costs ― you should be able to decide whether to hang the “Now Hiring” sign up in your window.

Editorial Team
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