May 2010
May 2010 Newsletter - What’s Inside
In today’s economy, many small businesses and nonprofits face the challenge to decide if they should hire new staff t complete tasks or if they should outsource. In this issue of the Align newsletter, we will examine the topic of when to hire and when to outsource. The decision to make is ultimately the one that best meets the outcomes your organization has established. Nonetheless, you should consider several things as you weigh your two options.
Hiring New Staff
Organizations that reach capacity or establish new programs and services may consider hiring new staff to meet demands and implementation needs. There are four constants in the hiring process: Recruiting, Selecting, Training, and Motivating. Let’s take a look at these four constants as they relate to the larger decision of whether or not to hire new staff.
Recruiting new employees must be an ongoing effort because waiting until you have a need for new staff presents you with the challenge of finding a quality someone in a timely manner. Studies show that it will take one month for every $10K an employee makes for you to find a quality candidate. If you seek an experienced professional in a $50K range, it may take you 5 months to locate the right candidate.
Remember never to hire someone based on how much you liked the individual; instead, select a candidate who will add value to your organization. Make sure you invest time and efforts into the hiring process so the outcome is selection of a candidate that will be a high quality employee. Too often in a rush to hire, organizations may find that they choose a candidate under duress only to find in a few short weeks that they selected the wrong candidate. Taking the time to select employees who will help your organization achieve success will also benefit their ability to grow professionally and meet desired outcomes.
Once a candidate is hired, there is on-boarding and continuous training needs that you must address. The American Society of Training and Development surveyed organizations and determined that on average, organizations spend $134.70 per employee on training and development per year. While employees can seek training from a variety of outside sources and in multiple venues, including online, organizations are responsible to ensure that they are developing their talent through monitoring, evaluating and tracking professional growth. As an organization, are you well equipped to provide the necessary and ongoing training for new staff to ensure their professional growth and improve their abilities to provide quality programs and services for your clients?
Motivation has both soft and hard components. This means that you compliment and reward people who achieve goals and exceed outcomes, and immediately coach individuals who need improvement. Coaching and mentoring new employees also includes discussions about your organization’s vision, mission, goals and culture.
A tremendous number of organizations claim, “People are our greatest asset.” As your organization weighs the option to hire or outsource, be sure to consider whether you are prepared to invest the necessary time and capital into the hiring process to make that statement your reality.
The Option to Outsource
Perhaps your organization has encountered turnover in a critical area of your business, or maybe you have been awarded a new contract for services and need to increase staff to implement the contracted services. In either event, you may have reached capacity and are looking to fill positions within your organization. Is outsourcing an option for you? You betcha! Primary considerations for the decision to outsource should be placed on cost savings, service provision for efficiency and quality, and capacity.
Investing capital in new employees to provide services can be a challenge for small businesses and nonprofits. It can be pricey to bring new staff on board so the cost savings to outsource may be a better financial option when you consider salary, benefits, rent, equipment, training, and other costs for conducting business. The option to outsource provides a savings of your time and money that can be reinvested in primary service activities for clients.
If your current staff has reached capacity, you may want to consider the benefits of outsourcing that relate to service provisions. One benefit is that outsourcing enables you to keep your staff focused on providing services and get new business in the door while allowing external experts to complete quality services for you. Call center functions are an example where businesses can save time in assigning personnel to complete surveys, follow-up and business lead calls by outsourcing to organizations that employ qualified staff and have necessary technology to complete these calls. Account management and invoicing is another area where you can save valuable time by outsourcing these functions to reliable service providers.
Reaching capacity within your organization hopefully means that your business is growing and thriving. However, in order to continue with new business development and to ensure you provide quality programs and products, you must carefully consider how you allocate current resources and staffing. Organizations should consider investing major time and efforts on major things and minor time and effort on minor projects. To some small businesses and nonprofits, major things include implementing projects and getting new business. Smaller items that may tend to take a large amount of staff time include tasks such as benefits management and payroll, and can often get in the way of growing your business. These types of human resource functions can be outsourced to organizations that are capable and thereby enable your staff to remain focused on their major things
No matter the size of your organization, outsourcing can help with costs savings, service provisions, and capacity. Before you seek to hire a new employee, take the time to carefully weigh your options. You may find outsourcing selected functions and/or projects will help your organization grow and thrive during these changing economic times.