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Have you made the mistake of hiring too soon?

Well, you may not be alone. Many executives and managers have made the mistake of using the financial and sales forecast to plan and execute hiring of new employees – so that they could be trained and up to speed when the demand arrives.

The balance between preparedness and cost

Although hiring early does add to overhead by bringing employees aboard before they

become economic contributors to the bottom line, there is much to be said about consistent or improved service quality by having trained employees already on the front line when the customers want and need them.

Perhaps it all depends upon how you want to deploy available cash during good times.  We’ll assume that you don’t have the freedom to do so when cash is tight.

Hiring when growth is steady or if unpredictable

So, there are periods in any economy or industry segment when growth seems steady and there are few warning flags ahead.  In such instances, it is much less risky for a company to execute its plans for spending in coordination with forecast revenues.

[Email readers, continue here…] But there are many more times in which the near-term future is far less predictable, and when early hiring decisions may be just the wrong move, reducing flexibility and reducing reserve resources.  It is during such more common times, that you should consider using temporary employees to fill demand as needed, even if brought aboard a bit early for pre-training.  And increasingly, there are off shore service providers able to contribute to production and service, expanding and contracting at will, with some sacrifice in control and sometimes in quality.

Your reputation with your employees at risk

Further, a company suffers in its reputation with its employees when hiring and firing in short cycles to meet short term needs, unless those brought aboard are hired as temporary or seasonal workers.  Every employee wants a stable work environment and does his or her best work in a culture of mutual trust as to continued service as a reward for good work.  Constant interruptions in the chain of command, changes within the ranks and threats of impending layoffs together combine to form one of the greatest impediments to efficiency and a strong corporate culture.

  • Michael O'Daniel

    I’m a great believer in cross-training. Instead of letting your people operate in silos, train them to handle some of the less-specialized functions across the organization. There’s no reason anyone in the organization, for example, shouldn’t be able to field customer service calls or sales inquiries in a pinch, and refer callers to the right contact or commit to a response within a time frame. Not only should internal resources who’ve been cross-trained generally be more effective than temporary hires, but cross-training can improve cross-departmental empathy, workforce morale, fulfillment, brand support and other aspects of your culture that will benefit the organization in the longer term. That said, yes, there will be times when your fastest and most cost-effective solution will be temporary hires.

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