What entrepreneurs need to know about expanding your workforce

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Kobus Engelbrecht of the Sanlam/Business Partners Entrepreneur of the Year competition says that a growing business can face numerous challenges, one of these being when to employ staff. "It may seem daunting for entrepreneurs to hire their first staff member, both from a trust and financial point of view. However, in order to grow a business, it is crucial that an entrepreneur has capable employees around that can support and assist the developing and growing business."

He says that the day-to-day running of a business can quickly become too much for one individual, and can easily distract entrepreneurs from spending the time necessary to grow the business. "Additional staff members will not only provide the entrepreneur with additional time to focus on the greater business objectives, but will also widen the business's pool of knowledge and resources.

"Hiring a driver could for example save an entrepreneur many hours which would have been spent on the road instead of in the office. Hiring an employee to manage the administrative side of the business will also provide more time for the entrepreneur to focus on the more complex duties which can drive additional income.

The correct type of employee is crucial

Engelbrecht says that hiring the correct type of employee is crucial, and can be tricky. He points to the latest fourth quarter 2014 Business Partners Limited SME Index, which revealed that SME owners have average confidence levels of 58% that they will find staff with the right skill set and experience. Skills were also listed as one of the main challenges SMEs believe they are likely to face in the next six months.

The next step after acknowledging that additional staff members are necessary is developing a clear and comprehensive written job description that stipulates all duties and responsibilities, says Engelbrecht.

"It is costly to commit to an employee's salary, and shouldn't be taken lightly and without research. Outlining the new role within the business will help ascertain the scope of work, and whether the employee should be part-time or full time and whether you should group some roles together, for instance a marketing person can double up as a receptionist. Entrepreneurs should also research whether the option to outsource certain tasks to freelancers could be more viable. Such suppliers may also have more experience than a full time employee within the business's price range.

He adds that a bad hire can also result in a loss of both time and money, and offers some advice when seeking potential employees. "Don't rush the process of hiring an employee. Ensure that the individual has the necessary experience and references, and that they are suited to a small business work environment - i.e. a setting without as many stringent rules and regulations as a larger corporate. It is also advisable to extend your recruitment search to your personal and business networks, however beware not to hire family members without the required experience. You can also ask for referrals from industry colleagues or friends. Not only will this save you time of placing adverts and searching through CVs, but you are also likely to find a more suited candidate."

When hiring new staff, entrepreneurs also need to be aware that they are creating a new role for themselves too, and that it is crucial that they embrace their role as a leader. "Workforce management and effective training of new recruits will result in benefits and opportunities - for both the employee and the business," concludes Engelbrecht.