how working capital can help you hire more staff
Your employees are the lifeline of the business. They help you get things done since the work is divided according to different specialties. For example, there are those that work in the finance department to make sure that your cash flows are in order, and there are those that work in the sales department to serve the customer and make sure that the inventory is moving. Depending on their experience and expertise, you pay your workers differently. For a business, labor costs eat into a large chunk of the profit margin. This is why small businesses avoid hiring more staff even when they need them. It just seems too much for the firm.
However, firms that do this miss out on big opportunities for growth. Even if you make your current workers work more in order to handle the expected increase in workload, they have their limits. Hence, hiring more staff is inevitable if you want your business to gain from an opportunity. One way that you can do this if you are cash strapped is by taking a working capital loan. You can use the extra cash to hire the extra labor and increase your firm’s earning potential.
How to Properly use a Working Capital Loan to Hire More Workers
1. Start an Onboarding Program
Once you hire a new employee, it’s going to take some time before they learn the ins and outs of your organization. For a small business, the new employee won’t have a fellow experienced worker teach them what to do because they are always busy. What happens in this case? You can’t hire an external company to come train your new recruit because it is expensive, and the outsider may not be the best teacher since they don’t know everything about your business.
The smart move is to invest your money into the creation of an onboarding program. For example, you can commission the creation of a role manual for all the positions within your firm. When new workers come into the firm, they take the first few days to study the manual and familiarize themselves with your operations. Then, they follow a senior employee in the same position, observing how they do their job. That way, the worker takes a shorter time to learn and adopt your firm’s culture.
2. Hire during the Low Season
Most businesses experience a high season when customers are in plenty and sales are high, and a low season when things just slow down, and they barely make enough to cover all their expenses. Those that have been in the industry for a long time understand this phenomenon and save extra money from the high season to cover any additional expenses in the low season. It is also at this time that some companies decide to let go of some of their workers or stop hiring altogether.
Interestingly, not all firms do that. In fact, some even hire more staff during this period. But, why is that? These firms figure that since the high season comes after the low one, it may be appropriate to hire more people and prepare for the high season and expected rise in customer numbers. Therefore, you can also use your working capital loan to hire more employees and enroll them onto the onboarding program early. That way, when the high season begins, the new employees know everything that is required of them.
Business lose the best employees because they can no longer afford them. The interesting thing is that the employees that firms want are not actively looking for jobs. They would rather do something else than watch their talents go to waste at a firm that doesn’t appreciate them.
For that reason, you ought to use your working capital loan to give new hires good compensation packages. Pay them well, and they can work for you without any hesitations. The productivity can increase, and your business can earn more that you thought was possible.
A working capital loan can only help you hire more great staff if you use it well. Use the strategies mentioned above, and you might have better luck with the recruiting process.