Taking on more

5 key signs it’s time to take on more staff

How do you know when it’s the right time to take on a new employee?

Hiring an extra member of staff is a big financial and resourcing commitment; but bringing in the right person at the right time can help you grow, secure and futureproof your business.

So, it’s a decision every workshop owner wants to get right.

Could you be using your existing workforce more effectively?

We asked some of the mechanical industry’s top experts for their best advice on how to judge when it’s time to bring in more labour. Here are nine questions they suggested every business owner needs to ask themselves when weighing their options.

Start by looking closely at how well you’re using your existing resources, says Jeff Smit, technical editor at The Automotive Technician (TatBiz).

“Say you’re employing two technicians: how much of their day is spent doing mundane things that maybe a non-skilled person or a workshop assistant could do?” he said. “You think you need more ‘hands on deck’, but what sort of hands do you need? Do you need to put someone in the office to free up the manager, who’s a fully qualified tech? Why is he organizing job cards for tomorrow or why is he answering the phone? “You don’t want to be paying a fully-fledged technician on high hourly rates to do those kinds of tasks.”

Are you achieving decent productivity from your existing staff?

How productive is your current team?

TatBiz general manager Geoff Mutton said you’ve got to be achieving decent productivity out of your existing staff before you consider hiring more.

“If you’ve got poor productivity from two staff and you bring in a third one, nothing’s going to change,” he said. “It’s just going to get harder for you to manage. You’re not going to make more money — you’re just going to go backwards.”

Rachael Evans, who as the Workshop Whisperer spends her working life helping workshop owners achieve their business goals, says a workshop that is edging towards 80% productivity is a key indicator that it could be time to take on a new technician.

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That’s a decision she recommends making with your accountant.

“It’s got to be costed and it’s got to be budgeted,” she said. “You need to know what type of return on investment you’re looking for from this person.”

You need to be able to: • Project what additional revenue you’re going to generate • Be sure the new employee is going to pay for themselves • Track how well they’re performing against your goals.

If you are booked more than a week in advance, Jeff suggests an alternative to hiring an extra pair of hands could be to charge a higher labour rate.

“If you put a businessman’s hat on, if you’re booked out two weeks in advance, you’re not charging enough,” he said.

“You need to up the ante on what you’re charging. Yes, you’ll lose a few customers, but you’ve got too many on your books now. So, lift your labour rate by 10% and lose maybe 10% of your customers.”

The advantages of this option, according to Jeff, are: • You’ll make more money • You’ll have to work less • You can pay your staff more.

Are you and/or your team rushing jobs?

Are your team constantly rushing jobs to get them finished on time? If so, it could be time to take on more staff. Jeff Smit said it was important that staff had adequate time to do the jobs they’d been allocated.

“The quality of the job done can actually improve, because the guys aren’t having to rush to get on to the next vehicle.”

55% of Members told State of the Nation that doing high-quality work was a key indicator of success.

PRO TIP: Hire new staff two months before you will need them, Rachael says.

“You don't want to be so flat out and so time-poor that you can’t actually invest the right amount of time in training them,” she said. “New staff have got to come before you actually need them.”

Do your staff risk burning out if nothing changes?

Do you risk losing the staff you already have, if nothing changes?

If your team are feeling overworked, rushed or burned out, it can quickly have detrimental effect on staff morale and retention, Jeff said.

“If staff are hard to find, then you’ve got to have a very strong retention policy that says, ‘I’ve got good staff; I’m going to do everything in my power to make sure I hang onto them’ — not the opposite,” he said.

32% of Capricorn Members told State of the Nation they considered loyal staff a key success indicator.

Are you creating an unnecessary bottleneck in the business?

Before you hire someone new, Geoff recommends taking a moment to reflect on your own role in the business.

“Sometimes owners can become a bottleneck in the business,” he said. “They might be taking the bookings out the front, then working out the back — they’ve got a finger in everything that’s going on.

“They need to delegate and relinquish some control to free up the bottleneck they’re causing — and that’s probably the hardest thing for them to do.”

PRO TIP: Look closely at the structure of your business and who is responsible for what tasks and areas. Delegate where you can, Jeff said.

“If you don’t, then putting on an extra tech is just going to exacerbate the issue and nothing is going to change,” he said.

For even more tips on signs that it's time to take on more staff, head over to our news & insights section of the Capricorn website.

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