The 3 steps to better scale-up staffing strategy

10 November 2017

Your staff are one of the most important barometers of your startup’s success. We could argue they’re as important as your cashflow – after all, this is the team that will help your efforts to bring in more money and expand. In the beginning, your team might have been simply you, with a family member helping out, or maybe a small group of people that you knew very well.  As your business grows, you might start to find that either you need access to specialist skills, or that there are just not enough hours in the day to keep on top of everything.  You need more people, but you also need the right people. And if you’re growing fast, the pressure of having to meet that need quickly can be a real headache for many. Using your finance function as an example, here are the three questions that can guide you to the right solution for this stage of your growth.

1. Temporary vs permanent

Your first decision essentially comes down to whether you are needing a short-term boost in either resources or skill or are at a stage where you want to invest in something longer term.  There’s a cost/benefit assessment to make here. If you’re considering taking on permanent employees, make sure to consider full costs of employment (including National Insurance, pension costs, and costs associated with recruiting and training staff) in your financial decision making. And also consider the time you need to recruit and onboard your new hire to make sure you’ve giving both you and them enough time to deliver what’s needed to keep your business growth on track. Cashflow forecasting is also critical for supporting this decision, so make sure you have the right data available to assess the impact of salary and associated costs – such as training and professional development.  

While contract workers might be more expensive, they do offer you more flexibility. If you just need some extra help to get you through a busy period (in the case of our finance example, year end or budget setting), temporary staff might be the best solution. The other use of temporary staff can be getting access to specialist skills – for example an experienced Finance Director to support your strategy and business plan – for a limited period. You might find that a day per month with a very experienced finance professional represents better return on investment than taking in someone full time.

2. Direct hire vs service provider

Let’s say you’ve decided to look for temporary staff. The next choice you have is whether to hire them directly, or through a service provider. While it may initially seem cheaper to source staff yourself, the advantage of getting help is that service providers will have a roster of trained and talented people immediately available. You’ll also save on the time and costs associated with advertising and recruiting.  Using providers to source staff also offers you the opportunity to take advantage of other people’s skills in recruitment or in attracting the best talent.  

On the other hand, direct employment might give you better control over contract terms and quality standards, as employees will be responsible directly to you rather than a third party.  If you expect to need contract staff to fulfil specific jobs on a repeated basis, contracting directly with workers might also help you build a long-term relationship with your contractors.

3. Local vs Remote

In the global knowledge economy, access to modern communications technology offers the possibility of accessing staff from other geographical locations.  This might mean that a business can access skill sets not available in their home location, or take advantage of time zone differences to offer greater coverage. From a cost perspective there are potential saving based on local salary expectations (for example not having to pay London rates) as well as through avoiding the need for office space by employing staff that work from home.

If these advantages sound beneficial to you, make sure you’ve considered some of the challenges associated with remote workers. You’ll need to have the right systems and process to ensure consistent quality standards if staff work remotely. Cross-geographical staff can also raise language, cultural, time zone, or even legal barriers so seek advice if needed. Remote or virtual teams have fewer opportunities to build a team structure. Modern technology can help address this, so consider how you will enable remote workers to develop these relationships through teleconferencing or video calls. Finally, establishing a clear framework for expected behaviours is important to maximise the benefits of a virtual team.

The right solution for staffing is unique to the needs of your business, and will change over time.  Spending some time considering exactly what needs you’re trying to meet will help guide your decisions – as in every business decision you will make during your startup journey, there can be trade-offs to make that might not be obvious at the time.

This blog is part of a series from My Financepartner. My Financepartneris a new accounting service for small and medium-sized businesses that puts you in control. You choose the services that you need, module by module, and we'll deliver them. Contact us at [email protected]



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