What’s the Opportunity Cost of Not Hiring?
As a small or medium‐sized business, you might be wondering whether or not you should grow your team as your business develops. Quite often, the added expense of a new employee becomes a significant deterrent and inhibits businesses from moving forward with the hiring process. While the financial commitment is an obvious factor to consider, it also raises the question, what is the opportunity cost of NOT hiring a new employee?
The Costs of Not Hiring
When you delay the decision to hire a new employee, the cost of lost productivity or sales can actually be greater than the cost of the new employee’s salary. Put simply, there’s an opportunity cost – the cost of lost opportunity ‐ of not hiring, and this grows the longer you delay the process.
If you fully explore the reason why you think you should add another employee (provided it’s not born from inefficiencies), you’ll find there are opportunities for growth to take advantage of; more employees equals more energy contributing to your company’s overall success.
Knowing When to Hire
So you’ve acknowledged the need for additional staff, and you’re weighing the cost of increasing your payroll against the opportunity costs of not hiring, how can you be sure the time is right to actively hire for a new position?
When your company has both a need for additional help and the means with which to pay the employee, the opportunity costs likely outweigh the new team member's expense.
If you consider all the work new employees can do to propel your company forward, you’ll find the benefit of the additional help will be exponentially greater than their salaries.
Alternatives to a Full Time Hire
You’ve now reached a point where you’ve justified a new hire but are still second‐guessing how the added payroll expense can work within your limited operating budget. Be assured there are several recruitment options available that can ease your financial commitment if you don’t have the budget for a full‐time hire:
- There are plenty of female professionals looking for part‐time work in order to balance family commitments with career opportunities.
- There are also many students and seniors looking for part‐time work.
- There are people who volunteer to gain industry experience or a well‐respected reference.
- There are jobs that can be offered on a temporary or contract basis – within a set time frame and labour expense – to suit your budget.
Using part‐time help, volunteers, and temporary / contract workers are all great alternatives to hiring full‐time employees and can be instrumental in keeping your business running without a long‐term financial commitment.
If you’re in need of new employees but not sure where to start, we specialize in finding the right talent quickly and efficiently to help you take advantage of growth opportunities as they arise. And that’s the best way to mitigate the opportunity cost of not hiring.
Have questions? Call us today ‐ we’d love to help!
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