I hear that question a lot. Everyone seems to be looking for a magic formula that says, “ When can I afford to hire this new employee.” There is one, but we’ll get to that in a minute.
As a business grows, hiring a new employee, be it the first one or the fiftieth one, is a big decision. It is not one that should be taken lightly and should never be simply because you work too hard. Hiring a new employee costs money. Money in the form of time and future expenses. Some estimate the cost to bring on any new employee ranges from 1.5 to 3 times their annual wages. That’s a lot of money in any size operation. Ensuring the decision to hire a new employee is critically important.