TO EMPLOY OR NOT TO EMPLOY…
Why is that first employee so important to an entrepreneur?
Employees – Wow, if it weren’t for all those letters, it would most certainly be a four-letter word, for all the potential trouble they could cause an Entrepreneur. Don’t get me wrong, employees are an essential part of any growing business and the agonies they cause an entrepreneur are so very real, but all too often not of their making. What are these agonies? Well let’s get into it, so we can understand 🙂
To Employ or nor to employ, but how can I afford it?
This is the first battle an entrepreneur will have to face. Very often an entrepreneur realises that they need to hire somebody to assist them with the daily running of their business, however they very often resist as they are concerned with the very real problem of: “How am I going to pay them?”
Well, the truth that most entrepreneurs forget is, once the employee is trained, they will have more time to earn additional money, therefore paying a new staff member is not really a problem, because if it is done correctly it actually takes care of itself.
Why is that first employee so important to an entrepreneur?
The majority of entrepreneurs might not like to admit it, but the reason for their initial hesitation in employing staff is twofold.
Firstly, this staff member must be trusted with ALL your knowledge as it is just not possible to get them to understand and help you run your business any other way and Secondly, you know you can never offer them what your bigger competitors can.
It is these two things that scare an entrepreneur the most, the knowledge that they must share all their secrets with somebody who they know will one day leave to work for their competitor or set up shop as the competitor!
Who do I employ?
Well, this is the easy part, in fact it is so obvious that when we share it with clients, they all burst out laughing. Our suggestion is – always hire somebody to do the work that you hate doing!
Our reasoning is very simple, it is the quickest way to find out if your employee needs additional assistance or is slacking off on the job. The reason it works is, you’ll soon find yourself doing the work you hate, therefore will quickly intervene to solve the issue.
The difficult part is taking a hard line and holding your staff members accountable. It is here where most entrepreneurs fail in the management game, often they have not clearly defined the rules and therefore have difficulty in disciplining an errant staff member.
How do I employ – Agency or Newspaper?
The obvious choice here is an employment agency, they take care of screening the candidates and save you loads of time. Many of them even have a replacement guarantee if the initial candidate they placed did not work out.
Their big downfall however is the cost involved and most small businesses just cannot afford the fees that are charged. So, with cost as the main driver, we often suggest using the internet to find staff, it is becoming easier and the cost is already built into your monthly charges.
A nifty trick is to have a careers section on your website, that way you will always receive loads of CV’s each month.
How formal should the employment process be?
A simple rule of thumb – be draconian!
It is important to ensure you have all your bases covered right from the start and by this we mean a proper employment contract, a job description for all staff, a code of conduct and a proper leave policy.
Having these basics in place will save you loads on CCMA costs when it comes time to fire an errant staff member.
Staff realities
Staff do not need to understand your cash flow issues, if you do not have the money to pay them, they will leave and find other jobs, therefore it is important to ensure that they are not the cause of the cash flow issues.
Staff need to be held accountable for the trust you place in them and the money you pay them each month.
Don’t be afraid to challenge your staff on all issues relating to their jobs. This doesn’t need to be a negative experience, just make it a regular experience.
Good luck, happy staffing 😉
Next month we will look at the monster that stalks every business – Cash flow
Our Services:
At SME.TAX we do more than just assist clients with their provisional taxes.
We are your “one stop SME shop”, assisting with everything from Accounting, Business Management, BEE, Consulting, Company Registration to Payroll and Mentoring.
For more information, please visit our website www.sme.tax or give us a call on 072 207 4789
