When you need to hire more pairs of hands to handle your expanding workload and the needs of your growing company, which is the more cost effective choice: Paying overtime to your current teams so they can stay late and get the job done? Or hiring new teams of employees? The answer will depend on your situation, but here are a few questions that can help you make a practical decision.
First: is this demand spike temporary, permanent, or cyclical?
Back up and observe your workplace as an entire system. And then take a close look at the reasons underlying your work surge. If you’re experiencing a sudden influx of orders, is it because your new product line is huge (and lasting) success? Is it because the holiday season is right around the corner? Is it because your product or service is being influenced by a popular movie, a social trend, or a change in the landscape of your city? In other words, will this demand fall back to normal levels in a few weeks, will it peak every year at this time, or will it continue to steadily increase?
Generate a simple two-part comparison for each open position.
The cost and the specific value of each position will differ, so don’t try to lump every position together and apply the same broad-brush algorithm to this question. Take each position and calculate the actual per-year cost of a new hire (including both annual salary and the cost of selection and training). Compare this with the per-year cost of overtime for each team member who will work more than 40 hours during this time period while taking on the same set of responsibilities.
Factor in the decrease (or increase) in morale and productivity that come from excessive overtime.
In most industries, a work week that extends beyond 40 hours also brings a drop in work quality, per-hour productivity, and employee engagement. But since some employees appreciate the time-and-a-half pay increase that comes with each additional hour, they may jump at the opportunity to stay late. Of course this increase won’t apply to those who are overtime exempt.
Consider partnering with a staffing agency.
Keep in mind that you also have a third option: hiring employees on a contingency basis through an experienced staffing agency. This move can help you sidestep the hassle, commitment, and paperwork involved in taking on a new employee, but it also provides you with an extra pair of hands to take you through a temporary spike in demand. For more information on how contingency staff can meet your needs, contact the Sugar Land employment team at Expert Staffing.