At what point do you add staff? Run heavy with more employees or wait till you really need staff?
The topic of timing when hiring employees was recently discussed on Clubhouse with a group of auto dealers and vendors. At what point do you add staff? Run heavy with more employees or wait till you really need staff?
A few months go by and you notice sales dropping or flattening out. Customer testimonials are no longer raving your staff seems stressed, and maybe even a few of your team members quit.
You take this in stride, work to make sure your team is performing at a high level. Yet more clients cancel services or sales opportunities drop no matter how much you spend on marketing.
Not sure what is happening, the stress begins to build.
What is Happening to my Perfect World?
This is not uncommon. In fact, this is probably the story for many great companies. In the beginning of growth, the leaders and early staff take a great deal of the workload onto their shoulders. Working around the clock was accepted and expected and customers were happy. Then there came a point of hiring new employees, and the P&L takes a slight hit.
Sales continue but you are afraid to spend on more staff.
"We can handle it, we just have to work a little harder."
So, your team is getting maxed out and in turn, service is getting affected, even slightly. You don’t really see it, but the attention is starting to flip from proactive to reactive. Everyone senses the stress.
Business leaders cannot forget what built the company in the first place. Unless you have a product so unique, your service is a commodity. Customers are choosing to come or return because of the customer experience they receive.
You cannot let the P&L run the customer experience. I am not saying staff heavily before sales can meet their available workload. I am sayings you should know a few things to help you scale before hiring:
How to Scale Properly
Now you are ready to do the math to help grow effectively!
Currently, you have 100 customers. This example is based on the fact the revenue you are charging for your services will allow you to hire as needed.
You have determined each customer-facing employee can handle 30 customers. You need 3.3 employees to effectively handle your current client load. Right now, you have three solid employees and you feel they can handle current clients. You have also determined it takes a new employee one month of training to handle a full workload.
If you are adding on average 20 sales per month at the end of this next month you will have 120 customers and you need 4 full employees. The danger is waiting until you have the sales to hire a new employee. Leaders tend to forget the learning curve of new employees. If you wait till you have a full workload for this new employee, then your existing team will start choosing who to reach out to or contact because their time is maxed out.
They will start switching to reactive customer service, and this is where customers feel a change in-service experience. In this situation, you need to hire a new employee when you are at 100 customers. Over the course of the month, the new employee can start taking new clients and some existing clients, so by the end of the month, they have their full workload. The existing team can help during this transition but it is a short-term solution.
The next problem is now you are maxed out at 4. In 2 months, you will need another full-time employee so I would start looking again.
A New Wrinkle?
I know you thought you were done. “Thanks Glenn for this! I am good to go.”
As you grow your team, another layer of management may be needed. As you get to 5 customers-facing employees, who will be responsible for coaching them and training them every day? It sometimes falls to the leader who feels they can do it all, but as their plate gets full, training is the first thing to go. Then the employee performance slips, leading to slightly reactive customer service, even if they are not overloaded with customers.
Scaling a business is never easy. Leaders are not all superhuman, eventually you must offload things from your plate to take on the duties you are best suited for. As you grow, new layers are needed. Follow this simple math formula, and I know it will smooth out some bumps and help retain customers.
If I can help in any way or you would like to schedule a free strategy call, please reach out to me.
Don’t forget to join me at the upcoming Digital Marketing Strategies Conference this July where we will be discussing this topic and many other breakthrough ideas for the automotive industry. Tickets on sale right now for both in-person and virtual attendance (limited availability!)
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