The Coffee Cup Equation

When to hire? I made an interesting discovery the other day: the number of empty coffee cups sitting on my desk is  proportional to how badly we need to add another member to our team.

The question of when to hire is a tough one for small businesses. As a two man shop, the decision to hire a third staff member meant justifying a fifty percent increase in our monthly wage expenses. I don't think there are too many businesses out there which take an 50% increase in expenses lightly. There's also the cost of actually hiring someone, which for us – assuming we're talking about a developer – runs around $20,000. Yes, $20,000. Why so much?

  • For starters, if you want to post a job ad on any of the major sites you're looking at around $750 per site. Before you can do that though, you actually need to take the time to write the job description and requirements.
  • Then there's the time to review resumes.
  • Then there's the time to call short listed applicants.
  • Then there's the time to actually interview applicants.
  • Then there's the time to review your notes from the interviews and actually make a decision (you did take notes, right?)
  • Can't decide? You'd better make the time for another round of interviews.

Now here we're going to assume everything went well and that you've found a great addition to your team. If not, well, rinse and repeat.

So we've decided to hire the person? Well here's where things get expensive.

  • They need the equipment and software to do their job. That's $5,000, minimum.
  • They need to be trained, or at the very least to familiarize themselves with our way of doing things, and the projects we're working on. For a programmer it can easily take a couple months for them to get up to the productivity level of our existing team members. Wages add up very quickly.
  • They need office space, and a desk, and a chair, and a phone, and all the other little things that small business owner often take for granted.

Note only is it expensive, but as an entrepreneur there's also a very strong desire to put in a little extra time to pick up the slack. Unfortunately, the difference between a little extra time and a lot of extra time is blurrier than you'd think. It's all too easy for one or two hours extra to turn into ten or fifteen, at which point you're doing more harm than good.

So, how do you know the time is right?

For me, it came down to a simple observation: the number of empty coffee cups on my desk in my home office. Why home office? Because that's where I invariably end up putting in any extra time.

  • One or two? No problem, business as usual.
  • Three or four? Alarm bells are starting to ring, but it's still manageable.
  • Seven? Houston, we've got a problem.

Seeing that seventh empty cup on my desk was a wake up call – pardon the pun. It told me I'd gone from putting in a couple extra hours here and there, to not even having the time or energy to to clear off the remnants of the caffeine that had been fueling me for the past few nights. I decided then and there that the time was right to hire, and we're beginning the hunt for our fifth team member immediately.

The next time you're trying to figure out if you should hire someone take a look at your desk, the answer may be staring you straight in the face.