A Simple Strategy That Will Help You Hire More People

business case to hire a more expensive employee

Overcoming the Frustration of Being Under Staffed

 

How many times have you seen a colleague ask for more resources?  After all, their team was very busy and they could really use some more people.  You’ve probably witnessed that discussion more times than you can count.  Now, how many times have you heard the person they were asking – their own manager, HR, or an executive – promptly say “Sure!”?  Probably never.  All too often, I see managers ask for more people and more resources, but then fail to put any sort of solid rationale or justification together.

FREE DOWNLOAD: Sample Presentation to Justify Adding Headcount on the Tools and Templates Page

Increasing Staff is A Liability

In the modern business era, there is constant pressure to tightly control staffing levels.  The reason for this is that increasing the size of your staff represents a significant cost to the business.  For many businesses that I have seen, the cost of an employee can represent as much as 30% – 50% above their annual wages, once you factor in things like benefits, insurance and bonuses.  These values do not even include the upfront recruiting costs.  Nor do these numbers include the hidden costs associated with training the new employee, since there will be a temporary drop in efficiency.  Further, firms that use head hunters or professional recruiters will often pay an additional onetime fee of nearly 30% of the employee’s starting salary.   So it’s a fact:  hiring is costly, it is a distraction, and it is an unpopular request.  But, sometimes hiring is actually necessary.

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Justifying A New Hire

Let’s face it, being under staffed is REALLY frustrating.  I often see exhausted managers complaining “We’re working non-stop.  I keep asking, but my request never gets approved!”  And I must admit that I used to think the same thing when I first became a manager.  I would ask things like “How can they keep saying ‘no’ when I clearly need help?”  Or “Imagine how much more we could do with just one more employee.

Then, I was given some advice from a trusted colleague, who told me to take matters into my own hands.  He suggested that I spend time collecting data to justify my reasoning.  I had never thought about it in those terms, but it was completely true.  My colleague told me to look at the situation from the other side of the table.  “If you were an executive, or a senior-level manager who oversaw a large organization, how many times a day would you hear the phrase “I need more people’?”  It made perfect sense.  Hiring is tough, and usually an unwelcomed topic.  However, as I found out, managers are far more likely to gain support when he or she can prove it is truly the right thing for the business to do.

Gathering Data to Make a Case

So I began my quest for data.  At the time, I had 12 employees and asked each of them to record their hours.  Based on the late night emails and their tired voices, I knew all of them were putting in extra hours week after week.  I specifically told them to record actual hours spent on the job, not just the tasks they spent time on between the hours of 8 to 5 PM.   After six months of gathering data, I determined that my team of 12 had averaged around 52 hours per week over that six month period.  That was the equivalent of full-time work for 16 people.  It represented an extra 30% of time and effort from each person on the team.

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From a management stand point, the data was clearly concerning.  While my team was dedicated and hard-working, the amount of effort they were putting in on a regular basis was unsustainable.  Something would eventually, as is always the case when a team is over worked, falter and cause a larger issue.  Quality of work would slowly diminish, employees would burn out, and some may decide to find another job.

Using Evidence to Drive Decisions

I collected the data and evaluated the team’s workload.  I prepared my evidence.  When it came time for a face to face meeting with the Vice President of my organization, I started by sharing our vision for growth.  The plan outlined new product development ideas which we believed would help make the firm more competitive.  As part of my strategy, however, I included the need to increase staffing.  Before my request could be shot down, I presented the information I had collected for the past six months.  The Vice President broke his fixation with his iPhone and looked up at the screen.  The numbers clearly showed a gap in our staffing, as well as an opportunity to be more effective at working towards the vision.  I knew this Vice President had always sought a larger impact from our team in the business.  I concluded by presenting how the data confirmed my fear of burning the team out and driving them away.

RELATED: 3 Ways to Plan Resource Levels

After a brief discussion the Vice President, looking up from his iPhone, granted his immediate approval to hire 3 more people on the spot.  He acknowledged that the evidence was clear and the vision and future goals we were working towards.  I was stunned.  But then again, the data did not lie.  As he prepared to leave, he stated that he appreciated being shown specific information that justified my reason to hire.  “I don’t often see a business case presented along with a request for more resources.”

Make a Business Case

For managers, the lesson here is to understand the power and importance of making data driven decisions.  Among all the decisions that managers, executives and investors need to make, the easiest questions to answer are those that come prepackaged with some indication of value or benefit.  Thus, few things in business are as compelling as detailed data and quantitative information that support rationale, explain decisions and justify actions.

RELATED: 9 Mistakes to Avoid When Seeking More Staff

Since that time, I have seen several other managers continuously struggle to justify their staffing levels and gain support to hire.  I make it a point to share the same advice that I once received.  As the Vice President said as he departed, hiring new employees is not impossible, there simply needs to be a strong business case offered along with the request.  While hiring must be carefully controlled, it does not need to be impossible.  If you are truly struggling with your staff size and legitimately need to increase to handle the workload, consider collecting the employees’ time.   What will the increased staffing level do for you?  How will it help?  If you don’t get those people, what might be some of the impacts?  Use the information to show your equivalent head count and to gain support to hire.  Decisions are far easier to make when they are driven by data.

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16 comments

  • Sarah

    Great article. I was wondering if you could lend guidance on other data to collect besides work hours? Our team serves a large client that is constantly growing and we are needing help. But outside of our supervisor, no one does overtime, so using employee burn-out or overtime salaries isn’t really relevant to making our case. Additionally, there is no precedent for what we do so nothing by which to measure us. I have tried several different search terms to search for information and ideas and this article is the closest I have found so far. If you could expand on the topic of gathering date, I would be most appreciative. Thanks.

    • MRH Team

      Thanks for the comment Sarah!

      Great question and one that others can probably relate to. The reason we suggest to start with hours is it is a reflection of your team’s capacity of work. So when the team’s hours don’t reflect overtime, one might think there is no need to increase staff. But your situation is different, of course. Here are two other ways to look at the same problem. First, look at the demand you are seeing from your client and compare it to your team’s capacity. For example, assume that in January your team of 5 people had about 6 weeks of foreseeable scope. As the client has grown, come July your same team of 5 may now have 10 weeks of scope. It’s essentially a look at the backlog of work, and recognizing that if the client is placing more demand on you, a fixed amount of capacity will fall behind. Secondly, you might want to look at it from a turnaround time standpoint. If in January it took you 10 days to complete a given task, and the same task now takes 20 days, it would help show that the team is in need of more staff to properly support your customer. The common denominator is again hours, but looking at it in a different manner might help you justify the need for help. Hope this helps!

    • S Chase

      Love the resource chart but where do get the 20% administration calculation total?

      Many thanks
      Steve.

      • Hi There!
        Thanks for the comment. A few of the companies I have worked with use this assumption for administration time. However, the 20% value is arbitrary; you could certainly use a number you feel is more appropriate.

        Regards,
        Tim G.
        Editor
        The Manager’s Resource Handbook

  • feben

    I need ur management book it helps me for my day today activities.I would like to thank you in advance.

    • feben

      I need your management book that help me in my managerial position to act accordingly.

      • MRH Team

        Thanks for the comment Feben! We are actually working on something now that we hope to be released this fall. We will let you guys know when it becomes available.

  • Patricia

    Hi,

    Very interesting article! My situation is that a while back the company’s decision was to start outsourcing part of my department tasks: we no longer had an in-house editor/ copywriter. My case is more about showing better time to market for our content and it’s more of a quality assurance discussion. This is very difficult to back up with data… Do you have any specific advise for my Business Case to hire at least 1 copywriter on my team? Thanks.

    • Hi Patricia,
      Thanks for the feedback! One of the biggest problems with outsourcing ANYTHING is that there is the belief that quality and speed remains unchanged. In many cases, like yours, it’s untrue. That said, I am very familiar with the challenges you are facing.

      It sounds like you are struggling with the capacity to produce work internally or to review work that was outsourced, at least of the quality and standard that you require. Something you might want to consider is putting together a ‘current state’ versus ‘future state’ comparison, the difference being the added copywriter. You will need to focus on the benefits the resource will add. How much faster will you be able to get to market? Why is that important? How can you explain and justify the improvement in quality? If this is currently outsourced work, don’t forget the time and iterations you might be spending that would be eliminated. In my business, for instance, we have a measurement for ‘% on-time’ and ‘first-pass’ to evaluate the quality and timeliness of the work we outsource.

      Hope this helps!

  • Robert J. Potsic

    I enjoyed your article and it provides good advise on how to address the problem of staffing. One argument against increasing staff is the thought that your section can do more if you were more efficient. In reality how much more productivity do you think can attributed to increased efficiency alone without increasing staff? I guess I’m looking for some type of percent. Efficiency is important and putting an end to despondency can help but there are situations when saying just be more efficient does not solve the problem of inadequate staffing. How would you suggest addressing that argument. I know a six month study of all the procedures done in an area will help but during that time the work continues to pile up and can get even worse when just increasing the staff by maybe one person could assist in solving the problem. Thank You

    • Hi Robert,

      Great question and certainly a fair point. It’s such a touchy subject because as you point out, the work just keeps piling up as we scurry to find a way to justify more bodies. I’ve read statistics in the past that suggest that in an 8 hour work day, employees are only ‘productive’ for about 5.5 hours, or about 70% of the time. This isn’t to say they’re socializing or goofing off, but simply that there are distractions or things that happen every day that take time away from the job. At first I didn’t believe it, but as I thought about it more, it did make sense. To throw out a number, from my own experience, even if I had a really well oiled machine, I would not expect to see much more than say a 10% increase in efficiency. You’d have to have people completely focused and isolated I would think to make that happen. Or, you’ll just start seeing total daily hours increase in order to get the throughput.

      Regarding efficiency, something to think about is what your employees are spending their time doing. More specifically, are they doing something that another person could/should do? I’m dealing with a situation right now where I have a team of about 30 technical professionals who are burdened by a lot of admin work (filling out forms, tracking data, uploading files to servers for our customers, etc.) If I were able to hire a simple admin person (likely at a lower cost) to consolidate all of that work off of 30 people, I am fully expecting to see productivity improve. I don’t necessary need 4 technical professionals, I just need to take some of the distractions off of them. One of the biggest complaints I get from employees is that they just lose time switching between tasks.

      Great comment. I hope this helps!

  • Chris Cotter

    Great advice. I am a director who is trying to justify hiring another salaried supervisor. This seems to be more challenging then asking for a no salaried employee. Do you have any suggestions.

  • dipo s oshibote

    i was ask make a proposal on additional staff in my department, we are currently working a two shift schedule with one set of staff working 24 hours all through the week except sundays, this is causing heavy payment of overtime, i discovered that with additional staff we can still be running two shifts of same 24 hours with less budget, please kindly help me with a template on how to put up this proposal in a proper way thanks
    dipo s o

    • Hi Dipo!
      Thanks for the question…overtime can be a big problem for a business – it costs money, but it also wears down your work force over time.

      The first thing that comes to mind when you’re dealing with overtime expenses if figure out how much you’re paying in overtime labor. Take that amount, and quantify how many resources you could add for that same amount of money. Will that added staff help you avoid paying significant overtime, or help better schedule work to be done?

      For how to present your information, I would recommend you go to this page: http://www.managersresourcehandbook.com/tools-and-templates/

      The following free downloads should help you put your story together:
      1. Justifying an Increase in Headcount – A Sample Presentation
      2. Methods for Workload Analysis and Evaluation of Headcount
      3. Sample Business Cases to Justify Hiring Additional Staff

      I hope these help! Email us if you have more specific questions and we’d be happy to help.

      Tim G.
      Editor
      The Manager’s Resource Handbook

  • Mary

    Hello!
    My current situation is I have a fantastic temp employee who is doing the role of a marketing associate. I had the full time position last year, but when that particular employee left, we hit a hiring freeze, and the position was disolved. They did though, tell me I could hire a temp. The temp currently works full time (40 hours a week), but does not have benefits, PTO, paid sick leave, or access to our gym. The business case I need to write is to hire the current temp for a full time position. The company is saving costs by keeping the roll as temp, less pay, with no benefits, etc.
    I am afraid they are going to leave for another full time position in the company. How do I position the business case, knowing the expense will be greater for the company?
    Thank you,

    • Hi Mary!

      Thanks for the comment… Interesting, yet very common situation. Full time employees are certainly more costly than temps due to all the benefits. Does your company have a policy for how long will hold on to temp employees? Many companies limit this to one year, as it then leads to a discussion of ‘are they really temporary?’

      A few suggestions for you:
      1. In terms of the need for re-instating the role (full time), focus on why the position is needed in the first place. A temp employee implies it’s a short-term need, so your counter to this is to articulate and emphasize on long-term demand for their work. What does this position accomplish over the next say, 3-4 years? How does it change or evolve?
      2. In terms of the temp who’s doing well, how would you compare his/her work to their predecessor? Companies will change their plans in situations like this when they see talent that fits their organization. Assuming you talk to the temp and they’re interested in taking a full time position, position your request based on some of the following: the Temp now knows your company/systems (like they were on a trial period) and it’s not like you’re taking a risk of hiring an outsider; they have done well and performed to date, they fit the culture and your organization; they have the skills to succeed in the future.
      3. Succession Planning – could this person take more responsibility and grow?
      4. Avoid the ‘they deserve benefits’ discussion. Companies won’t typically go for that, that’s why they hired a temp.

      In short, focus on the long term need for the role. In terms of the current temp, focus on their skills/value they are adding and how it will benefit the company long term. I’d avoid the ‘they deserve benefits’ discussion, that won’t get the conversation very far.

      I hope this helps! Let us know how it goes.

      Tim G.
      Editor
      The Manager’s Resource Handbook

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