According to TriNet’s Human Capital Index (HCI), small businesses had a five-point increase in hiring during April, up 98 from 93 in March. Though hiring is gradually increasing, many small businesses are finding it not only possible, but also advantageous, to hire new employees during the recession. Read on to learn about the benefits of hiring new employees in 2010.
1.Hire Now Tax Cut
On March 18, President Obama signed an $18 billion jobs bill passed by Congress, which included The Hiring Incentives to Restore Employment (HIRE) Act. The HIRE Act (a.k.a. the Hire Now Tax Cut) gives tax credits to small businesses who hire new employees in 2010. According to the bill, small businesses can save as much as $750 per hourly employee and $1,500 per salaried employee. The credits include a 6.2 percent Social Security tax exemption for qualified employees hired between February 3 and December 31, as well as a credit of up to $1,000 for each employee retained for 52 weeks. To qualify, employees must have worked less than 41 hours over the 60 days prior to the first day of employment. There are no age restrictions, so high school and college interns are eligible.
2.Competition with Bigger Businesses for Qualified Employees
Thanks to the recession, the job market is now filled with qualified (and overqualified) candidates, whether they’re recent college grads or former employees of big corporations. Now is a great time to get top talent for below market average salary. Potential employees are more willing to accept a downgrade in pay if they’re getting a lot of perks instead. To help attract potential candidates, explain the perks of working for a small business, both in your job postings and in your interviews. As a small business owner, you can offer more flexible work schedules, more vacation time, less bureaucracy, more responsibilities and potential for job growth, than a larger company can offer. It’s your chance to get the employees you’ve always wanted before the bigger fish swallow them up. When the economy picks up and big businesses start hiring again, you’ll have to compete for top hires.
3.Building a Network
Even if you aren’t ready to hire a bunch of new full-time employees, you can and should hire interns and contract workers. Not only are they cheaper than full-time employees, they also allow you to test the fit of various employees with your business and help you decide what skills and characteristics you should be looking for in future employees. Also, if you come across a brilliant intern or contract worker, you may consider hiring him or her full-time or giving them freelance work from time to time. A little known benefit of hiring interns and contract workers is that they can lead you to other qualified employees by word of mouth. Even if they decide to work for someone else in the future, they might pass along the information of other qualified people or adept firms that know. This helps you build your network and gives you a lot of resources to utilize.
4.Job Growth for Current Employees
As I mentioned last week (6 Questions to Ask Yourself Before Outsourcing), hiring new employees allows the work to trickle down, so that your current employees will be free to focus on larger tasks and bigger priorities, which in turn helps you grow your business. While you may be tempted to stretch your current employees’ to-do lists and schedules to the max, as well as let them have a hand in every aspect of your business, they’ll be more productive if you let them specialize and spend time on what they’re good at doing. Hire new employees to support your current employees in finishing projects and completing tasks. If you let your current employees manage new hires, then you’ll spend less time managing and more time looking into new opportunities for growth. You know the old saying, “Divide and conquer.” You might be surprised at just how well it works.
A wonderful effect of hiring new people is that they bring their own personal expertise and point of view to the table. Having a fresh set of eyes look at your methods, practices, policies and processes can help you strengthen the way you run your business. Often, you won’t be able to see everything that a new person can see, especially if you have no experience or background in the thing you’re looking at. Let’s take accounting as an example. Most small business owners handle bookkeeping and accounting themselves, through desktop software like QuickBooks or some other online bookkeeping and invoicing service. However, a lot of small business owners don’t have a background in accounting. When they run into problems it can take them days or weeks to solve them, whereas it would’ve taken a CPA or CMA a couple of hours to fix the issues. You might think that hiring new people is an expensive solution, but consider the number of wasted hours spent retro-actively solving problems. Especially during the recession, you don’t have time or money to waste worrying about technical issues. Hiring people who can help you prevent the problem before it starts is an investment that pays off.
Now that you’ve hired or contracted the right people, make sure you’re effectively communicating with your new employees. Check out our reviews of virtual PBX services and online fax services to help you keep in touch with the people working for you.