How hiring a workforce can impact on your business

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If you have reached the stage where you can employ staff for your company, you will have to spend some time considering various factors that could have a huge impact on your company. Although it may seem a straightforward process, be sure to consider the overall cost and impact on the business.

The cost of a workforce

The payroll of a company is a significant part of the overheads and can soon mount up. It’s therefore important to get the level of pay just right, so that workers are paid fairly and you are compliant with employment laws. Although you need employees to do the work, consider that they are also entitled to time off work, paid holidays and other statutory absences, which will have an impact on productivity, profit and cash flow.

Recruiting a workforce will involve an initial investment to pay for advertisement of the positions available, along with time to deal with the application process and interview prospective employees. If you are engaged with the recruitment process, you won’t be able to spend time generating sales, which will affect revenues. You may want to consider outsourcing the recruitment process to a professional company or a management accounting service.

Payment for your staff

Obviously, the money you pay your employees will reduce the overall profitability of the business, but skilled, reliable employees are the foundation of a company, so investment is necessary.

Before you set the pay level, take into account the cost of national insurance contributions, pension schemes, any meal allowances or subsidies, and any other expenses that could make a significant dent in the payroll. There are regulations that govern pay for employees, so you must be careful to remain compliant. You may want to consider your reputation, as if you become known for paying low rates, you may have difficulty attracting skilled workers.

The recruitment process

The recruitment process is one of the most challenging, as hiring the most suitable candidate is crucial. There are many laws to abide by when you have a workforce, which means that you want to hire someone who has the capability of fulfilling the job role, while becoming a valuable team member. Narrow down the applications to the ones that have the appropriate qualifications. Interview those remaining candidates, perhaps inviting a member of the management team to join you, so you have a balanced view.

Hiring a workforce is a complex situation that requires an investment of resources. If you would like to discuss the recruitment process and how a workforce could impact on your company, call us for an informal chat.