[Reading time: 2 minutes]

In a recent article, I discussed the pains of a growing business. Many organisations attempt to ease the pain by recruiting more staff. In my earlier article, I mentioned why this can cause short-term problems:

[New staff] don’t have the organisational knowledge of existing staff, leading to further missteps and mistakes.

Experienced staff must then spend their time training these new employees, reducing their availability to perform their ‘real’ jobs.

But recruiting additional staff also has a longer-term pain.

Staff are not just for Christmas

When you recruit a new member of staff, there are many costs to consider, apart from payroll.

Incremental costs

Some costs are incremental and easy to predict, regardless of whether you have 51 staff or 91 staff.

For example: Desk and chair, computer and accessories, software licences, pen and paper, tea and milk.

Cliff costs

Of more concern are the ‘cliff costs’: Costs that you incur when you hit a certain size (a ‘cliff’).

For example, if your office can accommodate 50 staff, the cost of recruiting staff member #51 could be a significant uplift in your rent bill. (And let’s not discuss the eye-watering sums needed for a new office fit-out).

If you can avoid the cliffs, you will save a significant sum of money.

And you will save it every year.

Hidden costs

Alongside these costs, you should also consider the hidden costs of taking on new staff.

For example:

  • New staff need to be found and interviewed
  • New staff need to be trained
  • New staff need to be managed
  • The errors of new staff need to be corrected

Existing staff will spend some of their time doing all of this.

This is time your existing staff won’t be spending on their ‘real’ job.

Intangible costs

Each new staff member brings their own experiences, attitudes, norms and expectations with them to the office.

This may add to the energy of the organisation. Or it could be a source of future conflict.

For every new staff member, the risk of a future court case increases ever-so-slightly

(Sorry for being a pessimist).

From a cybersecurity perspective, each new staff member presents a hacker or fraudster with a new doorway into the organisation.

When it comes to security, your weakest link is your staff.

A new member of staff adds another weak link to this weak chain.

Total Cost of an Employee

Recruiting an additional staff member is an expensive business.

Think about the total cost of a new employee before you recruit.

By understanding this cost, it may motivate you to consider alternative ways to sustain and scale your organisation.