7 Signs That It Is Time To Hire for Your Machine Shop
Shop owners need to be able to determine when it is time to hire for their business. Here are some indicators to watch out for.
Operations staff help you serve your clients, grow the business, and engineer the systems that enable your operation to scale up without too much stress. When you started, you built up your operation from nothing. Once you’ve reached the point where you’re generating business fast enough to keep yourself and others busy, you’ve likely handed over some non-operational roles, to free up more of your time. In staying effective, or improving how you run your business, it is important to know the right time to hire operations staff. Below are some indicators that should prompt you:
One sign is when customer service isn’t getting enough of your attention. You know your success comes from a healthy mix of new and repeat clients. If the current client conversion to repeat clients isn’t matching up to your expectations, then it is time to assess how your team is handling customer service and retention. The cost of gaining new customers, compared with holding on to your existing customers is at least 5:1. Client churn rate tells you something needs to change.
That change may be as simple as rigorously assigning your time to customer interactions every day. Of course, that means you need to pass on other, less critical tasks to your team members. But that can present a development opportunity.
If there's nobody with the capacity to handle the tasks you need to pass on, check your current workforce. Either you need to recruit for the level appropriate for these tasks, or you need to recruit someone to handle the mid-level CRM tasks and implement operational systems that make your client interactions timely, reliable, and consistent.
Another sign that it is time to hire is when you can see signs of stress and absenteeism/sickness—in yourself or your existing team. This can be as simple as the “buzz” has gone, and there are indications of drudgery—or the effect can be more intense and disruptive. Check with the department heads and shop-floor supervisors. See the trends in shop-floor attendance if operators are frequently falling ill or failing to show up at work. Whatever the level, speak to your people and listen to their feedback.
This is an opportunity for you to engage with your team to analyze exactly where the stress points are. If it's a case of machinists spending too much time on QA, taking them away from their core tasks, and making them run behind to keep up, that tells you what's needed. If it's machinists having to spend time on maintenance, again that's informative.
Wherever the stress points are, knowing is better than guessing. And it's important to acknowledge that these are growing pains that strongly suggest you’re succeeding.
You’re outsourcing work, paying a profit to a competitor, to meet deadlines; another potential sign that it is time to hire. This can be exactly the right approach, but if it's in high volumes and very frequent, you may need to reassess. Run the numbers, and understand the cost/risk-benefit of outsourcing some or all of that work.
The outsourcing trap is one that it's easy to fall into. When client satisfaction is the biggest factor for you (as it is in most successful businesses), the easy erosion of margins associated with outsourcing can be the difference between holding a position and profitable growth. Timing is everything. Once the work is secure, understanding the relative benefits of outsourced hire is how you cement success.
Another sign to watch out for is when more than 15–20% of your time (or your higher-value team members’ time) is spent on tasks that could easily be handed over to someone else.
Every business is full of things that ought to be done to keep operations in good order. Only a proportion of these are immediate, bottom-line influencers, though. While cleaning the floors does tell your team you and your seniors aren't too proud to handle low-grade tasks, it also takes you away from making the business better. If hiring a cleaner frees up seniors and yourself on an hour-for-hour basis, it's an easy decision. Same for a tool setter and other job positions. Focus the appropriate people on the high-value tasks and you'll see wide benefits.
Your CRM system doesn’t really deserve to be called a system …but you just don’t have time to implement a more robust approach; this is another factor to consider in relation to hiring. This follows from point 1 (Poor Customer Service), as it's the clearest and most straightforward factor in client retention. Building a better CRM system pays you back with interest; if you need to either hire someone to do this or hire someone to free up your time to do it, this is simply a good investment in growth.
You’ve got high business goals that need you to spend time out of the workshop, to maintain your growth curve. These might be sales visits, networking with local businesses, web development, or learning new methods and equipment. But you’re struggling to make time to follow through on these plans, and you know your growth potential will be hit by this.
As the builder of the business, you were and remain the key to its success. But just like at the start, you need to be able to grow as the role grows. If you're not growing, the business will suffer. Hire to give yourself space to work on the two largest factors that create success; work on yourself; work ON the business more, which means working IN the business less.
You’re feeling your own growth, recognizing that your potential as a business builder is greater than your potential as a stressed, part-time machinist. So move on. The greatest success you can achieve is to make yourself redundant in normal business operations, so you can stay just beyond the leading edge of the operation, always looking windward.
The best time to consider hiring is just before you need the extra hands! But of course, that’s not practical. Plan workload and try to moderate the bulges, so you can handle them without hiring. Finding you don’t need to hire is a great outcome (if it’s true).
Knowing when to hire, who to hire, and how to hire are among the developing skills that will allow your business to succeed. Overloading the payroll is bad and it can hurt, it can kill the success you built. Under-hiring, however, can be a kind of strangulation that is just as damaging. Playing safe is ok, but that's likely not how you started the business, and it's not how you'll maximize growth.