How to Justify your Hiring Needs

If you’re running even a small part of a large organization, you’ll eventually come up against the hiring problem. You know the scenario: you and your team are working hard. You’re doing good work. But you’re just barely keeping up, and you know that one or two new hires would really push you all into new territory.

Unfortunately, while your bosses understand your plight, they never quite seem to approve your request. Instead it’s, “sorry, we just can’t right now.”

There is however, a powerful way to turn this “sorry” into, “sounds good!”

What is it? Data.

Below we’ll discuss ways to go about justifying your hiring needs, and give you a reliable method for making those justifications stick.

Why Organizations Say No to Hiring

To properly justify a hire, we have to put ourselves in the position of the executives we’re trying to convince. As managers, it’s easy to get frustrated when higher-ups keep withholding the resources we need to run our team properly. For executives, however, the decision can be much more involved. They may be overseeing multiple departments, all of which are asking for more bodies.

There’s also the significant expense of hiring. In addition to salaries, hires commit a company to taking on the costs of health insurance, retirement, and bonuses. If your company uses a recruiter, it’ll end up paying extra fees, usually 20-35% of the employee’s salary. Hires require equipment (like computers), space, and training. Running a job search tends to siphon time away from more immediate work, which can be a problem if deadlines loom.

Most executives would love to give every manager everything they ask for. But when they can’t, the choice usually comes down to: what hire(s) will give the best Return on Investment?

This is why your job is to show your boss, unequivocally, how much the new hire will do for the company. Your job is to show your boss, with specificity, the returns the hire will generate!

Understand the Resources Needed to Most Effectively Run Your Team

Now that you have your goal (showing your boss, with numbers, what the hires you’re asking for will do for the company), you need to start gathering evidence! In our many years of experience, there’s no better method than the following:

Step 1. Track Time

First, and most important, you’ll want to spend a few months tracking employee time. You’ll want to know what every single employee on your team is working on, and how much they’re working on it. It’s important to do this for a few months, so you can capture the ebbs and flows of your team.

What does this do for you?

• It tells you, very clearly, what your team’s work capacity is. You can know — for certain — how much work people get done, and how that varies according to employee, project, task, and time frame.
• Since you know how much your employees cost, it lets you figure out how much profit each employee is producing, and how much profit the team as a whole makes for the company.
• It helps make your team more efficient. Often tracking time reveals that employees are spending too little time on tasks that engage their specific skillsets, and too much time on other menial stuff. You can then rejigger appropriately. (Sometimes just doing this can make a new hire unnecessary.)
• It helps focus your search for a new employee. Once you’ve allocated people’s time more efficiently, you can really see what tasks aren’t getting done. Maybe you thought you needed another coder, but it turns out that your current coders were spending too much time doing administrative stuff, and hiring an administrator would better free up time for them.
• It can make your case. In fact, this step may be enough! Maybe you learn that your employees are all working 55 hours a week. That’s clearly unsustainable, and to avoid losing your workforce you should present the findings to your executives immediately! If not, read on.

Step 2. Break Information down by Client and Project

Take the information you’ve gathered from tracking time, and break it down by client and project.

This data will be invaluable when making the presentation to your bosses. It gives you valuable knowledge about how much money your team is making the company, and how much it’s making for each client. It also shows that you’re imagining your boss’s point of view — a convincing approach for any audience.

Step 3. Project Forward

This is where your homework becomes most useful. Because once you know what your team’s work capacity is, you can plan for the work that’s coming, and allot the right employee time to accommodate it. Compare employee time and cost to a budget with resource planning to further enhance your argument.

If it turns out simply can’t fit enough work time in to complete the jobs on time, you’ve got a lock-tight argument for a new hire.

How’s this for a pitch? “The next 6 months call for our team to do X amount of work. But based on the last 3 months, we can only do Y. Even if we get more efficient — and since we’ve made good hiring choices all along, we’re close to being as efficient as we can be — we still won’t have enough work hours to make money for the company. This is why we need a new hire.”

Step 4. Envision a Glorious Future

Here’s where you whip out your big guns: describing the glorious benefits of hiring more people.

What this means: now that you know your capacity, you can create scenarios where your new hires expand that capacity so much that you’ll be able to do all sorts of wonderful new things.

Maybe you’ll be able to take on new clients. Maybe you can open that new office. Maybe you can become the industry leader in your field.

This is your chance to go big, and to let your bosses smell the roses that will be available to them, but only if they approve your request. It also lets your bosses see, very clearly, not only what your hire(s) will do for you, but what those hires will do for them.

This makes it easy for your bosses to say “yes.”

Make Your Presentation

The keys: you will have to crunch a few numbers. And you’ll have to spend some time thinking about how your team currently functions. Doing this second thing helps you contribute something to the conversation. It moves the presentation from “you should do this for me” to “here’s how we can fix this situation together.”