Building a business case for a new hire

By February 15, 2017Human Resources
Human Resources Business case for a new hire

If your team is regularly leaving work with a never-ending to-do list, it might be time for a new hire. After all, overworked employees are stressed employees, and that combination usually results in less productivity and less profits. A new hire will help to alleviate the work load – and they’ll boost morale among the existing team, which can help get motivation back on track.

But before you can start writing that job posting, you have to convince the C-suite. They’ll want to see a business case for a new hire that shows how an additional employee will lead to bigger profits.

Sounds daunting? Don’t panic. Read on for a step-by-step guide to creating a business case for a new hire, complete with input from experienced HR and performance management experts.

Step 1: Audit and quantify the staff’s workload

“To make the case that you need to hire someone or outsource a task, you must prove how your plan makes the team’s existing workload more efficient,” says Adrian Travis, performance management expert and principal at Trindent Management Consulting Inc.

He recommends undertaking a process called workload quantification. “Calculate your work-time relationship. For example: ask employees how much time they are spending on different tasks. Is each employee’s workload equally distributed? How many people do you really need for this job?”

Leslie Vine, efficiency expert and principal of Vine & Associates, agrees. “Such an audit can help identify where the actual needs are, and can point to where the company can improve,” she says.

Step 2: Align with the organization’s strategic direction (and cite real data)

HR leaders need to generate value for their function in the greater business context, says Laura Croucher, national leader of the People and Change practice within KPMG’s Advisory Services. “Engage peers at the leadership level of your organization and get their input and feedback on your people management strategy,” she says. “Talk to your customer service manager, operations manager, etc., start to speak their language, and ensure your strategy is delivering on their particular business functions.”

And to give your business case proper grounding relative to financial metrics, Croucher says that the hiring strategy must be based on real information from real data. “Your HR function must be fully aligned with other leadership teams, so you are all working towards one common vision together,” she says.

Step 3: Focus on revenue impact

What are your overtime costs for existing employees? What are your telecommunications costs for remote workers? Identify the critical workforce segment that is contributing most to your organization, and examine how you can engage, develop and retain them with the proper support.

“Recruiting costs can become a distraction, so it’s important to focus on the ROI of each new hire,” says Joy Pridie, management consultant and former senior manager of human capital at Deloitte Canada. “Consider how you can increase shareholder value, and pick recruitment metrics within those areas.”

Revenue that each employee can generate is a simple but important metric that can set internal benchmarks. Quality and speed of service are also impactful as they measure efficiency. Beyond that, go back to your organization’s strategic direction. “Improving your team’s competency development could become a competitive advantage for your company,” says Pridie. “And employee engagement can be important too, as it can be proportional to business performance.”

Essentially, says Pridie, the financial picture should be based on the total charge. “Analyze impacts on operational stability, business continuity, and alignment of incentives within the organization,” she says.

It takes time, but building a business case for a new hire helps the C-suite move hiring initiatives from the cost column to the profit column – and, in turn, helps you to develop a well-rounded and productive team.

See also:
How to write targeted job postings that save you time (and money)
Why your small business needs a recruitment process

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Join the discussion One Comment

  • Mike Badger says:

    Great article. I am trying to build a business case for hiring an internal trainer for our support team and this gave me key ideas I needed to consider in my business case I wouldn’t have. Thanks.

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