Why Small Businesses often Delay Hiring

I’m always encouraging small business owners to embrace the CEO mindset. That means aiming to work on the business instead of in it. Hiring a team and starting to delegate your operational and administrative tasks so you are free to focus on the more strategic aspects of the business.

Despite the stressful workload; long hours and desire to delegate, there are several common themes that cause small business owners to delay hiring. 

If one of these applies - you are not alone!

Here they are:-

1. Time and Resources Required for Hiring

• Hiring is Time-Consuming: Recruiting, interviewing, and training new employees requires a big investment of time and resources, which we often don't have as solopreneurs. When we’re deeply involved in day-to-day operations, then hiring can distract us from our other priorities.
• Training New Employees: Even once new hires are onboard, they need time to come up to speed. Small businesses may not have documented training ( like SOPs)  or onboarding processes, which can make this process slower and more labour-intensive.

2. Difficulty in Finding the Right Talent

• Hiring Challenges: In specialised industries like Amazon-selling, finding skilled workers can be difficult. Small businesses may delay hiring because they can't find the right person for the job, or they feel pressured to settle for less-than-ideal candidates.
• Cultural Fit Concerns: Small teams often prioritise maintaining a close-knit culture. Hiring the wrong person can disrupt that dynamic, leading businesses to delay hiring until they are certain they've found the right fit.

3. Financial Uncertainty

• Cash Flow Constraints: Many small businesses operate on tight budgets and may not have the cash flow to support additional employees. Hiring new staff costs not only salaries but also onboarding costs, bonuses, training, and taxes, which might strain finances.
• Unpredictable Revenue: Even if a business experiences a surge in sales, the owners may not be sure if it is sustainable. If the increase is over a short period or seasonal, (eg Q4) - then they may hesitate to hire full-time staff, fearing that they won't be able to support the new positions long-term.

4. The Desire for Efficiency and Cost Control

• Maximizing Productivity: Small businesses would rather stretch their existing staff to the limit before hiring to avoid unnecessary costs. They often take on more work,  look for ways to streamline operations or improve efficiency before taking on the expense of a whole new employee.
• Flexible Labour Solutions: Instead of hiring full-time employees, some small businesses might decide to hire part-time or freelance workers to handle short-term demand increases. This avoids the long-term commitment and overhead associated with permanent hires.

5. Cautious Growth Mindset

• Fear of Overhiring: Small business owners are often cautious about expanding too quickly. Overhiring during a busy period can lead to excess staff during slower times, resulting in layoffs, which can hurt morale and the company’s reputation.
• Lack of Confidence in Sustained Growth: Small businesses may lack the confidence or data to determine whether the increased demand is a lasting trend. They may choose to delay hiring until they are more certain of sustained growth, reducing the risk of hiring too early.

6. Unwillingness to Delegate

• Owner Involvement: In many small businesses, the owner or key managers may be reluctant to delegate important tasks. They may believe they can handle the increased workload more efficiently than a new hire, leading them to delay expanding the team.
• Fear of Losing Control: Small business owners often take a hands-on approach to operations, and hiring more staff can feel like losing control over quality or key decisions, prompting a delay in bringing on new people.

In short, small businesses delay hiring during busy times because of financial considerations, resource limitations, and the uncertainty that comes with growth. They weigh the risks and rewards carefully, ensuring that any decision to hire is sustainable and aligned with long-term goals.

Have any of  these has stopped you from hiring in the past?