When to Hire Staff: How to Know You're Ready (and When You're Not)

Oct 7

9 min read

Key takeaways

When to hire staff comes down to your business, not a rule of thumb. Start with what you want the business to give you, and whether you actually want to manage people.
Do the leverage maths. One person taking 20 hours a week off your plate gives you back 80 hours a month. Those hours should earn more than the salary costs.
Hire for where you're going, not for what's piling up. Map your goals for the next 12 to 18 months, then hire for the skills that get you there.
Hire people who complement you. Profiling tools and clear job ads help you find someone who covers your gaps instead of a copy of you.
Money isn't the main thing that keeps good people. Purpose, autonomy and flexibility do a lot of the heavy lifting.

Kate De Jong and Sam Morris with headphones on

Here's a question Kate asks business owners all the time. Could you take four weeks off and leave your business running?

If the answer's no, you're carrying a lot. You're the one answering the phone at 11pm and doing the admin on a Sunday afternoon. And as Sam put it, the business isn't really a business yet.

“If you're the business owner and you can't step out, then you don't have a business, you have a job.” — Sam Morris

That's where we started in episode 11 of season two of the podcast. If you're trying to work out when to hire staff, or whether to hire at all, this is everything we covered: the maths, the signs you're ready, the signs you're not, and how to build a team you'd trust with the keys.

Why does hiring feel so scary?

Because so much can go wrong, and you feel all of it.

Hiring is scary because it's practical and emotional at the same time. You're taking on cost, compliance and responsibility for another person's livelihood, and most owners never feel fully ready.

“I think hiring is one of the scariest things that business owners do.” — Sam Morris

Sam had been through the numbers before we recorded. Her read was that fear of everything that could go wrong stops a lot of owners from hiring, while the solo owners who never hire report higher rates of burnout.

Should you even hire staff for your small business?

Not everyone should, and that's fine.

Whether you should hire depends on the type of business you run, what you want from it, and whether you actually enjoy managing people. If you don't, there are other ways to get leverage.

Kate made that choice herself. She's a thought leader and coach, and she's chosen not to employ staff.

“I love leading people, but I don't like managing people.” — Dr Kate De Jong

Leading and managing are different skills. Sam's point was that managing well doesn't come automatically, even for people who've been doing the job for years.

“Just because somebody gets promoted into a management position does not make them a good manager.” — Sam Morris

Research backs her up. Alan Benson, Danielle Li and Kelly Shue's study "Promotions and the Peter Principle" (Quarterly Journal of Economics, 2019) looked at sales workers across 214 firms. They found firms promoted on current sales performance, even though other traits better predicted who'd be a good manager. So ask yourself: do you want to manage people? If not, can you learn to, or hire someone who'll manage the team for you?

There's also a third path now. Kate runs a lot of her business with automation and AI. Sam's caution: AI still needs supervision. One platform update can break a system you've stopped watching. If you want to see where AI could take work off you before you hire, our AI Setup Workbook is a good place to start.

How do you know when to hire staff?

Run the numbers, then look for the signs.

It's time to hire when someone else could take on work that's keeping you from the revenue-generating part of your business, and the hours you get back would earn more than they cost. That's the maths of leverage.

“If you hire one person who takes 20 hours of work off your plate every week, that's 80 hours a month you can get back.” — Dr Kate De Jong

Sam's version of the sum is realistic, not rosy. Say only 40 of those 80 hours turn into revenue-generating work. That income should still be more than the salary you're paying. If it isn't, the role's not right yet.

The signs you're ready, from Kate's list:

You're constantly turning away work.
You're working unsustainable hours.
Tasks are falling through the cracks.
You're doing work someone else could do for less than your hourly rate.

The signs you're not ready yet:

You don't have documented systems.
You can't clearly say what the role involves.
Your revenue isn't consistent enough to support a salary.
You haven't worked out what you're actually hiring for.

Do you need systems in place before you hire?

Mostly yes, but we didn't fully agree on this one.

In most cases you'll want the core of your processes written down before someone new joins, so they've got something to follow. But some owners hire specifically to build those systems, and that can work too.

Kate worked with a draftsman whose business was in chaos. He needed help, but there was nothing documented for a new person to step into. So they used AI to capture his procedures as he worked, without doubling his workload. Sam pushed back on the idea that systems always have to come first. Sometimes the right first hire is the person who builds them.

This is Michael E. Gerber's argument in The E-Myth Revisited (1995). Most small businesses are run by technicians doing the work, rather than owners building a business that runs on systems. Either way, someone has to work on the business, not just in it.

What should you hire for: today's tasks or your goals?

Hire for where the business is going.

Hire for the skills you'll need to hit your goals over the next year or so, not for the tasks piling up on your desk this week. Hiring because you're busy is how you end up with the wrong person in the wrong seat.

Kate shared a suggestion from Claude that we both liked: map out your business goals for the next 12 to 18 months first, then hire specifically for the skills you need to achieve them. If the goal is better internal systems, your job ad should talk about building systems, and it'll attract a different person from a generic ad.

Jim Collins calls this "First Who, Then What" in Good to Great (2001). Get the right people on the bus and in the right seats, and you can work out the direction together. It also means your values matter in hiring. We wrote about that in how to write business values that actually drive decisions.

How do you find the right person, not a mini version of you?

Hire for your gaps, and get some data on how people work.

Hire people who complement you, not people who think and work exactly like you. Hiring someone with the same blind spots, however skilled they are, doubles your weaknesses instead of covering them.

We both use personality profiling to help with this. Tools like B.A.N.K, the Harrison Assessment and Myers-Briggs show how someone's likely to approach work. In B.A.N.K, for example, a Blueprint type loves structure, which makes them a natural fit for a systems-building role. Write your job ad in language that speaks to that type and they'll self-select.

Kate's also started using AI here. Harrison Assessment reports can run to 20 pages each. She gave Claude the reports for several candidates at once and asked it to rank them with reasons. It picked up things an hour of human analysis had missed. Sam's caution was fair: AI's only as good as what you feed it. Analysing AI-written cover letters tells you little. Analysing real psychometric data tells you a lot.

People also present differently in an interview than they do once they've settled in. Sam put it bluntly: three days into the job, the true person starts coming out. Hence the old saying she quoted: hire slow, fire fast.

Kate shared a better way to handle red flags too. One of her clients saw some in a candidate's Harrison results but didn't rule them out. She trialled them, then raised those areas as things they'd work on together, starting with their strengths. The new employee recognised the behaviours themselves. That conversation takes emotional intelligence, which we unpacked in how to develop emotional intelligence as a leader.

What about awards, Fair Work and compliance?

It's one of the biggest barriers, and it's not getting simpler.

Compliance is one of the hardest parts of hiring in an Australian small business. Awards, Fair Work, workers' compensation and workplace health and safety all have to be got right, and it's getting more complex.

In Sam's experience, Fair Work won't confirm whether you're interpreting an award correctly, so you end up paying for advice. She's found that extremely hard to swallow. Our suggestion is to budget for good HR or employment-law advice as part of the cost of your first hire, and use the Fair Work Ombudsman's small business resources for the basics.

What do good employees want, if it isn't just money?

Purpose, autonomy and a workplace they like being part of.

Salary matters, but it's rarely what keeps a great employee. Purpose, autonomy, flexibility and a sense of belonging tend to drive performance more.

“If they're a high performer, they can get the money elsewhere.” — Sam Morris

Kate put her own preference plainly:

“I'd much rather a lower salary but have autonomy over how I get my KPIs done.” — Dr Kate De Jong

Daniel H. Pink makes the same case in Drive (2009). He argues autonomy, mastery and purpose are stronger motivators than external rewards like money. In practice that means shared goals, a path to grow in the role, and flexibility about how the work gets done.

Can a small business build a great team?

Yes. It happens all the time.

Yes. An IT business Kate's close to has ten stable staff who gel well, thanks to a clear culture and good hiring. A bookkeeping firm she knows has eight women working remotely, some together for around 15 years. They share a virtual office every day and meet in person twice a month. When someone doesn't fit, they're managed out, and the core team stays strong.

That's the goal. A team that runs the ship when you're not there, so you can take a proper holiday and come back better.

Frequently Asked Questions

How do I know when to hire staff for my small business?

Look for the signs: you're turning away work, working unsustainable hours, dropping tasks, or doing work someone could do for less than your hourly rate. Then check the maths. The hours you get back should earn more than the role costs.

Should I have systems documented before I hire?

Ideally, yes, so a new person has something to follow. If you don't, you can use AI to capture your processes as you work, or hire someone specifically to build your systems.

What matters to employees more than salary?

In our experience, and in Daniel Pink's Drive, it's autonomy, a sense of purpose and room to grow. Flexibility over how and when the work gets done is a big one too.

Can I use AI in the hiring process?

Yes, with care. AI can summarise and compare psychometric reports quickly and spot patterns you'd miss. It's much less useful for judging cover letters, since many are now written with AI.

What can you do this week?

Ask yourself honestly: could you take four weeks off right now? If not, write down what would stop you.
Track your hours for one week. Circle everything someone else could do for less than your hourly rate, and add up the total.
Write down your goals for the next 12 to 18 months, then list the skills you'd need on the team to reach them. That's your first job description.

We're Dr Kate De Jong, a PhD engineer turned business strategist, and Sam Morris, a Navy veteran who's spent 20 years in business working out what makes businesses tick and what makes them stall.

“Focus on keeping your staff happy in ways that extend beyond the bank account.” — Sam Morris

To Hire or Not To Hire? When and How to Build a Team That Fuels Your Freedom cover art

Listen to the full episode

Ready to Work Through the Whole Thriving Business Wheel?

The Thriving Business Launchpad takes you through every quadrant of the Thriving Business Wheel with AI prompts you can work through in your own time, at your own pace. Earn. Keep. Grow. Lead.

Join the list and you'll be the first to know when it's live.

Be first to know