When to hire your first employee in a service business

Hiring your first employee

This video is about hiring your first team member when you are the owner of a service-based business. The video provides valuable insights into the hiring process, and Tom Aldridge, the owner of Suburban, shares his experience of hiring new technicians. He talks candidly about the challenges small companies face while hiring new techs and the wages larger companies can offer top tier techs. He also demonstrates a great analogy for measuring capacity. Overall, the video aims to provide food for thought to business owners who are considering hiring their first team member.

Over his many years as the owner of a pest control business, Tom has been asked the question several times, “When should I hire my first team member?”

Tom believes that a more important question is “What type of team member should I hire? Should I hire a field team member or an Admin team member?”

In Tom’s view, working out the ‘who’ makes the question of ‘when’ much clearer. There are three possible scenarios to answer the ‘who’ question. He advises that you can’t just decide simply because it is convenient to you. You need to look at what is best for your business. Running your own business should mean being able to make your own choices, but it is also recognising that all choices have consequences. There is no right or wrong way, everyone’s business is different, but it is important to weigh up your options, just so that you can make an informed decision.

Over Tom’s time in business, he has witnessed people in the pest industry hire new staff, but he has also seen enough in other service-based industries who have travelled this same path, to know that this applies no matter what service-type business you are in. This includes hairdressers and retail owners, to electricians, plumbers, and mechanics. Any service-based industry shares similar challenges and journeys.

If you go back to the beginning when you first start out in your own business, the greatest challenge is finding the work. Once you get over the hump and the work is consistent, you can get so hectic and the temptation is to ask yourself "Why don't I hire another Tech, who can take this workload off myself? That will make everything less hectic, surely!" And then your head talk goes to "Then I can get off the tools a bit and start doing more of the admin I am not getting time for." Sounds like a brilliant plan.

However, if you ask anyone who has been through this, they will tell you one of three things:

No luck – they have spent months looking for a suitable tech with no luck
More harm – they might have hired one who did more harm to their business than good
More busy – the few people that struck gold and found a great tech will tell you how nothing changed, or worse, they got even busier. They spent more time managing the new team member. And then often they hire another one thinking that will be the solution, and the hamster wheel gets even faster with no way of getting off it!

So how do you work out what is right for your business?

Tom uses a ‘cup’ analogy to measure capacity as a key to answering this question.

He explains:

‍“As a single operator on your own, an example might be that you are doing say $250k worth of work per month. Also, as a single operator, you also may not have many costs e.g. you don’t have an office or overheads etc, so most of the cup is creating income.

‍If you hire an experienced tech to take yourself off the road, you might do say $350k worth of work per month. You will have additional costs i.e. wages, insurances etc. Is the net result making more profit, or are you just increasing your costs?

‍What if you hire a part-time Admin staff member, maybe to work a couple of days or a couple of hours each day? So your costs could be a lot less. You could then produce more income yourself because you have freed yourself from doing some of that admin work.

‍It depends on what you are hoping to achieve. Typically, in a lot of service industries, the goal is to find the ‘sweet spot’, maybe you might need to aim to build up to four Admin staff as an example to get to the point where you find the right balance between income and expenses.

So the cup analogy here is whether you want to fill the capacity cup or grow into a larger cup.”

A third option somewhere in the middle is recruiting a trainee. They won't get you extra revenue in the short-term, and you will have to invest in the long game of training and patience. But if you know how to guide them and mentor them, you will be able to get them to a point where they can take on tasks for you, and you will be able to take those phone calls and send those invoices much more easily.

Now, going back to the first option, which is hiring the perfect tech. There are many great technicians out there looking for work, but from Tom is seeing, small companies hiring their first or even second technician struggle to compete with the wages larger companies like Suburban can offer to attract top talent.

Having a great reputation, having stability and job security are also key things technicians are looking for, along with strong training systems and a great culture. Many small companies don’t have a lot of this in place which means they are usually the highest risk business for a technician to join. If you don't have any systems or processes in place and are struggling just to keep up with the day-to-day of getting jobs done, and if you are unfamiliar with managing an employee, then both sides are actually at risk.

The wrong tech can easily take you for a ride if they can see you are not managing things, and the company could risk providing horrible work conditions despite their best efforts or good intentions.

Not to discourage anyone, but small service business owners must understand that it is tough the first time around hiring an employee, and you probably won’t get it right on your first go. Tom also suggests that the trainee option, or part time admin staff option is a much safer route. It has the possibility of teaching not just the new recruit a whole heap, but you as the owner a whole heap along the way. And the best part is it will get you ready to find that perfect technician when the time comes.

Suburban is always on the lookout for good staff, particularly experienced techs, so if you are interested in joining a great company with an awesome team culture, please contact us or visit our Careers page for more info.

There are some great resources out there to help you hire your first staff member. Check out this great article from indeed https://indeedhi.re/43nsEQ3

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