How To Bring Employees Back To Your Small Business

CEO of National Business Capital & Services, the #1 FinTech marketplace offering streamlined small business loans and services.

The Covid-19 pandemic caused an unprecedented financial ripple effect in nearly every industry but hit the small businesses that define America the hardest. Throughout the first six months of the pandemic, more than 60 million Americans filed for unemployment insurance. That’s 23 million more than the 37 million who filed claims during the 18-month Great Recession. 

By now, many small-business owners who made the difficult decision to shrink or temporarily pause are rebuilding. As they have already learned, though, rebuilding your business isn’t as easy as flipping a switch and watching your business rebound to its pre-Covid-19 state. As a small-business owner, your plan to rebuild should focus on rehiring employees who can fulfill your immediate needs while simultaneously paving the groundwork for growth in the new norm.

Analyze your cash flow to determine what (or who) you can afford to hire right now. 

Before diving into your roster, start by analyzing your business from a financial perspective. If you’re still experiencing cash flow challenges, rehiring every employee may not be an option. 

Rather than an all-or-nothing approach, create a plan to hire who you need and then ramp up your staff as cash flow allows. Consider who you can afford to rehire based on the revenue you’re currently generating while taking other operating expenses such as rent and utilities into account. Remember that the cost of hiring extends beyond wages and includes insurance, equipment and more.

Financing is one tool you can use to accomplish objectives without stifling cash flow, such as buying new equipment. You can finance equipment over two- to 10-year terms, depreciate it 100{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} in that tax year (in most cases) and reap its benefits without laying money out. This can help you conserve cash while driving revenue.

As your business progresses and you have more working capital, you can add more employees to the mix.

Rehire employees who drive revenue by performing crucial functions.

Creating jobs is rewarding in its own right, but with your cash flow in flux, you’ll need to focus on driving revenue. Take a step back from the day-to-day in your business to evaluate which employees, departments or job functions are indispensable, not only for your day-to-day operations, but to drive your bottom line.

The employees at the top of your list should be the ones who, in the past, have played a key role in generating revenue. Depending on your industry and business model, you may also want to consider which employees can perform multiple functions in your business.

On the other hand, remember that it’s your responsibility as the small-business owner to be a strategist, not the boots on the ground. While you may have stepped in to handle everyday tasks during the pandemic, step away from the day-to-day. Instead, give yourself the time you need to put the pieces in place.

Communicate your plan to employees clearly and transparently.

Regardless of your industry, the employees who understand your business and industry are your No. 1 asset. Communicate to employees you intend to bring back that they have a spot on your team once business flows. Losing talented and motivated employees, either to your competitors or another industry, means spending the time and money to train more employees.

To this end, communicate your plan for rebuilding your business to employees openly and honestly. Be explicit and clear with employees about if they may have a job in the coming weeks or months, approximately when and any changes they should expect. Employees will understand that your plan is fluid due to the pandemic’s unpredictable nature, but keep them apprised of changes. Most importantly, be empathetic to all employees and understanding of those who may feel the need to seek employment elsewhere.

On the other hand, stringing employees along with unrealistic promises will only harm your company and reputation in the long run. Dishonesty will deter employees from returning to your small business, which causes you to lose valuable talent and the potential to generate revenue.

Set new expectations and goals based on the new landscape and industry trends.

Key performance indicators (KPIs) can be a helpful tool for measuring your employees’ success, especially in data-driven roles such as marketing and sales. Following an extended pause, though, your pre-Covid-19 targets are probably not realistically attainable or an accurate measurement of your success as you rebuild.

Instead of missing unrealistic targets, reconsider your expectations based on your resources. When you hit a milestone, increase your goals and work toward the next milestone.

Consider using a business line of credit to accelerate your hiring process.

Adding employees back to your team is a natural step as your business grows. But if things move slowly, your cash on hand may not cover the full costs of the employees you need.

Taking a business line of credit gives you cash on hand to cover extra payroll costs as your business scales back up. Unlike a standard term loan, a line of credit gives you the opportunity to draw cash as you need it and only pay interest on what you take. During a transitional period like this, the option to cover sudden, unexpected expenses could make the difference between staying afloat and reaching the next milestone.

Banks tend to offer the best interest rates but favor businesses with strong financials. Fintech lenders, on the other hand, are generally more accepting of credit challenges and can provide financing in a few hours, but at higher rates.

As you fit the puzzle pieces back together, keep in mind that the final product may not look exactly like your business did in the months before the shutdown. Instead of molding your business back to its original form, take incremental steps toward building a business that’s profitable and efficient in the new landscape.

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