When does over-hiring truly become a burden for business?

April 20, 2022
When does over-hiring truly become a burden for business?

It's easy to mistake more for more in the workplace. Increasing the number of followers, likes, customers, and profit is the goal of every business. Your image is everything, just like the countless awards or the number of foreign offices you have. The more you possess, the better you're practicing, and the more credibility your company will enjoy.

Setting up a business is all about finding the right mix of people and assets, and that includes finding the right balance between the two. In many professions, hiring new employees is often done with a "more the merrier" mindset that overlooks the long-term consequences of hiring too many people. So they consider hiring far more people than they plan to keep, but is this a good business strategy in the long run?

Unemployment and candidate-to-position ratios are at their highest levels in decades. As illustrated by ere.net in 2009, according to one account, more than 14,000 applications were received in just five business days for a single position, which meant nearly 3,000 applications per day. 

In order to appear successful, executives may feel the need to maintain a competitive edge in their industry. This line of thought can also be connected to the size of the company. An impressive number of 300 employees in less than a year is only a right to boast about if each employee has been fully utilized and has contributed significantly to your business.

Over-hiring has the potential to be harmful to your company's bottom line. When you hire someone because of your ego instead of a need, the consequences will begin to emerge. 

When money is no more a problem

There are many startups that suddenly experience rapid growth, particularly after a large funding round. Finally, after a long period of squeezing every last penny, there is enough funds to double the number of workers.

When money is no longer an issue, fast-growing companies tend to do three things when it comes to hiring. First, there is no HR strategy. This results in a lack of consideration for the company's values, culture, and long-term needs when hiring new employees. 

Second, as soon as someone is employed, little attention is paid to their performance. This is so especially if the company is growing rapidly. Third, little attention is given to the reasons why there are so many employee turnovers. When this happens, data records can be all over the place. 

Without sounding too harsh, the reality is that over-hiring when money is not a problem can bring about an egoistic invisible attitude of “nothing can hurt me”, however, the biggest of businesses have fallen trap to false behaviors. 

Excessive hiring leads to dissatisfaction‍

Complaining started as soon as people realized there was not enough work for everyone. Because that's what individuals do when they feel like their presence is no longer necessary. ' They began to voice their displeasure with the sales deck, the product's narrative, and the performance of their colleagues. "We aren't working effectively because our department is too large," is what we're trying to avoid saying.

Making the decision to bring on a new employee necessitates thoughtful deliberation. Preempting the need for staff by employing employees before you have a need for them can be as detrimental as being understaffed. Consult with everyone on the team to see if they believe they are working to their full potential or if introducing new talent would benefit the group and the company overall.

How can I avoid this? In the early stages of a company's growth, it can be difficult to avoid employing too many people because venture capitalists want to see economic growth.

Could over-hiring be advantageous?

Hiring more employees than necessary has a number of advantages, including the ability to:

First, it includes the ability to create a competitive atmosphere within your company and amongst your peers. Meanwhile, employees can also assess the ability of new recruits to apply their knowledge in a real-world setting. 

By hiring more people, theoretically allows you to hire more people who don't fit your traditional employee profile and thus diversify your workforce over time. However, many studies show that over-hiring actually has the inverse result inevitably leading to monolithic worksites where women and underrepresented groups are often the first employees to leave. In short, only hire those workers who have already shown themselves to be a great cultural fit for the company.