The Challenges of Scaling Up: Human Resources

Right now, you may have little Idea as to the number of hurdles you’re going to face when you say the words, “It’s time to scale up.” Prepare for a world of heartache, stress, frustration, anger, and breaking even.

As horrible as that may sound there are definitive reasons to put up with it for years until you successfully break the barrier and move into that sweet spot of major profitability.

For example, your business could be worth 10 times what it is now so you’ll be able to sell it later, you’ll employ 10’s if not hundreds more people, you’ll be much more profitable, you’ll be a leader and well off in retirement because of the decisions you made early on in your career. There are so many more reasons to want to scale up. Personally, my reason to scale up is that I’d like to leave a legacy before my working days are over, but that’s just me.

Striving for that end result is worth putting up with all growing pains associated with scaling up. If you’re planning to take your 1-5 person company to a 20-50 person company, then stick around. I’m going to be writing a few articles over the next couple week about the 5 key areas to pay close attention to when scaling up. Starting with probably the most important…

Human Resources

The most valuable commodity when scaling up is without a doubt the human element. You need headcount, in any situation, to scale up. It’s unavoidable. More people means more can get done, you can generate more revenue, which allows you to hire more people, and the cycle continues.

But, like we’ve found out the hard way, if not managed properly, you’ll have a heck of a time with HR, so much so that half your staff may just walk out the door one day and leave you holding the bag.

There are a few things that absolutely need to be considered when increasing your headcount to avoid a similar situation:

  • You’ll need killer employee on-boarding & indoctrination: The on-boarding process is everything, this is when you introduce them and inform them on your company culture, your core values, what their roles are and who they report too. Often times when scaling up you’re working so fast you sit the employee down, forgo the formalities and put them straight to work. This is a mistake and will yield long term consequences. Take the time, up to a week, to properly on board your employees so they stay for the long haul.
  • You’ll need a defined company hierarchy: In small business everyone pulls their weight, and it can often feel like more of a collaborative environment than a company with structure. This does not work if you’re going to scale up. You need a defined system of who reports to who, defined job descriptions, key roles and divided responsibilities. Else, you’ll have no idea where to go if stuff hits the fan and you need answers right away. Your sales people do sales, your developers develop, and your project managers manage. That’s it.
  • You’ll need a proper hiring process: Now that you’re scaling up a culture will begin to form within your company, and it’s up to you to decide what that culture is going to be. The culture is formed by the people you hire, so hire people that reflect your beliefs and the company’s values. Otherwise that employee will sour the water and cause the whole thing to fall apart.
  • You’ll need room to grow: Even though you’re a small business and the cap level stops with owner, you absolutely need room for your original batch of new hires to increase in rank and status within your company within the first 2-3 years. Nothing will end your relationship faster than stagnation. The reason being, these people will likely hold a majority share of the responsibility for the success of your company for a good couple years. In order for them to see that responsibility through, there needs to be an incentive in status, money, and responsibility at the end of the rainbow. Otherwise, kiss your investment in time and money goodbye. It’s no longer just good enough to offer a good paycheck and expect loyalty.

There’s more than that, but from my own experience of scaling up those are the major takeaways. Making sure you have solid plans to take care of the above will not only save you a massive headache, but save you time, money, and possibly even your business.

If you want to talk about how to avoid major hiring disasters when scaling up, feel free to book a chat with me. 416-444-7767. Alternatively, I’d be happy to answer questions during our monthly Business Heroes Group. To become a member of the “fast-growing” business group simply click here!

About Paul Tobey 101 Articles

Paul Tobey is the CEO of Training Business Pros and Lead Trainer as Canada’s Top Digital Marketing and Sales Trainer. Training Business Pros helps established business pros adopt proven digital marketing processes. The company has trained over 50,000 business owners across Canada and the USA, to a high degree of positive outcome, with some of his clients recognizing Paul as their catalyst to helping them earn millions.

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