As long as I've been consulting businesses, I've observed some key red flags in terms of hiring and how it affects the bottom line of the business.
I've been a business consultant for over 14+ years and one big red flag that I have observed over and over again is... owners cutting into their profit by spending too much on hiring or hiring too many employees due to being disorganized.
How does this occur? There are a number of ways. Current employees are not productive and efficient enough. Part of this is because they were never trained in the beginning nor were they given an outline of their duties and how to do them correctly and efficiently. This results in them taking more time during the day to get tasks done then it would if these things had occurred. That means you are paying more for less.
This results in them taking more time during the day to get tasks done then it would if these things had occurred. That means you are paying more for less.
Paying too much for an employee's individual salary is another way owners spend too much. They don't do their research. They are overwhelmed and "just need help" and they pay what that person is asking. This is another example of how profit is cut. Not to mention, most do not monitor their expenses and income effectively and with a strategic Bookkeeper or Consultant which results in not knowing where they stand financially.
Not tracking production stats of employees is also a red flag as then an owner cannot monitor what one is producing and if they are being productive or just "busy". Is a staff member being unethical by being on their phone half the day or are they slow in terms of handling the amount of work that needs to be done? You wouldn't know unless you had some type of monitoring system in place.
Since we mainly focus on the financial aspects and areas of a business, these are things we will inspect because it DOES affect the bottom line and we are trying to help owners increase their income, expand their business and increase profit so they can take home more money.
We suggest implementing some of these tips into your business and letting us know how it improves the bottom line!