As a startup or small business owner, you’re probably familiar with the dilemma of needing to grow your team but having limited funds. Hiring employees can get expensive fast, and it’s not uncommon to feel caught between the need to bring on talented workers and the financial constraints that come along with hiring them.
This tug-of-war situation can lead to overwork, stress, and stagnation of growth. Ultimately, if you spend all your cash to find employees, you could be risking the financial viability of the company.
But what if we told you that you can still hire employees even if you’re strapped for cash?
Yes, it’s possible! In fact, in my journey as an entrepreneur, I’ve found that hiring cheap and motivated employees can outperform highly paid (but lazy) ones.
In this blog post, I will guide you through different strategies for how to hire employees without breaking the bank.
- Many startups and small businesses struggle with hiring due to limited funds.
- Overworking and trying to do everything can hinder business growth.
- Various strategies exist for hiring employees even on a tight budget.
- If you do it right, you can successfully hire a competent workforce and save money at the same time.
The Challenges of Hiring With Limited Funds
Hiring talented staff on a budget can sound like an oxymoron. After all, the usual channels such as running ads and attending expensive networking events can drain the bank account quickly.
When you’re pouring money into your hiring efforts, it’s hard to keep afloat.
When new companies are trying to grow, the most common point of failure is running out of cash. In a U.S. bank study by Jesse Hagan, it was found that 82% of small businesses fail because of cash flow problems.
Like any valuable business process, there is typically a considerable barrier to entrance for hiring new employees. Traditional hiring channels like job boards, employment agencies, and newspaper classifieds are some of the most common methods.
All of these job posting methods cost at least a few hundred dollars a month on the low end up to 5 figures on the high end. Not to mention the onboarding and human resources costs associated with bringing on new talent.
You can start to see how hiring employees can look like a money pit.
Why You Should Still Consider Hiring
Even though the risks are real for investing in a workforce, you should still hire employees to grow your business.
Doing everything yourself can only work for so long. At some point, you have to delegate tasks to scale and grow your business.
Delegation is a powerful tool that has many benefits for growing companies such as:
- Streamlining operations
- Freeing up mental capital
- Multiplying value for customers
- Initiating innovation
- Facilitating faster decision-making
In the competitive modern economy, delegation is an absolute must. If you’re not expanding your production capacity, you risk getting left behind because you can be sure that your competitors are!
Creative Ways to Hire Employees with No Money
Since we know that hiring is a must, and we also know that the regular hiring channels are expensive, we have to get creative if we want to hire on the cheap.
So let’s dive into the different ways you can hire employees even if you’re on shoe shoestring budget.
1. Offering Equity
One way to save money when you’re hiring is to offer equity in your company. Instead of a traditional salary, you can offer a stake in the company’s future success. This method can be particularly attractive to potential hires who believe in your business’s vision and see long-term potential.
For example, many tech startups have successfully used this approach to attract top talent. They might not have had the cash for competitive salaries initially, but by offering equity, they were able to bring on board skilled professionals who were willing to invest their time and expertise for a share in future profits.
The benefit of this approach is twofold: it saves you money in the short term, and it can also lead to more dedicated, motivated employees. Those who have a direct stake in the company’s success are likely to work harder and stay longer, reducing turnover and boosting productivity.
However, be careful when you’re taking the equity approach. Not everyone who wants a piece of the pie will be right for the job.
Be transparent about what is expected to own a part of the company, and consult with a legal expert to ensure that everything is done correctly and fairly.
Remember, equity is a piece of your company’s future, so doll it out with care.
Internships or trainee programs are another way to find valuable employees on a limited budget.
This can be a win-win situation for both the business and the intern. You get additional help at a lower cost, and they gain valuable work experience.
For example, many colleges and universities have internship programs where students are eager to apply their academic knowledge in a real-world setting. They’re not looking for high salaries but rather practical experience and an opportunity to learn.
Reach out to your local post-secondary institutions and talk to student groups in the skillset that you’re looking for. Business, law, and science departments are full of bright minds who are willing to work for cheap or even free.
I know that in my college days, I was starved for summer work experience and was tired of searching for employment opportunities.
Take advantage of this!
A key tip here is to ensure you provide meaningful work and learning experiences. This will not only attract more interns but also enhance their productivity and commitment to your business. Plus, a well-structured internship program can act as a pipeline for future full-time hires.
When interns have a positive experience, they might be more inclined to accept a job offer upon graduation, saving you on future recruitment costs.
3. Freelancing/Contractual Work
The gig economy has made it possible for businesses to fill gaps in their workforce without having to hire full-time employees. Hiring freelancers or contract workers can be a cost-effective solution, particularly for projects or tasks that don’t require a permanent staff member.
For instance, if you need someone to design a website, manage your social media, or write blog posts, many skilled freelancers can do the job without the long-term financial commitment of a full-time salary and benefits.
You can find skilled workers to do this kind of work and more on popular outsourcing websites such as Upwork or Fiverr.
Check out the best outsourcing websites to find the talent you need, streamline your recruitment process, and grow your business
A useful tip when hiring freelancers is to have a clear contract outlining the scope of work, deadlines, and payment terms. This ensures both parties understand their responsibilities and can help avoid misunderstandings.
Don’t be like me and get scammed by someone on the other side of the planet for not outlining the terms of the work (yes this did happen to me, but it is entirely avoidable!)
Freelancing provides flexibility, allowing you to scale your workforce up or down as needed. This can be a significant advantage if you’re operating with fluctuating budgets, as it helps control costs while still getting the work done.
4. Hiring Part-Time
Hiring part-time employees can also be a strategic move for businesses looking to save on hiring costs. This approach allows you to bring in the talent and skills you need without the full financial commitment of a full-time salary and benefits.
Part-time workers are a godsend for all kinds of small businesses. If your business has increased customer traffic during specific times of the day or certain days of the week, you can tailor your workforce to meet the demand.
Instead of having full-time staff sitting around during slower periods, hiring part-time workers can be a more efficient use of resources.
5. Leveraging Remote Work
With the power of the internet, you would be a fool to not leverage remote work. By hiring remotely, you can tap into talent from all over the world without the additional costs associated with maintaining a physical workspace.
Many tech startups could hire a top-notch developer from a country where the cost of living is lower, thereby getting high-quality work at a fraction of the local cost.
Make sure you invest in robust communication and collaboration tools. This ensures that your team stays connected and productive, no matter where they are.
When you get good at hiring remote workers, you can build out a full team of A players from all over the world and do so at a fraction of the local cost.
I personally love hiring remotely because I feel like the employees like it too – who wants to drive into a physical office and be on the clock when it can be avoided? I find that this increased flexibility leads to higher job satisfaction and reduced turnover – another potential saving in recruitment costs.
The shift to remote work requires some setup and practice, but it can be a game-changer in terms of cost efficiency.
6. Hiring Friends & Family
Hiring friends and family is one of my favorite ways to build a workforce right away.
Many people say “Don’t mix family and business”.
One of the hardest parts of finding reliable employees is learning to trust them with your business. As many business owners can probably attest, it’s hard to trust others to work hard and take care of things, especially when your money is on the line.
What better way to get trusted employees when you already have a shared history with them?
Ask your young cousins, nieces, and nephews if they want a couple of extra bucks to help out after school. Or if they are studying something relevant in university, even better! Hire them as interns for the summer and exchange work for experience.
Leveraging your warm network of close acquaintances can supercharge your workforce and save a ton of time and money in the process.
Don’t listen to the naysayers who have poor relationships with their families. Many family-run businesses have been monumentally successful and yours could be one too.
Taking it to the Next Level: Maximizing Your Existing Resources
Once you’ve found and exploited a cheap and efficient hiring strategy, the next step in cost-saving is to maximize the use of your existing resources. This involves getting the most out of what you already have at your disposal – your current team, technology, and even your workspace.
Optimizing Employees Roles
Start by analyzing your team’s skill sets. You may be surprised to discover hidden talents or abilities that can be utilized in other areas of the business. For example, a member of your marketing team might have a knack for graphic design, which could save you the cost of outsourcing this work.
Before going out and hiring someone new, don’t be afraid to switch around roles and responsibilities. Sometimes a change of scenery is all someone needs to explode in productivity.
Automate with Technology
A very important question to ask yourself – Are you using technology to its full potential? Many businesses struggle because they’re using the paper-and-pencil equivalent of their operating procedure. Meanwhile, their competitors are approaching warp speed in growth because they’re using the latest tech.
Don’t do this to yourself.
Keep up to date with software and hardware tools that can make work easier and faster. Any task that can be automated should be BEFORE you delegate it to someone else.
Invest in regular training sessions for your team so everyone is operating at peak capacity. Trust me, this small investment will cut costs tenfold over the long term.
Enhance Your Workspace
Lastly, look at your workspace. If you have a physical office, is it being used efficiently? Could you sublet unused space, or could a shift to remote working reduce your overhead?
There’s a common misconception that you need a physical office with certain features to run a successful business.
This is simply not true.
In fact, you can run a business from your basement and cut out the office costs entirely.
When prioritizing expenses, you need to make a clear distinction between nice-to-have and need-to-have. If you can, take the money you save from leasing a physical location, and reallocate it into hiring a fully remote workforce. Your productivity will go up, your costs will go down, and your balance sheet will shine.
By scrutinizing and optimizing these aspects of your business, you can unlock cost savings without having to make drastic changes or big investments. It’s about working smarter, not harder, and making every resource count.
Conclusion: Making It Work Even on a Budget
In conclusion, hiring employees when funds are tight may seem like an uphill task, but it’s entirely possible with strategic planning and creative solutions.
The key is to explore options such as offering stock options, hiring interns, and part-time workers, or leveraging remote work.
Also, don’t overlook the potential of maximizing your existing resources. Your current team, technology, and workspace can offer untapped potential if utilized efficiently.
I firmly believe that being broke is merely a state of mind. With careful budgeting, a clear recruitment plan, and a commitment to making every resource count, you can build a talented, dedicated team that will drive your business forward, even on a limited budget.