425: A Construction Company Owner's Guide To Hiring Employees

This Podcast Is Episode Number 425, And It's About Digital Disaster Recovery For Your Construction Company

Hiring or not hiring employees is one of the few optional things the business owner chooses, changes their mind, or changes direction as needed. With so much discussion about employees, payroll, and payroll taxes, you may feel that you miss out on not hiring many employees. The reality is that as a small business owner, you do not have to hire employees.

The two extremes in any business are "Too Many People" (with many looking busy) and "Too Few" (a handful are overloaded). An example of Too Many People is for a midsized firm having everyone with access to the accounting. I mean everyone from the "Shop Guy," Warehouse, Outside Salesman to Accounting Staff.

Depending on the size of the construction business, this might be necessary. However, for most companies letting everyone have access to the balance in the company checkbook creates "White Noise" and causes friction.

"The company is making all this money" – I am justified in being lazy, stealing (time or material) services. Lots of time spent standing around with a coffee cup in hand being too crucial to doing the work they were hired to do. That leads us to...

Hiring Toxic Personalities

Businesses hire more staff as they grow. But if they expand too quickly, they will feel pressure to fill positions on their team, even if the job candidates have a few personality flaws. While some people change, others don't, and a few toxic personalities will poison your company culture.

This is why controlling growth is so important. Though it is hard to predict, you can create a game plan when you exceed your projections. Building a team of healthy personalities is another priority. If you don't, toxic employees will look for coworkers with similar values. If they can't find them, they will try to hire them!

But what personalities should your company avoid? There are many, but micromanagers are one of the most common. Instead of letting their coworkers do their jobs, they bug them over minor details, sabotaging team goals. Project Managers do manipulate emotions as part of their job, but some abuse this power. For example, they will try to ruin people with gossip, or tell bosses what they want to hear, even when they know it is terrible advice.

Instead, always look for team members that value their coworkers and employer, and have enough emotional maturity to find and fix their weaknesses. They will become better team members over time and face problems even when they feel uncomfortable.

Hire the right person and create a balance

Too many cooks in the kitchen. We have all experienced this on holiday events. Multiple people who are used to doing things their way are all working in the same kitchen. Is everyone working together seamlessly to get the meal ready? Depending on the dynamics, the answer is Maybe Yes, Maybe No.

Does everyone know: 

What needs to be done? Who should do it? Can it be delegated? Is the task time-sensitive?

The same can be true in your business. There are too many jobs and not enough time for a single person to do everything. Yet, everything needs to get done. But what, in what order, and by whom?

Very few employees will work with the dedication of an owner. Why? Because at the end of the day, they are not the owner. They do not have a vested interest of an owner.

Flipside, I have seen owners delegate everything to the employees. Seagull Management! Attitude is "Make Me Rich," I'm doing more important things, "Goofing Off." Hint – this could lead to lots of theft.

I attended a conference where one of the speakers explained that as the company grew, she needed to delegate. Too Many Hats. She discovered that as a business owner, the hats were added one at a time until it felt like she was a juggler at the circus trying to keep all the balls in the air. Sound familiar?

What she discovered was that employees were unwilling to put in the same number of hours and efficiency. They didn't have the same priorities. So as she sorted out the jobs – she discovered it took three people to do the bulk of what she had been doing.

After all the delegating, she still had plenty of stuff deemed urgent, essential, and necessary that only she could do. But, unfortunately, not many people can afford to hire a professional business manager to handle all business and personal matters.

In conclusion

Don't add staff just to have staff. Employees are expensive. In Washington State, it is mandatory to offer Family Leave and PTO. Family Leave is similar to State Unemployment which is calculated on gross wages paid. PTO (personal time off) is at a rate of 1 hour per every 40 worked. The employee can use the time off anytime they want – no notice given) Other benefits may include paid vacation and holidays.

Suggestion: Embrace good accounting software. We recommend QuickBooks Desktop. Do not let everyone in the books. Business Coaches and Tax Accountants need reports to help you.

Opinion: Let Them Look – Don't Touch and Don't Help. Their view is not the only view and usually tied to the software they use. In other words – they usually roll up the numbers. You want to be able to drill down (expand the numbers). Good Construction Accounting Setup provides reports for everyone.

Final thought: Limit Access to the checkbook.

It is harder for employee theft if outsiders can not see or touch the money.

If you're looking to hire a construction bookkeeper, this guide might be able to help you narrow down your options.

About The Author:

Sharie DeHart, QPA is the co-founder of Business Consulting And Accounting in Lynnwood, Washington. She is the leading expert in managing outsourced construction bookkeeping and accounting services companies and cash management accounting for small construction companies across the USA. She encourages Contractors and Construction Company Owners to stay current on their tax obligations and offers insights on how to manage the remaining cash flow to operate and grow their construction company sales and profits so they can put more money in the bank. Call 1-800-361-1770 or sharie@fasteasyaccounting.com