Human Resources

How to Get the Most Out Of Your People

Joe Collins, CPA, CA
July 22, 2021

Affiliate disclosure

Whether it’s your first, your second, or your twentieth hire, bringing in the right people and helping them achieve their highest potential takes careful consideration. Here’s how to ensure you are creating an environment that helps your employees thrive.

Seeing your business begin to grow is an exciting time for any owner. Your customer pool is expanding, your profit numbers are going up, and you’re beginning to wonder if it’s time to hire some new employees. Whether it’s your first, your second, or your twentieth hire, bringing in the right people and helping them achieve their highest potential takes careful consideration.

A successful new hire will increase your profitability

From your head of sales to your administrative staff and every other role in the business, each of your employees will be adding to something called your Labor Productivity. This is the amount of economic output per labor hour you produce, which is a confusing way of saying how much work you’re getting done.

A new hire can increase your Labour Productivity by doing valuable work themselves OR by freeing up you and your other employees to do more billable work. When it comes to deciding which roles take priority in the hiring process, we recommend breaking it down like this:

  1. Think of all the roles that will exist in your business a few years from now and put them in a chart
  2. Fill in your name for all the roles you are currently doing
  3. Rank order the roles you want to hire for (one method is to list out the pay rates for these positions and hire the lowest pay rate first).
  4. Write procedures for that lower-impact role, so someone can come in and do a quality job.

By following these steps, you’ll have a better understanding of which roles would be most valuable to fill and the impact to your Labour Productivity they’ll provide.

A happy workforce is a more productive workforce

You want to curate a positive environment in your business because you genuinely care about your employees and their well being. This is amazing, but did you know there are also tangible benefits to building a culture of care?

A culture of care is exactly what it sounds like: caring for your employees is a priority, and it’s built into everything you do. Working to keep your employees happy doesn’t just increase talent retention and reduce the cost of onboarding new hires (did you know replacing an employee can cost anywhere from 90% to 200% of their annual salary?); it also increases the productivity of your business.

When you care about your staff, they’ll care about your business. They’ll buy into the product or service they’re helping deliver, and understand why it’s important. Your onboarding procedures will teach them how to do their job, but your culture will make them want to do it, and do it exceptionally well.

Know the difference between an employee and a contractor to make the best decisions for your business

New business owners are often curious about the benefits of hiring contractors to do hourly work. You’re avoiding the costs of payroll tax and a regular salary, but what are you risking?

Contractors often charge more per hour than a salaried employee, so they might not be cheaper in the long run. In addition to this, miscategorizing employees as independent contractors is a big deal to the CRA. Even if it’s unintentional, you could face fines and penalties that end up destroying your business.

A full-time, salaried employee does entail a 7.66.5% payroll tax. But taxes, and payroll, are simply a reality of running a small business. Plus, a full-time employee embedded in the culture of care you’ve created could be more committed and thorough with the work they do for you.

An accountant, with a deep understanding of your business goals and a full picture of your finances, can help you decide between a contractor or an employee and ensure you’re categorizing everything correctly for the CRA. If you’d like more guidance on getting the most from your people plus four more essentials every business owner can master, download our free Financial Foundations guide here.

Work With Avalon

Our goal is to help small businesses thrive, and we want to help as many businesses as we can.

Here are a few ways that we can help ⬇️

🤝Hire Avalon
We offer full-service bookkeeping and accounting services for small businesses in Canada.

We start by helping incorporated businesses navigate the maze that is tax compliance in Canada. We provide clarity on your business' financial performance so you can make informed decisions with the guidance of our expert team.

If you're interested in hiring Avalon, check out our Services Page or get an idea of the Service Packages that we offer.

🏫Learn New Skills
For those wanting to learn the skills needed take on your own bookkeeping and accounting, we offer online courses.

We've taken our years of experience working with hundreds of small business owners and distilled them down into practical online lessons.

Check out our Business Courses page to take your skills to the next level.

📖Share Our Knowledge
We know that being a small business owner is challenging.  There are so many hurdles to overcome and questions to answer when running a business.

We aim to help as many business owners as possible to overcome those hurdles and answer those questions by sharing our knowledge.

Check out our Blog, YouTube Channel and Downloadable Guides that have helped thousands of people get answers to their questions.  

You can also sign up to our Weekly Newsletter to get tips from Joe on building a successful business.

We speak in plain language and put out the most useful content that we can.

Thanks for reading!
Article by
Joe Collins, CPA, CA
Originally published
July 22, 2021
If you enjoyed this article, please consider sharing!

Let's Get Started

Use the form below and we'll respond within two business days

How can we help?
Is your business incorporated?
What's your  annual revenue?
Tell us about the services you require or advice you need

Want to hear more business tips?

Sign up to our newsletter to get tax and business tips from Joe as well as his expert insight into running a successful business.