There comes a moment in almost every growing business when the conversation turns to hiring. Maybe you’re drowning in administrative tasks. Maybe you’re turning down work. Or maybe you’re feeling completely burnt out. It seems obvious to you—you just need another set of hands. Then, you think, everything would be ok.
The real question is—Can you truly afford that hire?
As a CFO, I’ve seen too many business owners say yes to a new hire too quickly—basing the decision on a gut feeling, a sense of overwhelm, or the belief that more hands automatically mean more growth. But hiring without a clear financial plan or an understanding of the return on investment can backfire fast. It can lead to a cash crunch, erode your margins, or stall the momentum you’ve worked so hard to build.
Don’t get me wrong. It’s not that you shouldn’t grow your team. The key is knowing when and how to do it in a way that supports long-term sustainability. Hiring should never be a reaction to burnout or chaos. Rather, it should be a strategic move rooted in data, aligned with your business goals, and backed by financial readiness.
To get to this point, the first course of action I always recommend is determining how much that new employee actually costs (note: it is not just their salary). Then, it’s about looking at the hiring decision just like I and other CFOs would do—through a financial lens—so you can grow confidently, not reactively.
The Cost of a Hire Is More Than Just a Paycheck
When evaluating a new hire, it’s important to consider the total cost of employment, which includes more than the salary or hourly wage. It also includes payroll taxes; benefits (health, retirement, bonuses, etc.); equipment, software, and training; and management time and overhead.
For example, let’s say you want to hire someone for an annual salary of $60,000. That employee will likely end up costing you between $80,000 and $90,000 per year. Here’s how:
- Base Salary: The employee’s agreed-upon annual pay.
- Cost: $60,000
- Payroll Taxes: Approximately 7.65%.
- $60,000 x 7.65%
- Cost: $4,590
- Benefits: Vary by company but commonly include:
- Health Insurance: Let’s say $400/month = $4,800/year
- Retirement Contributions: 3% match = $1,800
- Bonuses, PTO, Other Perks: Conservative estimate = $1,000–$2,000
- Total Cost: $7,600–$8,600
- Equipment, Software, and Training (laptop, licenses, CRM tools, onboarding materials)
- Computer and Setup: $1,500–$2,000
- Software licenses: $500–$1,000/year
- Training time or external courses: $500–$1,000
- Total Cost: $2,500–$4,000
- Management Time and Overhead: Even if not directly billed, your time (or your team’s) has value:
- Manager/owner training and oversight time could be worth thousands, especially in the first three to six months.
- General overhead (office space, utilities, admin support): $2,000–$5,000
So while you may be preparing to incur $60,000 per year, your real cost is closer to $80,000. That’s why it’s essential to ask—“Is this hire going to generate or save at least that much value within the next year?”
When thinking about that, you also want to take into account the ramp-up period. Consider that it typically takes three to six months for a new hire to be fully productive. If the employee is only operating at 50–75% capacity during this time, that’s partial ROI while still incurring full costs.
How a CFO Evaluates a Hire (and how you should too)
Before giving the green light to any new hire, here’s what I help business owners assess:
- What’s the ROI?
We look at what value the new hire will generate—either through revenue growth, cost savings, or freeing you up to focus on higher-value work. If we can’t project a positive return in a reasonable timeframe, it might not be the right move yet.
- What’s your current capacity?
Are you truly maxed out or is the current workload uneven or inefficient? Sometimes, we can make a few internal adjustments or systems improvements that will buy you time without adding headcount.
- What’s your cash flow projections?
Hiring commitments require consistent cash flow. We model worst-case and best-case scenarios to understand how long you can comfortably support the hire without putting stress on other areas of the business.
- Are you building the right team for the stage you’re in?
Hiring is about much more than filling any particular gap at any particular time. It’s about aligning with your long-term goals and building the right mix of skills, leadership, and culture.
The Bottom Line: Scaling Isn’t Just About Growing—It’s About Growing Well
Hiring is one of the most exciting moves a business can make. It’s a sign of growth and ambition. But it should always be paired with strategy. That’s where a CFO comes in—to help you approach hiring decisions with clarity and confidence, so every new team member is an asset, not a liability.
Let’s run the numbers before you expand your team. [Book a consult.]
About Agile Planners
At Agile Planners, we provide strategic guidance and outsourced CFO services to companies of all sizes. We can help provide the strategy your organization needs for the growth you want. We understand that no two organizations are the same. And with our experience and financial knowledge, we can help develop the right strategic plan for your business to grow and reach its goals. Simply, we’ll be your trusted partner, so you can focus on running your organization. Contact us today to learn more about how we can help.
