Managing an SEO agency involves juggling multiple responsibilities, among which making the crucial decision of when to hire your next employee is one of the most significant. Adding another member to your team is not merely about filling a vacant seat. Instead, it’s about foreseeing the future needs of your agency and clients, weighing the costs, and capitalizing on the right moment to maximize growth and efficiency.
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Here, I will draw upon my industry experience to provide you with key indicators and practical strategies to make this crucial decision.
Fulfilling the Demand for Specialty Services
The SEO landscape is continually evolving, with client needs diversifying to include various areas of expertise such as local SEO, technical SEO, e-commerce SEO, and content optimization. When a client requests a specialized service you cannot provide, you risk losing the deal – and potentially, the client.
Here’s where strategic hiring comes into play. It is not about impulsively expanding your team but rather evaluating your agency’s in-house capabilities and determining the right areas for expansion.
For example, if your clients are increasingly requesting for local SEO expertise that your agency lacks, consider hiring a specialist in this area.
As you evaluate your hiring needs, pose these critical questions:
- What specialties are crucial for retaining your current clients and generating new business?
- Can shared services or agency partnerships, and networks be tapped into to fulfill certain needs?
- Do the new specialties align with your overarching business strategy and brand identity?
For small agencies, meeting these needs may be as simple as hiring one or two new employees, while for mid-sized or larger agencies, acquiring a smaller agency with the needed specialties can be an effective strategy.
Balancing the Business Pipeline with Employee Capacity
It’s a well-known adage that you must not bite off more than you can chew. If your agency has a robust new business pipeline but insufficient employee capacity, it’s a clear sign it’s time to expand your team. Yet, simply adding more employees is not the solution. Instead, consider the following practical strategies:
- Utilize technology. Project management tools and employee resource platforms offer real-time data on your team’s capacity, helping you forecast future needs and determine the optimal workforce size.
- Monitor ongoing projects. Regularly evaluate your team’s capacity against upcoming projects and adjust your workforce accordingly.
- Prioritize. Sometimes, it’s more strategic to focus on key projects and clients rather than overstretching your team across too many tasks.
Examining Profit Margins and Operational Costs
Profitability is at the heart of every business decision, and hiring is no exception. If your agency’s profit margins are low due to excessive operational costs, it’s time to reevaluate your hiring strategy.
Keep in mind that a high-performing agency maintains a balance between costs and profits. Total labor costs should not exceed 50% of net revenues, and operating expenses should be limited to around 25%.
One common pitfall to avoid is overservicing, which leads to a distortion in the actual cost of your services and inhibits your revenue maximization potential.
For example, if a senior SEO specialist is routinely performing tasks that could be efficiently handled by a junior-level executive, it might be beneficial to bring in junior-level talent to relieve the senior expert for more complex tasks.
Acquiring Transformative Talent
Breaking into new markets often necessitates a strategic hire – a “rainmaker” who brings in significant business and impacts the agency’s growth trajectory. Despite the costs and potential cultural adjustment, the long-term benefits can be substantial.
For instance, hiring an SEO expert who has previously worked with Fortune 500 companies can open doors to larger clients and contracts. However, ensure that you provide strong incentives, such as profit sharing or restricted stock options, to retain and motivate this key hire.
Hoping to Generate More Revenue – A Cautionary Note
Basing hiring decisions on mere hope or desire for more revenue can be catastrophic. Hiring must be driven by strategic considerations and tangible metrics, such as employee utilization, revenue-per-employee, and new business close rates.
Ultimately, successful hiring is about striking a balance between current capacity, future needs, and strategic growth goals. As you navigate the complexities of expanding your SEO agency, keep these key considerations in mind.