Companies grow through processes, not just new hires. When to hire and when to improve a process

In a ten-person company, everyone knows what everyone else is doing. Information is passed on at the desk, and decisions are made quickly. As the company grows, the same information has to reach more and more people, often through several intermediaries.

Frederick Brooks described this back in 1975 in his book on managing software projects. The number of possible pairs of people who need to communicate grows much faster than the number of employees. The table below shows what this looks like in figures.

Of course, not everyone talks to everyone. But the formula shows the direction well: with a team five times larger, the number of possible communication channels grows more than 27-fold. Each of them is a place where someone may not get information in time.

That is why, in a growing company, more and more time goes on coordination: status meetings, “who has this?” questions, fixing mistakes when a case is handed over. A new person increases the team’s capacity, but also increases the need for coordination.

There is no single headcount at which the traditional model stops working. In one company, problems start at a few dozen people; in another, well-organised one, only at several hundred. Rather than looking for a threshold, it is better to watch for signals.

If you recognise three or more of the signals below in your company, more hires will probably not solve the problem – they will make it bigger.

Growing through processes means handling more orders, customers and documents with the same team, because systems do the repetitive part of the work. People deal with what a system cannot do well: judgement, negotiation, unusual cases.

It most often starts with the four areas listed below. In each of them you can point to tasks that take up people’s time today, even though they do not need their knowledge.

They all have one thing in common: data is entered once and then flows on by itself. Only on such a foundation can AI help, e.g. by preparing draft replies or summarising documents.

Comparing “salary versus system price” is misleading. The full cost of an employee includes employer contributions, equipment, licences, a workspace, recruitment, and the months in which the new person is learning the process. Part of that time is also taken from experienced colleagues.

Employer contributions and fund payments alone come to about 20.5% of gross salary. With a gross salary of PLN 8,000, that gives about PLN 9,640 a month, or about PLN 115,700 a year, before workstation costs.

On the process side, you count one-off costs (analysis, configuration, connecting systems, training) and annual costs (licences, maintenance, the time of the person who makes sure it works). It is worth setting the two side by side over three years. A job costs the same or more every year, while a process improvement costs the most at the start.

What does not appear in the cost table also counts. A new person may leave after a year, and their knowledge will leave with them. A documented and automated process stays in the company, but it needs looking after and adjusting when systems change.

Take a hypothetical distribution company. Its order-processing department has six people and handles 1,200 orders a month. One order takes 40 minutes on average, including 15 minutes of re-keying data from an email into the ERP and checking it.

Today that is 1,200 × 40 minutes = 800 hours of work a month. The management board is planning 30% sales growth, i.e. to 1,560 orders. With the current way of working, that means 1,040 hours – 240 hours more.

If we assume that one employee has about 130 hours of productive work a month, the company is almost two full-time staff short. In the traditional model, the company hires two people and, using the calculation from the previous section, pays about PLN 19,300 a month for them.

Option two: orders come in through a form or in a file from the customer and go into the ERP automatically. The employee only checks unusual items, so re-keying drops from 15 to 3 minutes. Then 1,560 orders × 28 minutes = 728 hours, which is less than the team handles today.

This is an example, not a promise. The actual effect depends on how many orders arrive in a non-standard form. So before you decide, measure handling time on a few dozen real orders.

The decision is rarely black and white. Most growing companies hire anyway – just in different places than before. The table below helps match typical situations to the right response.

A good rule: automate where people are only passing data along. Hire where they bring judgement, relationships or expert knowledge.

The questions below take a quarter of an hour at a board meeting. They often show that a request for a new position is really a request to fix a process.

If recruitment still makes sense after these questions, go ahead. The new person will then join a better-documented process and become self-sufficient faster.

The first mistake is the order: “we will hire first and get organised later”. After recruitment, getting organised is harder, because more people have their own habits, and urgent matters always win over important ones.

The second mistake is handing the topic to a single “process person” without the management board’s involvement. Such a person can describe a process, but cannot change the approval rules or settle a dispute between departments. Without decisions from management, the project ends with documentation.

The third mistake is doing everything at once: several systems, several departments and many connections in one project. It is safer to start with one process, measure the effect after a few months and only then take on the next one.

Growth through processes is not the answer to every problem. In a small company where a given process happens a few times a week, automation will not pay for itself. A good template and a short instruction are a better option then.

Nor will it work where everyone does the same thing differently. Automating a chaotic process only speeds up the chaos, so you first need to agree on one way of working.

Finally, if growth comes from an entirely new line of business, e.g. opening a branch abroad, you need people. Processes will help them get started faster, but will not replace them.