Project managers play a critical role in any business, though that role can be hard to define and easy to underestimate. Most companies wait too long to hire a project manager because it seems unnecessary—until they discover that it’s suddenly, painfully necessary. As a new or growing business, how can you avoid this mistake?
Knowing the when, why, and how to hire project managers requires vision, but there are some guideposts along the path to help you shape your vision and make the right choice when it comes to hiring.
What does a project manager do?
A project manager plans, organizes, and directs a project so that its completion is on time, under budget, and successful.
In a small operation, the project manager role can seem superfluous. Employees simply manage their own projects and have direct accountability for them. So then what’s the point of a project manager? A project manager’s job is to drive projects from start to finish, with specific focus on timelines and budgets. A project manager can work with multiple teams, across departments, and even with clients or users.
A project manager can help a growing organization free up more time for the executive team to focus on the big-picture and employees, instead of the daily (or hourly) problem solving that comes up with projects. At the same time, the project manager can handle logistics so that the involved employees can dedicate that time to the actual work.
There are a few different structures for project management, and they can make a difference in the way your organization is run. The style of management can be more effective in certain industries, with the particular size of the company, or just personality types. Years ago you might have project managers learning these frameworks on the job, but now many accredited programs are turning out graduates with project management degrees and training in one or more frameworks.
Agile is a modern approach to organizational management being rapidly embraced in all fields, especially technology and startups. It’s an umbrella term for prioritizing responsiveness to change, and encompasses many more targeted approaches to project management. Three of the most common PM structures are Agile, Scrum, and Kanban.
Types of project management structures
|Description||Scrum master assigns tasks to individuals that must be completed in a “sprint” or set timeframe||Tasks are listed in a visual repository to be flexibly assigned or “pulled” for continuous workflow||Mindset of responsiveness to change|
|Best features||Clarity, ownership, speed||Visibility, easily customized||Flexibility, responsiveness|
|Potential drawback||Delay or failure on one piece of the sprint can slow everything||Ambiguity, lack of ownership||Difficult to implement in entrenched business cultures|
|Best for||Stable teams without constant change||Multiple teams with varying priorities||Continuous change|
|Combination||Is an Agile framework, can use Kanban boards for visibility||Is an Agile framework, can be utilized with nearly any structure||Umbrella term for modern approach to organizational management|
The needs of your business will dictate the project management structures you choose to use, and you can look for project managers with those specific certifications or experience. Alternately, you can trust a skilled project manager to decide which structures to implement in your company.
Why should you hire a project manager?
Hiring a project manager is critical, but only you know what they’ll be able to do for your company. The role is usually very fluid and depends on need. You’ll want to consider the stage and needs of your company before you begin looking for a project manager, but there are multiple universal benefits to hiring a PM. Here are a few of the roles a project manager can play:
- Monitor a budget and come in under estimates
- Help founders transition to big-picture focus
- Take management off executive team’s plate
- Remove administrative tasks from employee workload
- Facilitate teamwork between multiple departments
- Communicate clearly top-down and bottom-up
- Manage client expectations
- Keep projects within scope and on target
- Manage timelines, hours, and deadlines
- Maximize efficiency
- Minimize cost
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What departments benefit from hiring a PM?
Nearly every department needs project management to some degree. As your size and projects scale you’ll need management to match. Some departments in particular can benefit from project management. As a rule of thumb, the more specialized the skill set, the greater the need for more specialized project management.
Construction requires careful project management to balance the complex components of a build. Multiple contractors, multiple teams, and projects that require coordination and synergy can create the perfect storm of inefficiency, lack of accountability, extended timelines, and blown budgets. A good construction project manager will handle scheduling, communication, timelines, navigating any hiccups, and keeping everything within budget.
IT and development
Information systems can create a unique problem for managers, since the technology and jargon is more localized and there are barriers of entry to understanding. Hiring an IT-specific project manager can bridge the gap between executives and engineers, advocating for the IT employees and needs while directing the work of IT to meet executive vision.
When to hire a project manager
Hire a project manager before your team passes 10 employees. Even if they aren’t fully utilized, a project manager can immediately start building value and prepare you for growth.
Typically companies start looking for project managers when they’re already hurting for one—between 10 and 20 employees, or when they start to retain clients or land bigger customers. Unfortunately, these companies have been suffering inefficiencies and overwork for longer than necessary.
Hiring a project manager before you feel you need one may seem risky or expensive, but in reality it helps you start integrating a project manager early enough that everyone will be ready for the jump to the next level when it comes. Read more here to identify which stage your company is in and when to use project managers.
How much does it cost to hire a project manager?
Most companies hire in-house project managers on a salary model. According to national data, Glassdoor reports an average salary for project managers to be around $66k per year. Some companies may also feature bonuses for project managers who come in under budget, or a profit-sharing arrangement for revenue-generating projects. However, there are many other models for paying project managers that you can consider based on need and budget.
- Flat-rate: A set price based on satisfactory completion of the project, regardless of hours spent.
- Percentage: A 5% fee is common for projects under $500,000, 3.5% for larger projects.
- Hourly: Hourly rates for PMs range from $45-60/hour, depending on experience.
- Salary: PM salaries range from $45-110k per year.
Freelance PM vs. In-House PM
It’s not always feasible or in your best interests to hire an in-house dedicated project manager. Even part-time, a project manager can be a costly hire. Overall it’s considered well worth the price to get a skilled project manager, since it leads to reduced costs and increased quality and revenue. But if you’re not sure you need a project manager, don’t know how to use one, or don’t have the necessary budget for an in-house PM, you can opt for a freelance project manager.
Pros and cons of freelance project management
|Cost is generally lower||Internal projects difficult or impossible|
|Flexibility||Asynchronous work & communication|
|Stays above politics & culture||Lacks long term vision & investment|
|Easy to hire & fire|
Another option is to enlist the services of an agency. Agencies are able to provide outside perspective and authority, but can be problematic in terms of investment, understanding, communication, and motivation. Remote work is increasingly utilized today, so both agency and freelance project management are available to most industries.
How to hire a project manager
The right project manager can change the entire trajectory of your company, so take your time to get this hire right. Follow these steps to increase the chances that you’ll find the best project manager for your situation.
- Consider needs: What are problems that need solving? Does this role need to interface with different teams? Is it a client-facing role? Do you need a specialized set of skills or a jack-of-all-trades? Solidify your job descriptions before opening the search. Remember that with project management their experience should be more heavily weighted than any training or certification.
- Post clear job description: Include as much information about the role as you can, including ideal education and certifications. It’s smart to communicate general payment expectations in the job description or early in the hiring process to avoid wasting time.
- Phone screen: Beginning with an initial phone call to screen for communication and social skills is typical for any hiring process. Ask questions about their management style and their most/least favorite parts of the job.
- Interview: For the interview you want to gauge the style and chemistry of the applicant. Provide potential projects with budgets and ask for a demonstration of their management process.
- Wait for follow up: An important part of the project management is the ability to pursue a goal through completion, following up with important tasks. Wait to see which candidates follow up, and how they follow up. This is a good indication of their thoroughness and dedication as a manager.
Invest in a good project manager who can solve problems and create opportunities for your business to grow, whatever role might look like for your one-of-a-kind company.