Hiring Your First Employee

Starting a business is one thing, but running it is something else altogether. This is especially true if you’re a one-person operation where you’re in charge of pretty much everything. Most entrepreneurs enjoy the freedom that comes along with calling the shots, but if you plan to grow your business in the future, you’re more than likely going to need to hire an employee at some point.

This can sometimes be a strange concept if you’ve come from the corporate world of working for someone else. Suddenly, you come to realize that you are the one doing the hiring, and beyond that, you are the one responsible for all of the things that come along with bringing an employee onboard.

Paychecks? Yup, you’re now responsible for writing them. Benefits? You’re now in charge of figuring out what you can or should offer. Tax withholdings, worker’s comp insurance and other payroll deductions? That’s on you too.

Although there’s a lot that goes into hiring your first employee, it’s also a time to celebrate. Not only have you come far enough in your professional career that you’re now hiring someone else, but hiring your first employee also means the potential to grow your business and see greater earnings and success. In a nutshell, hiring your first employee is one of the key moments in a business’ timeline that signifies a step toward the big leagues.

Because there’s so much to think about when considering hiring your first employee, below are some tips to help you out. These tips apply to virtually anyone in any type of industry, but you may need to tweak them a little bit to fit your specific situation:

The first step in the hiring process is, well, finding applicants. It used to be that you could post an ad in the newspaper classifieds or put a “now hiring” sign in the front window of your place of business to attract candidates, but these days, the Internet is the go-to recruiting tool.

Some entrepreneurs find success in hiring qualified candidates using job board sites, but be warned: these sites could see you spending more time sifting through resumes than speaking with qualified applicants. The reason for this is that job board sites see millions of visitors each month, meaning the odds of your opening receiving traffic are good, but you may also receive applications to sort through from plenty of unqualified individuals.

If you choose to use job board sites, make sure your job postings are accurate and honest. If your job opening has a lot of technical requirements attached to it, include them, but just remember that being too demanding can put off potential hires who might be right for the position but who do not meet your exacting standards.

Another avenue to pursue when seeking your first employee is to use a recruiter or recruiting agency. These are resources that usually have networked connections with job seekers, and they can often match your position with the right person. One benefit of using recruiters over job board sites is that recruiters typically connect employers with candidates in the local area. A job board site may find qualified candidates, but the candidates may be on the other side of the world.

If you choose to do your own recruitment and hiring, you’re encouraged to screen candidates thoroughly, yet fairly. An interview is a great way to meet candidates and get to know them, but this shouldn’t be the only determining factor. You want to find someone who will work well within your company and who shares your future goals, but they also must posses the skills and mindset to get things done right in addition to having the right personality. This can be a difficult mixture to find at times, and this is why interviewing multiple candidates is often the best approach.

Ok, so you know all about your options and you’ve chosen to do your own hiring. Great! Now the bad news – hiring the wrong person, or more specifically, hiring in the wrong way, can land you and your business in hot water.

As an example, did you know that there are some questions you aren’t allowed to ask during an interview? Asking about someone’s age, sexual orientation, religious beliefs and other things protected by the 1964 Civil Rights Act can place you and your business in the crosshairs of the law.

Also, if you haven’t run a background check or drug screening on a new hire and they end up causing property damage or injuries to others on the clock, you may be liable. The case can be made that, through negligence in hiring practices, your business is responsible for the actions of an employee who causes injuries under the influence of a drug or who has a criminal background.

This is also where checking references comes in handy. A reference is basically someone who will vouch for the candidate. You have to decide how far you want to dig into a reference, but it’s a good idea to at least check with any references that a candidate lists.

Once you’ve made up your mind and decided on a candidate, and after you’ve done your research and ensured that the candidate isn’t a liability, now it’s time to talk money. You (ostensibly) have it, the new hire wants it. Seems simple, right?

Well, think back to any time in your life where you’ve interviewed for a job and the topic of money has come up. How did you feel? That’s probably how the candidate feels right about now.

The thing with paying someone to work for you is that simplicity and honesty are always the best policies. If you have to come up with a convoluted payment scheme that involves different pay based on different jobs on different days and so on, you may want to revise things. Be honest with yourself first regarding what you can afford to pay. Take a look at the average earnings for the same job in your area. Then consider what’s fair to you, fair to the company and fair to the employee.

When approaching the issue of how much an employee will get paid, some experts recommend being upfront and simply telling the candidate how much the job pays. Others recommend asking the candidate about their salary expectations to ensure they align with yours. In either case, the goal is not to trick candidates into low-balling themselves, but instead, the goal is to provide a work environment in which your employee feels valued and fairly compensated.

When issuing payment, you’re now the one writing the checks, so having your payroll handled is vital to your success. If an employee isn’t getting paid, they aren’t going to work and you won’t have the extra help to run the business. Of course, you could also get sued and potentially face fines and fees from local, state and federal governmental entities.

For these reasons, you might consider working with a business accountant to handle your company’s finances. Additionally, outsourced payroll services exist to handle everything from tax deductions to issuing actual payments.

Although there’s a lot to think about when hiring your first employee, remember that you aren’t alone, nor are you the first person to face these challenges. There are plenty of business mentors out there who can help, and business consultants can also be a resource to turn to for advice and guidance when navigating tricky issues like hiring your first employee.