Small Business Hiring: How to Hire Your First Employee 13 Sep 2018


Hiring your first employee is exciting! It means you’re growing and ready for the next stage of your company. That doesn’t mean that there’s no stress involved. After all, finding and hiring the right person for the job can be a lot of work. But, it’s worth it.

The right employee can add more value to your business than you might expect. A study by Expert Market found that of the top ten highest grossing companies, each employee made for them on average $5,820,371 in a year. While your new hire won’t make you that much money, a good employee is worth their weight in gold and can help your business keep growing.

With this in mind, it’s crucial that your first hire be a good fit for your business needs. In this article, we’ll look at what to do before you hire your first employee, during the hiring process, and after you officially hire them.

What to Know Before You Hire

Before starting the process you need to think long and hard about whether you actually need to hire someone. Hiring an employee too early will drain your resources without providing the necessary value, so you need to be sure you truly need them. On the other hand, putting off a necessary hire may hinder your businesses’ growth, and leave you with a workload you can’t handle.

To decide if you need a new employee, start by analyzing your current workload and how you’re handling it. Here are a few signs that you’re ready to hire to hire someone:

  • Your workload is too much for one person to handle and important work is suffering as a result.
  • You’re receiving complaints from clients about how long it takes to complete a project.
  • As the owner, you’re too involved in the day-to-day operations, which prevents you from focusing on growing your business (for example, you may be neglecting networking and sales).
  • You have to turn down new projects because you’re too busy.
  • You don’t have time to test new services or products that you’ve discovered.

If you’re already dealing with one or more of these situations, then that’s a good thing. It means your business is growing and it’s time to bring on employees.

What Does Your Business Need?

Calculating the cost of a new employee

Once you’re sure you need to hire someone, you now have to decide what you can afford. Determining your budget for payroll will help you decide on a lot of important issues. For example, choosing the experience level of your potential hire or the schedule they’ll work. You may want to hire someone full-time, but if you can only afford to pay them part-time, you’ll need to adjust the job hours.

There are other options if part-time or full-time job positions don’t work for what your business needs. You can hire an employee on a temporary basis if your workload is heavy right now, but will soon taper off. You can also hire a contractor if your workload is sporadic or if you want to see the quality of their work before you commit to hiring them. Note that these options may require to pay more per hour than you’d pay a regular employee.

After you’ve chosen the salary, schedule, and employee type (permanent, temporary, or contractor), you can then determine what kind of skills, education, or experience the job needs. With this job description in hand, you can start comparing what you’re looking for with what the market has to offer.

Start by looking at the average pay for the position you want to hire for. Use sites like Glassdoor, Payscale, and Indeed to see which salaries are common for your industry and geographic location. If you find that you can’t match the average salary, then you may have to make up the difference with benefits. Those benefits could include a flexible work schedule, opportunities for growth, or even stock in the company.

Put It on Paper

Now that you know more about what kind of help you need, it’s time to get it down on paper. You’ll need to create two listings for the job, one for internal use and one for advertising the position. Making two listing lets you have two different viewpoints of the job, one focused on what your business needs from the job and one that’s focused on what job applicants can get out of the job.

Creating a job description for internal use lets you keep the job responsibilities clear in mind. The job description should include what the job duties are, what experience or education is needed, what qualities a person needs for the job, and what qualities they need to fit in with the company culture. This will help you create the right interview questions, correctly evaluate talent, and figure out where you should publish your public listing.

After you figure out what the job entails, you need to create a public listing to attract applicants. This can include all the information in the job description, but you’ll want to add the salary and benefits that come with the job. You can also add your company’s values, culture, and goals to help applicants understand if they’ll fit in. Finally, tell them how they can apply for the job, and important information they should include like examples of work, resume, etc.

Getting the Message Out There

Leverage your network to find a more suitable job candidate

There are multiple ways to find suitable job applicants. One of them is by leveraging your network. Asking your business contacts or your business mentor if they know anyone who may be interested in the job can give you access to a larger pool of talent.

Another way to get your job listing in front of qualified applicants is to post the listing on job sites, social media, and trade sites that deal with your industry. For example, if you’re in the trades, you can post your job listings to sites like WorkHands so you can advertise the job to qualified people.

If you don’t have a lot of time and you’re willing to pay someone, you may want to invest in a job recruiter to find candidates for you. They can find and select a short list of people that you can interview yourself. When hiring a recruiter, it’s important to find one that specializes in your industry or in the type of job that you’re hiring for.

Interviewing Doesn’t Have to Be Nerve-racking

Now that you have a good selection of candidates to choose from, it’s time to start sorting through them. Use the internal job description you made earlier to narrow the candidates down before interviewing. Once you’ve narrowed down the applicants, it’s time to set up some interviews. Following some simple guidelines can help you take the stress out of interviewing candidates.

Start by setting up a standard interview process you can use for all candidates. This can be as easy as making a list of questions and setting a time limit for each interview. Having a standard that you follow for interviews helps you fairly evaluate each applicant and keeps you organized.

When creating interview questions, you may find it useful to divide the questions into two groups. This lets you focus on the two areas that will determine if a job applicant is the right person for the job.

  1. The first group can be focused on the applicant’s qualifications, skills, and experience.
  2. The second group can center around the applicant’s values, goals, and how they would fit in with the company’s mission.

Keep in mind that the Equal Employment Opportunity Commission prohibits questions or discrimination based on race, social class, gender, sexual orientation, religion, family status or pregnancy, political views, or disability.

After spending all this time crafting the right questions, make sure you listen to the applicant’s answers. You may have to explain some things at the beginning of the interview or answer questions the job candidates have, but otherwise, you should let them talk so that you can see whether they’ll be a good fit at the company.

Once you find a promising candidate, you’ll need to check your applicant’s references. When you’re checking references, prepare your questions ahead of time to keep things running smoothly. Finally, make sure to explain why you’re calling and ask if they have time to talk to you.

It’s Time to Hire

Now that you’ve gotten through interviewing and checking references, you’ve likely made a decision about who you want to hire. It’s time to extend a job offer. First, call or email the applicant and let them know they got the job. After that, you’ll need to send them a job offer letter.

Job offer letters explain the specifics of the job and what’s expected of both parties. They typically include the job title, duties, start date, and if this is a part-time or full-time position. When writing an offer letter, you need to see what your state requirements for job offer letters are and conform to them. You can find this information on your state’s department of labor website.

Job offer letters should also have the salary and benefits listed, and outline conditions for employment, such as passing a drug test and a background check. Finally, they should include an “at will” clause. An “at will” clause prevents the letter from becoming a contract and allows you to fire the employee for any reason and allows your employee to quit if they want to.

The Basics of Background Checks

Now that you’ve made a job offer, you can run a background check on the applicant. Many companies run background checks to make sure new hires are safe and have the education or experience they say they do, but some companies have gotten in trouble because they didn’t follow the strict laws regarding background checks. How can you run a background check legally?

The first step is telling the applicant that you will be running a background check on them. Then you need to have them sign a separate consent form for the background check. The company you use to run the background check should understand what the law requires and the reports that are most important for your business needs.

If you decide not to hire an applicant based on their background check report, then you need to give the applicant a copy of the findings. This gives them the opportunity to dispute faulty information and defend themselves against any incriminating findings. Finally, if any concerns are brought up by the background check, make sure any information that affects your decision can legally be used in the decision making. And should you decide to rescind the offer based on the background check, be sure to follow proper pre-adverse action protocols as required by federal, state and/or local laws.

You’ve Hired Someone, Now What?

Now that you’ve hired someone, you’ll need to take a few more steps to legally hire the employee. For example:

Training Pays Off

Training can increase income per employee by 218%

Now that you’ve set up the legal side of things, it’s time to figure out what training your new employee will need. Investing in training is a great way to boost your company’s revenue. The American Society for Training and Development found that companies that have comprehensive training have a 218% higher income per employee as compared to companies that don’t have comprehensive training.

One way to figure out how much training your employee needs is to see if they’ve done the same tasks they need to do for the job or if they’ve used the same system for doing tasks. If they haven’t, this may be the starting point for their training.

If you’ve decided that your new employee needs training, you now need to decide who will train them. Do you have the time to train your new hire or do you need to outsource it to a class? You can also have your employee shadow you as training.

There’s more to teach a new employee than just different work duties or systems. You also have to educate them on your company’s culture. Creating a handbook that explains your company’s views on things like taking risks vs. following the rules can help your employee learn how to fit in. You should also talk about your company’s culture openly and be open to answering questions. Above all, strive to have a company culture that encourages people to stay. This will keep your employees happy and keep your employee turnover low.

Hiring Employees Is Just the Beginning

In this article, we’ve learned what to do before hiring such as deciding what you can pay a new hire, creating a job description, promoting the job, and the basics of interviewing. We’ve also learned how to write job offer letters, run background checks, and set up new employees for success. But as we mentioned, hiring an employee is just the beginning.

If you want to streamline your hiring process while staying legally complaint, download Trusted Employees’ free ebook Supercharge Your Hiring Process. Jumpstart your hiring process by downloading it today.