It’s awesome to see people creating and growing businesses, particularly when you get to watch them hit certain milestones. Hiring your first employee is one of those milestones. Congratulations!
Whether you’re trying to explode with an innovative tech startup, take your freelancing business to the next level, or anything in between, you’re eventually going to have to hire someone to keep growing.
Don’t worry, it’s not that arduous of a process. Just follow these five simple steps to hiring your first employee!
1. Determine what kind of hire you need.
Do you need a part-time employee, someone to work with you full-time, or someone to whom you can contract out projects and assignments as needed? Maybe you already know the answer. If you’re not sure, answer these three questions first.
How much work is there?
How much work would you be able to give them right now? Another way to phrase this is: How much would you be able to take off your plate, so that you can focus on work only you can do?
How much work will there be?
How much does your new hire need to grow with you? Are you trying to scale? Is the work you’re hiring your first employee to do something you have little-to-no experience in? How important will this person be to you?
How will this affect you financially?
How will choosing a part-time employee, full-time employee, or contract worker affect your finances, tax planning, etc.? Regulations differ between employees and contractors, with an easy differentiator being whether or not you control their schedule.
It will be best for you to review the IRS’s comparison of independent contractors and employees to better understand the best choice for your situation.
Once you’re able to take a firm stand on which kind of hire you need, then you get to do the most fun job of all!
2. Take care of the paperwork.
Some of this you’ll need to do before you hire, and some of it after. Paperwork is generally everyone’s worst nightmare, but if you take it one step at a time, it doesn’t have to be that bad.
If you’re hiring an independent contractor, things are rather simple. You’ll only need to worry about three forms.
- Independent Contractor Agreement: This is a form that lays out your professional relationship, ownership of work, and other legal jargon.
- Form W-9: This is a request for the contractor’s tax ID (or SSN), which is crucial for everyone’s records and payments.
- Form 1099-Misc.: If you’re going to pay your independent contractor more than $600/yr (likely), then you’ll need to submit this for your end of year tax filings.
If you go on to hire an actual employee, everything changes. It’s not more difficult, per se, but you certainly have more responsibility. Here’s what you’ll need to do.
- Get an EIN (Employer Identification Number) from the IRS
- Create records for withholding employee taxes
- Verify your employee’s eligibility to work in the U.S.
- Report that you’ve hired an employee to your state
- Get workers’ compensation insurance (requirements vary by state)
- Post certain required notices/posters in your office that explain relevant laws
For more information on each of these steps, and a complete guide on how to file your business taxes, click here.
Hiring an independent contractor is probably looking good right about now, but that’s not always the best fit. Before making any assumptions, be sure to review point #1 and the linked guides.
3. Create a job posting.
How should you approach your job posting?
First things first, you and any partners you have need to know what you’re looking for. If you’re not entirely sure, or if your group can’t come to an agreement, try answering these questions.
- What’s currently your biggest pain point? What could be done to alleviate that pain point?
- What will be your biggest pain point in six months? What will you need to do to alleviate that pain point?
- Would you need your hire to more frequently follow a list of instructions, or have autonomy in their work?
- Will their duties be more task-oriented, creative, project-oriented, or strategic?
- What interaction will your hire have with you and/or any partners you have?
Once you’ve answered these questions, then you’re ready to craft a job description. Your job description should include:
- A description of your company
- A description of your ideal candidate
- Key or primary duties
- Less frequent responsibilities
- Targeted compensation range and any benefits
How should you present your opportunity?
You might hear recommendations to focus on keywords, which many interpret to mean “use a lot of buzzwords.” Don’t do that. Instead, focus on accurately representing your company.
If you’re a trendy creative agency run by a few twenty-somethings, mirror your job description to that personality. If you’re a private practice lawyer looking for a secretary, act like it.
The degree to which you should be professional or casual in a job description depends on the degree to which you are professional or casual in your work.
Now you need to post that job description. Uploading it to Proven will automatically post it to all the major job boards, like Monster, Indeed, and 100+ others. Then you’ll get any responses aggregated through Proven instead of having to go to every individual job posting site.
It’s also a best practice to share your job posting across Facebook, LinkedIn and other social networking sites. After all, you’ll probably trust a friendly referral over a stranger’s application.
4. Conduct the right interviews.
Once you start talking to candidates who meet your criteria, I’ll trust that you know enough about your business and the personalities involved to make the right choice. But here are a few tips for what might be your first time interviewing people.
Don’t talk about these things.
There are a handful of questions you need to stay away from for legal reasons, like those relating to age, marital status, arrests, sexual orientation, mental health, religion, and race.
Basically, stay away from everything people would recommend avoiding during a dinner conversation.
If you get into these topics and choose not to hire that candidate, you could be on the chopping block for discrimination. No one wants that.
For a full breakdown, refer to the Equal Employment Opportunity Commission.
Make sure you and your candidate are in the same ballpark regarding compensation. If those expectations are not met first, everything else is liable to fall apart.
That’s why it’s important to have this information in your job posting, and why you should confirm you’re on the same page early on.
Ask either of these two questions.
What would be your ideal situation? Or, what are you looking for in your next step?
Either of these questions should help you to flush out whether your candidate is spewing whatever they think you want to hear to get the job, or if the two of you would actually be a good fit.
A good follow up question could be: What would be a deal breaker for you?
On one hand, you can see if there’s going to be tension with this hire in the role you need. On the other hand, you get to see if they actually know what they want.
5. Take your pick.
If you’re following these simple steps to hiring your first employee, then you have so far decided what’s best for you, completed the appropriate paperwork, put the word out about your opportunity, and spoken with several candidates.
Now all you have to do is actually hire someone! (And finish the appropriate paperwork; see point #2.)
Running a business is a difficult process, and finding the right personnel can be a big stressor. How do you find the right people? How do you make sure your own tail is safe come tax season? But this doesn’t have to be that stressful. Just follow these simple steps to hiring your first employee, and you’ll be good to go!