Hiring Your First Employee

If, despite the challenging economic environment, your business is thriving and, as a result, you are considering hiring your first employee, do your homework first. The proper research will help you make the hiring process go more smoothly both for you and for your new colleague.

Identify Your Needs

If you are feeling overwhelmed with business responsibilities, it may seem obvious to you that you need to hire your first employee. But before you do anything else, take the time to define what your needs are. Is your business seasonal with peaks and valleys in demand? Is it project driven? Is the monthly work flow heavy early or late in the month and lighter in between? Or is your business relatively steady throughout the year? The answers to these questions will help you decide whether you should hire a year-round employee, an independent contractor, or a temporary employee provided by an agency. They also will help you decide how many hours you will need an employee each week.

Define the Job

While identifying your needs is somewhat general, defining your first employee's job involves getting down to specifics. This process is critical, since it will help you determine what experience and skills your employee must have and a fair wage for the job. Take the time to write up a detailed job description, including specific responsibilities, hours and working conditions. Also, consider whether you can provide advancement opportunities for your new hire, since this may affect the pool of applicants for the job.

Determine Whether You Can Afford an Employee

Before you begin to spread the word that you are planning to add your first employee, be sure that you can afford to hire and keep an employee. Not only do you need to budget for your new employee's salary, but also for additional ongoing expenses such as unemployment insurance payments and payroll taxes and for time-consuming record keeping. In addition, unless your new employee works at home, you will need to provide work space in your office, furnish it and equip it with telecommunications and computing technology. And don't forget to take into account the cost of any benefits you plan to offer your employee, such as paid vacation or sick days, health insurance coverage, and a retirement plan.

Offer the Right Salary

Before you interview your first candidate for your job opening, decide what the job will pay. Do some research based on the detailed job description you have developed. If possible, check with other employers in your area to determine local salaries for jobs that require similar skills and experience and/or that have the same level of responsibility and hours as the one at your company. At the same time, find out what benefits are typical in your market so that you can offer a competitive package.

Know the Law

Before you advertise for an employee or interview applicants for the position, investigate the labor laws related to hiring so that you don't run afoul of legal taboos. For example, when interviewing applicants, you can't ask about age, marital status or sexual orientation, among other things. Also, familiarize yourself with federal and state labor laws with regard to topics such as how employees must be classified (for example, as full time versus part time and as an employee versus an independent contractor), minimum wage rates, required benefits, and overtime pay.

Hire with Care

In a small office, chemistry between employees can be especially important, so be sure that your first employee is a good fit with your personality and work style. Also, no matter how much you like an individual, be sure to check his or her references, and you may want to do a background check as well.

Sources:

Erika Welz Prafder, www.entrepreneur.com, Hiring Your First Employee - Entrepreneur.com

Peggie Arvidson-Dailey, www.allbusiness.com, Ten Tips on Hiring Your First Employee