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Tips for Hiring Your First Employee

By Joel Handelsman | June 29, 2012

Every small business owner plans to succeed. Some do, some don't. For many of those who do, there comes a time when it's necessary to bring another person into the business. There may be obvious choices, like a spouse, sibling, child, parent, in-law (just kidding) or friend. On the other hand, you might need someone with specialized skills to complement or augment your own capabilities.

There can be a variety of reasons that a business owner might need help, but they all basically come down to the fact that there's too much work for one person to do. Much like many other things in the world, hiring an employee for the first time will probably be the most difficult hire you ever make. It will also cost you time, but if you hire right, it will be time well spent. Here are some tips on getting the right person the first time around.

What Do You Need and Who Can You Afford?

Knowing that you need help of some kind, what can you afford? Even if you bring in your kids to help, you'll almost certainly have to find out what the state or federal minimum wage law requires. You have to pay the greater of the state or federal minimum wage.

Based on your budget, determine what tasks the new employee will perform, and whether they will be a part-time or full-time employee. Factor in all of the costs, including the impact of providing benefits, such as vacation time, or insurance, to the employee.

Your choice will have tremendous impact on your responsibilities as an employer. Payroll taxes, potential liability for an employee's actions, even theft by the employee, can all become issues.

However, on the bright side, it also affords you the opportunity to examine what you do for the business, and what someone else could do to free your time to grow the business. Consider what the employee can do for the business that you're doing now. What can you delegate and what should you delegate?

Selecting the Right Person

Remember that an employee represents you and your business. It's important to define the role that the employee will play, and clearly communicate that to him or her. Creating a position description will help you in doing that, and it will also help you when you publicize the job opportunity.

At the same time that you're trying to determine what your employee is going to do, you also have to consider how much you can afford to pay the employee. It's possible that you might find that you can't get the assistance you need from an employee for the amount you can afford to pay. You can defer the hiring decision, or you can redefine what you want an employee to do, whether by reducing hours worked or changing job responsibilities.

Once you've publicized the opening, you'll presumably begin to receive responses. At that point, you need to do two things. First, review the responses to see which applicants are qualified. Second, determine if your job posting is effective and yielding candidates that you would consider hiring. Revise the content of the ad and your choice of media, if you must.

The Hiring Process

After you contact likely candidates, determine where and when to conduct interviews. For many one-person businesses, the office might be a spare room, the kitchen table, a coffee shop, or anywhere you are at the moment. Make a reasonable choice of location, based on privacy requirements and convenience, unless you have a fixed place of business and want to familiarize candidates with the inventory, processes and layout.

Determine in advance what kind of employment and/or educational history you'll want to see, and, when responding to applicants, clearly communicate what kind of credentials or resume they should provide. The amount of effort you'll need to expend to check the accuracy of information supplied will vary. Hiring a medical technician is a lot different than hiring a gas station attendant.

Once you've decided who to hire as your first employee, you'll have to make an offer. If you've communicated what you're willing to pay, the discussion will likely turn to working conditions, how and when the employee will be paid, and the vacation time and other benefits that you may provide. How hard you bargain should be determined by how desirable the candidate is and what's reasonable for the business.

Don't Accidentally Create an Employment Contract

A final note for almost all businesses: remember not to do or say anything that could cause an applicant to think that they are being offered an employment contract. If it turns out that someone just doesn't work out, you want to be able to let the employee go without consequence.

Posted June 21, 2010.

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