Hiring Your First Employee
You are feeling overwhelmed and the tasks that lay before you are never ending. You have been working 12 plus hours a day for months and still can’t seem to make any headway. You think! Maybe it’s time I hire an employee. So you place an advertisement in the newspaper, on-line or even with an outsourcing website. You have plenty of candidates to select from. Then you select one that you like and wham bam you hired your first employee.
The day starts out great and you give your new employee a list of things to do. Two hours later the employee says that she or he has completed those assigned tasks. So you look for more things to give the employee and you end up in this vicious circle. Then either one or two things happen. First, you run out of tasks for the new hire to do or second, you have to let the person go because your cash flow. You hated to do that but you did not have a choice. Don’t let this happen to you.
You only hire an employee for two reasons:
- The employee can save you money.
- The employee can reduce your expenses.
When hiring an employee that individual should bring in revenues equating to 150% of the employee’s salary plus benefits. That is the minimum level the employee should be contributing to the company. The other way an employee should be contributing to the company is through reducing expenses. If you were outsourcing part of your work and decided it maybe cheaper to do it in-house so you hired an employee then the employee should be costing the business 50% less than the cost of outsourcing (150%)
Now that you decided the time is right to hire an employee you need to ensure that the potential employee fits the culture of your business. If you hire a grumpy person you will have a grumpy culture. If you hire a positive, hard worker than you will have a get work accomplished culture. Also look for an employee who is loyal to you and the company. How do you determine if someone is loyal? Ask the potential interview applicant questions about how he or she handled certain situations. How the applicant felt about their past job?
Before you begin the employee search, decide what traits are you looking for in an employee. What culture have you created for the business and what kind of employee will in braise this culture? Just remember that the perfect person does not exist. Look for an employee who has potential and not necessarily all the skills that you are looking for. Employees that are looking for a career change but don’t have tons of experience will jump at opportunities to work for less money. These employees would love to show you how much they know or what they are capable of as they continue to grow their skills.
Also remember that it takes time to bring someone up to speed on the inter workings of the business. The new hire will not know not to talk to John before he has his first cup of coffee or that completion of tasks should be emailed to John.
The worse mistake you can make is hiring the wrong employee in the first place. This can set back a company months through the process of firing the individual or the individual leaving the company. Then it can take months to get a new employee to replace them.
Before you hire your first employee make sure that you take the time to put things in place.
- Does your business have an Employer Identification number? (EIN)
- Do you have Worker’s Compensation Insurance?
- Post required Notices
- Job Safety and Health Protection
- Equal Employment Opportunity (Only if involved in Federal Contacting)
- Fair labor Standards Act
- Employee Eligibility Verification
- Setup record keeping
- Have you determined the first position that needs to be hired?
- Do you have a list of duties and assignments that needs to be fulfilled?
- Have you started to develop your employee handbook?
- Have you developed a Job Description for the position?
Now that you understand the process and the theory behind hiring employees go ahead and start developing a listing of tasks that must be performed by the new hire. You might want to break these tasks into three columns. See the table below as an example:
|Daily Tasks||Weekly Tasks||Monthly Tasks|
|Answering the Phones||Call and remind clients about upcoming appointments||Issue Parking Passes|
This will come in handy when you sit down to write the job description.
Now that you have taken the steps involved in getting your business ready to hire it’s first employee and have hired the “right” employee it is time to get on with the business at hand. Let’s make some money so we can pay our first employee!!!