If you’ve built your business from nothing, you can only take it so far on your own. Eventually, you’re going to need to hire someone so that you can scale your business up.
Yet hiring your first employee takes more than just finding the right person. There are several different legal requirements that you’ll need to fulfill. There will be taxes and contracts and more to think about.
So, in all, what do you need to think about when hiring someone?
In this article, we’ll discuss everything you need to know about how to hire your first employee.
The Legal Considerations
When it comes to hiring your first employee, it can be tempting to jump straight in and start creating job descriptions and hold interviews. Before you are able to do this, you must first examine the legal requirements.
Running your business and not being responsible for any employees is one thing, but when you’re an employer, things will change. If you’re in doubt about anything, speak with an HR specialist to get advice.
Before you hire an employee, you’ll need to obtain certain documents in preparation. Before your employee starts, you’ll need:
- An Employee Identification Number (EIN)
- To register with your state labor department and state revenue department
- To know about how to withhold tax
- To have worker’s compensation insurance in place
- To have I-9s for every new employee
- Worker’s rights posters
Before you can hire anyone, the IRS will issue you an Employer Identification Number or a Tax Identification Number. If you have already filed business taxes, applied for a business license, or have opened up a business bank account, you may already have an EIN.
If you don’t already have your EIN, you’ll need it. Employees will use your EIN when they put their income taxes through. You’ll also need to report your payroll related taxes.
Every state is different. Make sure that you find out and understand your state labor agency’s jurisdiction over your business. You’ll need to pay specific attention to any benefits along with the requirements for reporting new hires.
Employee’s taxes are collected on a pay-as-you-go basis. That way, employees aren’t left with a big tax bill at the end of the year. There are a number of factors affecting an employee’s tax. Your employee will need to complete a W-4 form.
You’ll need to think about automatic payroll software that will calculate and deduct taxes from worker’s wages.
Finally, have contracts drawn up ready for your new hires. These will protect both them and you. If you’re looking for pre-written templates, there are contract resources available online that’ll save you time and effort.
Decide on the Roles and Responsibilities of the Job
Once you have all the legalities out of the way, you can start to think about what you are looking for in your new employee.
You will need to be clear about the roles and responsibilities so that you can be sure that you have the right employee, and so they will know what will be expected of them.
Think about the problem that you’re trying to solve. Then, map out your job description. You need to avoid using vague terms. Be as specific as possible and prioritize the most important aspects of the role.
Remember, your new hire has to meet the needs of your business.
Do some research into how other companies are offering similar jobs. What are their salaries and benefits? You will need to be competitive, or you will struggle to fill the role.
Find the Right Candidate
There are several ways of finding the right employee. You could opt to advertise and carry out all of the interviews yourself, or you may want to outsource the task to a recruitment firm.
If you decide to look for employees yourself, you could try the following:
- Posting a job ad on recruitment sites
- Approaching potential candidates on networking sites like LinkedIn
- Hiring from your network based on referrals
Be sure to provide as much information about the job on any ads that you place and create clear expectations about what you’re looking with regards to the actual application.
Carry Out Interviews for the Role
Before you conduct your interviews, have a plan. Set out the key questions that you’re going to ask. If you are not consistent with your approach, you won’t get a fair comparison.
The type of questions that you ask should be open and should elicit a response that requires examples.
You should also ask practical questions in the interview, such as how they will get to work, if they have any holidays booked, and what their salary expectations are.
Choose Your Candidate
There is no right or wrong when it comes to hiring someone.
You may want to take their experience into consideration, as this might mean they’ll have less learning to do to adapt to the new role. You may also want to consider their qualifications and education.
For many employers, personality, and what the candidate will bring to the team will be important.
If you’re tied between two candidates, don’t be afraid to hold a second set of interviews to narrow it down further.
Make the Offer
Finally, you can notify the candidate of the job offer. Be positive and congratulatory, and be sure to give them time to accept the role. Once they have accepted, you can then agree on a start date.
Once this is in place, you can start the onboarding process. This will involve issuing contracts and beginning to train your new hire.
How to Hire Your First Employee
Knowing how to hire your first employee is essential. You need to go into the role of employer with your eyes wide open.
If you follow the process well, you’ll get a great employee who will want to work for you. If you miss steps in the process, it could spell disaster.
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