Your business is growing (yay!), and now it’s time for you to hire your first employee. It’s a huge step forward for your business and proves that your hard work is paying off.
But as a small business owner, you want to make sure you go through the hiring process properly. While choosing the right person matters, there are also legal requirements that now apply to you.
You’re no longer just a business owner; you’re an employer, and with great power comes great responsibility (a little too dramatic?). In this post, we’re going to go through the ins and outs of hiring your first employee and make sure you’re starting off on the right foot.
Hiring your first employee is an exciting process, but it’s not one you should take lightly. This is your business, and you want to make the right steps. So, before writing a job description, there are some questions you should ask yourself.
Having a busy month is great, but sometimes we take it as a sign that we need an employee. Businesses go through ups and downs – some months you’re completely swamped, and other months you’re staring at the ceiling.
In those busy months, we start to think about hiring an employee. But not so fast! Before hiring an employee, you need to make sure you have enough workflow during busy and slow times. Otherwise, you may need to let them go.
So, first, determine whether you need an extra hand. If the answer is yes, look at the type of employment that would suit your business. Perhaps you just need seasonal help or outsource tasks on a flexible basis. However, if you’re consistently busy and, for example, have had to turn down clients or can’t keep up with orders, then you probably need to hire an employee.
Hiring an employee comes with its costs. Aside from the time you spent posting your job and reviewing resumes, you also have the costs of keeping an employee on the payroll.
Coming up next, we’re going to talk about the legal requirements needed when hiring. Take a good look at this section and see how much it’s actually going to cost you to hire someone. If you’re not financially ready to hire, you can always outsource to an independent contractor.
I’m not trying to scare you off – I’m just giving you a gentle reality check. The moment you start the hiring process, there are state and federal laws that you’ll need to comply with. And once you hire, there’s more red tape, like:
I know; it sounds like a lot right now. But listen, if your business is growing and you can financially support hiring an employee, hiring an employee isn’t necessarily a bad decision. There’s just some rules and paperwork you need to comply with.
If you’re not ready for this stage, outsourcing is a viable option. Here are some outsourcing websites you can research.
Hiring an employee takes a few more steps than you may think. But that’s okay! Below is the list of legal requirements you’ll need to follow. You may want to consult your accountant for any state specific requirements.
If you already have an employer identification number (EIN), skip this step. If you don’t have an EIN, this is the first step you need to complete before hiring your first employee. Read this post to learn more about an EIN and why you need one.
After hiring your first employee, you’ll be responsible for withholding part of their compensation, Medicare, and Social Security tax payments and sending it to the IRS.
On top of that, as an employer, you’ll need to have employment tax records for at least four years. There are certain taxes you’ll need to pay immediately after hiring an employee. We highly recommend getting an accountant who can help you sort through everything and make sure your taxes are organized.
After hiring an employee, you have to pay state unemployment compensation taxes. The taxes go towards your state’s unemployment compensation fund, which provides short-term relief for individuals who lost their jobs. For more information, go to the Department of Labor’s website.
Most states (not all, so double check the state your business is registered in) require employers to have worker’s compensation insurance in case an employee is injured at work. This insurance covers medical costs and lost wages.
As said earlier, you’ll need to withhold part of your employee’s paycheck for state and federal taxes. Payroll systems like Gusto, QuickBooks, Paychex, and BambooHR can help you calculate how much to withhold from each paycheck.
Employees must fill out a W-4 form. This form lets the employer (you) know how much money should be withheld from the employee’s paycheck for federal taxes.
Form I-9 verifies the identity and employment authorization of individuals hired for employment in the United States. All employers in the United States must complete Form I-9 for each person they employ (citizens and noncitizens).
When you hire your employee, you’ll need to report their information to your state’s registry. This information is then sent to the National Directory of New Hires, where the state finds those behind on child support payments.
Your business must comply with the federal Occupational Safety and Health Administration (OSHA) regulations. OSHA has a series of safety rules, including safe tools and equipment.
Several federal labor laws require employers to post requirements in a visible place in the workplace, so employees understand their rights under the law. This can vary depending on the state your business operates in. I recommend contacting your state labor office—find your local labor office here.
While this isn’t a requirement, creating an employee handbook is a smart move to make. Whether you have 1 or 100 employees, an employee handbook will answer all questions about rules and protocols for employees, especially first-time hires.
This isn’t a requirement, but again, it’s a good move to make as a business owner. A personnel file helps you quickly find an employee’s basic information, work history, benefits information, and workplace injury history.
You want to attract candidates that connect with your business and will push it forward. You’re not looking to hire someone just to push paper around, you want them to make a positive impact on your business. But to attract the right people; you need to write an engaging job description.
A job description will outline the requirements, qualifications, and skills for the role, but it does more than that. It includes details about your business — your mission, culture backstory, and additional information like salary.
On top of this, your job description markets your business to attract the best talent. While you shouldn’t fabricate anything about your business that you can’t show for, your job description should highlight some benefits of working with your business.
That was a lot of information to take in, right? Well, we’re going to break it down into a step-by-step guide on how to write a great job description. Let’s start!
Today’s businesses try to look “hip” and appeal to a younger audience, showing a more laid-back culture. And while using a catchy job title may seem like a good idea, it can prevent you from attracting the right candidates.
When job hunting, most people are looking for roles that match their skills and experience, so using the job title “ninja developer” or “out-of-this-world rockstar clerk” can be confusing. Instead, aim to use industry-terms for the job title. For example, “Social media and content manager” or “Part-time bookkeeper.”
Before you talk about what your business is looking for, you want to tell the candidate who you are. Your mission statement will tell candidates the purpose of your business and how you serve your customers. Since this is a job description, you want to keep this section a couple of sentences.
After your job title and mission statement, it’s time to get into the actual description of the role. You don’t need to write an essay about the role. Instead, you want the overview of the job to be short and engaging.
In 3 to 5 sentences, include what the candidates will do in their role, how it contributes to the business, who they’ll work with (if anyone), and the general qualities you’re seeking in an employee.
Candidates need to know what they’re applying for – a job title is not enough of a description. In this section, you’ll give between 5 to 10 bullet points on what they can expect to do in their role. When writing this section, consider these tips:
These are skills that you need your candidate to have in order for them to be successful in the desired role. You can write them out; however, bullet points are easier to read. With 5 to 7 bullet points, include:
These aren’t skills that are necessary for the role, but they’re nice to have. You don’t need to add this section, only if there are skills that may apply.
Now, it’s time to talk about compensation. The candidate knows the role, the expectations, and the requirements. While many businesses don’t include compensation in their job descriptions, 61% of job seekers consider this information very important when decision-making. Plus, it saves both you and the candidate’s time.
You want to be upfront and transparent regarding the location and time. Is the position remote? Hybrid? In a store? What are the hours? Are they flexible? Full-time? Part-time? This information will help the candidate determine if they can fulfill the role.
Don’t leave it up to the candidate to figure out how they should apply for the job. Write clearly who and where they should apply to. And keep the application process simple, if it’s too frustrating, you’ll turn away potential candidates.
This is a big one (and honestly, something many businesses forget to do). Before posting your job opening, check for spelling and grammar. You’re looking for the best talent, right? Then you also need to play the part.
You’ve done all the nitty gritty, and now it’s time to hire your first employee. After posting your job description, you’ve been sent some CV’s, and now it’s time to interview eligible employees.
Learning how to conduct an interview is a great skill to have. It’ll help you learn about candidates and choose the right person to join your small business. Here’s how you can conduct a great interview.
Your candidate may be preparing for the interview, but you’re not off the hook! As this is your first time hiring someone, you need to prepare yourself. Go through the candidate’s resume and/or cover letter and see how their skills could contribute to the role.
Mix up the questions by asking situational questions and fun ones. While skills are important, you also want to make sure that they have the right personality for your business.
The STAR method is a popular technique that many interviewers use. It stands for:
This method can help you understand the mental process a candidate goes through, whether confronted by a difficult situation or task.
Essentially, you ask the candidate to describe a time when they had to use a certain workplace skill to overcome a challenge. While you don’t have to use this method, it can help you better understand your candidate’s previous work experience.
Yes, you’ve already described your business and the position in the job description, but it’s time to describe it again. Keeping it short and sweet, give a brief description of your business and how the role fits into your business’s main goals.
Before you really start the interview, take some time to describe the interview process to the candidate. Mention the structure of the interview, if there are any test assignments and the length of the interview. It’ll keep the interview organized and sets a goal for you and the candidate.
Before grilling them with questions (I’m joking, you’re not going to grill them), get to know the candidate a bit. Ask general questions about their professional interests and why they’re interested in this role.
This question can help you understand their professional development and if this role plays a part in that. Oh and at this stage of the interview, you should have a pen and paper handy because you’ll want to take notes of important information they share with you.
After asking the candidate about their career goals, it’s time to ask questions related to the role. So, for example, let’s say you’re looking for a baker for your pastry shop. You may ask them about their baking experience, questions about technical skills and knowledge, etc.
Another example can be you want to hire a social media creator for your clothing line. You’ll ask questions on previous results they’ve produced for other businesses, their process for creating content, etc.
If you’re not entirely convinced of an answer or want to know more, ask follow-up questions. This person may be joining your business, so feel free to ask questions to gain greater insight into their personality, values, and processes.
Now it’s time for the floor to open and the candidate to ask any questions they may have on their mind. They may have questions about the position or business, which will help them determine if they’re a good fit for the role.
You’ve made it through your first interview – congratulations! Before you close things up, describe the next steps to the candidate. When can they expect to hear from you, and what the rest of the interview process looks like.
Now, you have everything you need to hire your first employee. While this experience is new and exciting, follow the steps above to ensure the hiring process goes smoothly from beginning to finish. Once you hire your first employee, you’ll be ready to hire another!
This portion of our website is for informational purposes only. Tailor Brands is not a law firm, and none of the information on this website constitutes or is intended to convey legal advice. All statements, opinions, recommendations, and conclusions are solely the expression of the author and provided on an as-is basis. Accordingly, Tailor Brands is not responsible for the information and/or its accuracy or completeness.
Natasha Ivanovic is a Vancouver-born creative writer that started her writing career as a freelancer while studying for her Master’s in Investigative Psychology. On the weekends, she writes short stories for her blog, TheLonelySerb, and cuddles with her bulldog, Bob.
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