Hiring Your First Employee [NASE Experts]

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Hiring Your First Employee [NASE Experts]

Aug 09, 2012

It’s a good news bad news story. The good news is that your business is growing and needs to hire your first employee. The bad news is ... you need to hire an employee.

There is no question that employee will change your business life. You have to deal with increased costs, new legal issues, added taxes, finding the right person ... and the list goes on.

So, how do you get your ducks in a row?


While employees need to be profit generators, hiring that first employee will take extra dollars.
The hiring process can cost from a few hundred to thousands of dollars.
You will need added office furniture, phones, computers, etc.
Additional taxes, insurance, and benefits will equal 10% to 35% of base wages.
It can take a few weeks or months for an employee's profit production to exceed their costs.

The rules

The government takes a whole new look at businesses with employees. The IRS, state unemployment, workers compensation, and OSHA are just a few of the items that will play a controlling role in your business. Every federal and state agency has informative websites that explain their rules on small businesses and it is wise to keep up on employer obligations.

Finding good employees

Finding good employees is a challenge, and a common problem businesses have is inexperience in "how to hire". Interviewing and choosing the best person for a job is complex and the person seeking a job can be more experienced at interviewing than a business owner is.

Where to find candidates
Advertise in newspapers or online.
Let business associates know you are looking.
Contact friends and family.
List with local colleges.
Consider using a temporary agency instead of hiring an employee.

Have a good job description for the position.
Have a list of questions to ask every candidate.
Let the interviewee do 75% of the talking.
Conduct at least two interviews before making a decision. The first interview is to weed out unacceptable candidates and the second or third interview to choose the "best" candidate.
Check at least three references on all final candidates.

During the hiring process, take your time. Rushing often results in hiring the "wrong" person and after a few months of misery having to go through the whole process again. Finding the right person is only half the job … keeping them is often more difficult. Eighty percent of problems that occur with employees can be attributed to poor communications!

Good communications starts with a written policy manual. Most small businesses think that a policy manual is only "for big business" but, when you hire your first employee you need a policy guide to communicate;

Salary and wage policies
Company rules
And scores of other issues.

Creating a policy is not difficult using one of the many software programs available. A Google search for “employee handbooks” will turn up many options.

Even with a written policy guide personal communications need to be a priority, regardless of whether you have 1 or 100 employees.

Employees need ongoing training.
Have regular "office" meetings to communicate.
Invite employee opinions and input.

These are just a few guidelines to help make hiring and keeping good employees a little less painful. And ... just like anything else it takes practice and experience to become good at it.

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