What you need to know before hiring employees

The startup was small but growing. New customers were practically knocking down the doors to get the company’s products. Suddenly, the owners were faced with an issue they never believed would be a problem:

Success.

Demand for their products was rapidly outstripping the owners’ ability to provide, so they decided to take the plunge and hire someone to help. And that’s where they got stuck.

So many questions they never had to think about before. The compliance issues alone – from buying workers comp insurance to posting the required safety notices to paying payroll taxes – is complicated enough.

Then there is the nitty-gritty of hammering out job requirements, hours, pay, benefits and more.

Why do you want an employee?

But before any of that takes place, the business owner needs to get clear on this: What is the over-arching goal of hiring employees? Here are some questions to think about.

• Is the employee’s role to grow the business through sales or marketing?
• Will this individual handle more day-to-day tasks that will free up the owners to do other things?
• If the latter, what will be the owner’s focus?
• Does the business need specific expertise, such as bookkeeping or technology, that the owners do not have the skill to handle themselves?
• Will the employee physically build the products?

Once the company owners know the goal, they will be able to better determine success will look like. That could be it sales, savings or more widgets off the line. At that point, they’re ready to focus on the specifics of the job description and the kind of person they want to fill the slot.

Among the top things to consider:

Digging down into job descriptions

• What does the job entail? The job description should include everything from physical to educational requirements, as well as the catch-all “and other duties as assigned.”
• Does the new person have to be an employee? An independent contractor may be a better choice. Be sure you fully understand the regulations regarding contractors and the consequences for breaking them.
• How will the new hire be paid? If it’s an hourly job, how many and what hours a week will they be expected to work? Or is it a salaried position? Commission only? There are regulations for each, and it’s important to know what they are.
• How often will this person be paid? Weekly? Twice a month?
• What is the pay range? Don’t forget, it’s not always about money. For many younger employees, benefits are even more important that the wage. What can the company provide as a sweetener? A retirement plan, paid sick and vacation time, profit sharing, an auto or housing allowance, free on-site day care, gym membership are a few ideas. Tack on about 30% more to the wage to estimate how much the benefits might cost.    
• What kind of personality is best for the job? Someone who sits at a computer all day requires a different skill set from a sales person or a front-line worker whose job is handling customers. Having the right employee for the job will not only make your workplace run more smoothly, but it can be more profitable, too.

Along with job descriptions, the company owners will need to have a policy and procedures manual, or employee manual. Having these two documents can save employers (brand new and those of long standing) a lot of headaches down the road. Watch this space for more on that topic in future articles.

Do you have any questions about hiring, job descriptions, interviewing candidates or where to find job candidates? Please add them in the comments and I’ll do my best to help.