Lots of businesses start as bootstrap projects, with the owner juggling every task and every minute of the work. Hiring your first employee is a major milestone, but team building is an essential skill for business owners. Here are some important hiring steps to consider, inspired by advice from WBEs in WBENC’s Your Advice column.
1. Know when to hire your first employee. Feeling busy isn’t necessarily a good reason to bring someone on board. A better sign? If you’re turning away work, you may be ready to expand. Another good reason to hire is if you have business ideas or services you cannot execute alone.
2. Consider what new talent you need, and why. It’s tempting to hire someone just so you can delegate tasks you dislike. The important thing is recognizing what your business needs to do more of consistently.
Patti Massey, president and founder of MYCA Material Handling, developed her vision of why she needed a finance controller to help her plan budgets and resources for further growth. “...We were fine on cash flow, but had no idea where we stood from a profitability standpoint for various business units,” she said.
3. Work with contractors first. Freelancers make up about a third of the workforce, offering a wide variety of services. An independent contractor can help you create the documents and processes that will get future employees up to speed. You’ll also get valuable experience managing and budgeting for additional workers.
4. Still need a full-time hire? Get your paperwork in order early. Hiring staff means a lot of extra record-keeping to protect your business and keep the IRS happy. Get as organized as you can before you even post a job listing, and finish the paperwork by your employee’s first day on the job. Here’s a list of what you’ll need:
● Form SS-4, for an EIN if you don’t already have one
● Form I-9, Employment Eligibility Verification
● Form W-2 for each employee
● Form W-4, withholding allowance
● Worker’s compensation insurance
● Proper registration with your state’s labor department and new hire reporting agencies
● A payroll system to withhold taxes appropriately
● Copies of any notices you are legally obligated to display in your workplace
● Form 940, to report wages paid on your next tax return
● Any contract you’ll ask an employee to sign
5. Create an employee model. Hiring and training an employee is expensive. The last thing you want is to have to let someone go if their job isn’t sustainable. Before you hire someone, outline their daily and weekly duties, as well as how you’d like their responsibilities to develop over the next year.
Margaret Marcucci, president and CEO of Coranet, credits the PXT assessment with improving her hiring process. “With PXT, we build a performance model for each job, find excellent matches for that role, and improve performance and retention.”
Tip: Take a moment to plan your new tasks, too. Part of the reason you’re hiring someone is to free up time to pursue important goals. Create a work plan for yourself to use your time effectively. Remember that some of your time will be spent managing the new hire.
6. Define your values. What is your brand promise? WBENC Corporate Members often speak about their values. Is your main selling point customer service, like Disney, or efficiency, like FedEx? If you had to choose between a product that’s innovative but flawed, or safe but done perfectly, which would you prefer? Hire people who can continue to strengthen those values that lead to a company culture.
Jennifer Maier, CEO of WDS, Inc., follows her mantra, “Hire for attitude, train for skills.” Kimberly Lawton Koon of Lawton Connect goes so far as to include a personality assessment in her hiring process to gauge how new employees will fit.
7. Develop a company culture. Job-seekers recognize certain benefits of working in a small company. Start-ups may be more flexible, offer closer mentoring, and give employees greater variety in their tasks. Think about how you want your company to run. Are you fine with telecommuting arrangements, or interested in promoting employees who mentor each other? Proactively working on your culture can help you attract and retain the right employees for you.
8. Focus on employee retention and growth. A successful company culture makes employees feel like valued team members. Inviting feedback, such as ideas to improve work processes, is a good way to build a collaborative atmosphere. If you offer perks, like dry cleaning or yoga classes, make sure they’ll actually benefit employees. For example, employees who use public transportation might not want to lug a laundry hamper around.
Finally, look for ways to develop your employee’s role in the company. Keep an eye on employees’ talents and where they intersect with directions you’d like to pursue with your business.
Tip: Millennials in particular may be oriented toward ascending into new roles quickly.
What are some resources or tips you’ve learned about hiring and team building? Share your thoughts in the comments!