Hiring is one of the most important and weighty decisions an entrepreneur will make. By hiring staff, the entrepreneur is allowing themselves to relinquish some of the responsibility of running a business, and putting their business that they have worked so tirelessly on at least partially in someone else’s hands. Whether the first hire is an administrative assistant for a store clerk, that first hire must not be entered into lightly.
Once you have decided to hire, however, there is a long list of steps to be accomplished. It’s not as simple as posting a job description, interviewing a few people, and choosing the one you like best. Below are some of the steps that entrepreneurs most frequently skip when hiring.
File the Correct Paperwork
Hiring an employee instantly makes tax filing and other paperwork more complex. To ensure the smoothest start for a new hire, complete every step you can prior to the employee’s start date, and have a detailed plan for what can only be done with the employee present. Before posting a job description, obtain an employer identification number (EIN) and any other required tax IDs. Many entrepreneurs know this is a requirement, but fail to make it their first step. The Small Business Administration has a list of other legal requirements and considerations in making a first hire.
Additionally, establish a well-organized filing system for keeping track of any necessary paperwork. Know what records need to be saved and for how long, and ensure that these standards are being met.
Determine Compensation and Set Up Payroll
Job applicants are likely to ask about compensation during their interview, so be sure to have a detailed and confident answer in place. Consider wages, insurance benefits, and sick and vacation time, and be sure to include any additional or unusual benefits as well.
This is also the time to set up payroll and determine pay periods, withholding, and other considerations, which this resource from Intuit outlines. Applicants will want to know how frequently they will be paid, and having this all determined in advance will help the first few weeks of payroll go smoothly for new employees.
Learn to Conduct Great Interviews
Many entrepreneurs will conduct their first interviews from a pre-determined set of questions that they found online. While those articles, like this one from Zenefits, are a great starting point, interviews must be a flexible and natural conversation. Prepare interview questions that will provide a specific insight into the candidate: highlight about a particular skill, probe an attitude or mindset, or ask about specific past experiences.
The best interviews are a two-way street: the interviewer determines who they want to hire, while the interviewee decides if the business is a place they truly want to work. Thinking about interviews this way starts off the employer-employee relationship as a mutually beneficial agreement, rather than a lopsided power balance. As the interviewer, answer questions as openly as possible and address the concerns of candidates who may be worried about joining such a new company.
Conduct Reference and Background Checks
This step is the one most often skipped by small business owners. It might come from a need to hire quickly, a feeling that those are too invasive, or just a good feeling about the desired candidate, but reference and background checks are often the first thing to disappear from a hiring process.
These checks should serve not as a major deciding factor in who to hire, but rather a final confirmation that this hire is the right one. Background checks will confirm that the person is who they say they are and reveal any criminal history that may affect business function. It is rare that a background reveals egregious lies by a job applicant, but it’s far better to catch the lies before making a job offer than to put the business at risk. TransUnion’s ShareAble for Hires has a great resource on what background checks include and how to conduct one.
Similarly, reference checks can confirm that the applicant is as good at their work as they claim in their interview. Taking the time to speak with an applicant’s former managers and co-workers provides valuable insight into how they interact with others and how they handle different work environments. If calling references for the first time seems intimidating, take a look at this article from Monster for some tips on how to tackle the task. Reference checks can be frustrating when the references do not respond quickly, but building the extra days into the hiring process to accommodate these check can make a big difference.
Create a New Hire Orientation
The first day at any new job is often intimidating, and with small businesses it can be even more so if the owner doesn’t take the time to carefully plan a first day. The new employee needs to be confident that they will have enough work to do and will be supported as they join the adventure of being part of a growing business. A well thought out onboarding process sets the foundation for keeping employees around long-term.
A good orientation will always give a brief overview of the company and how it operates. For first hires, it may seem like there isn’t much to talk about yet, but this is a great opportunity for the owner to talk about their journey of entrepreneurship and their vision for the future of the company. This helps new employees feel welcomed and like they have a deeper investment in the company.
The first day orientation should include time to fill out all the necessary new hire paperwork, including tax documents and benefits forms as discussed above. It should also include a detailed job description with a breakdown of tasks to be done each day, week, month, and as needed, or any other pattern that makes sense for the role. Finally, the employee should be able to get started on some of their tasks. (And taking them to lunch on the first day is always a nice touch.) For more ideas on creating a new employee orientation, check out this article from The Balance.
Hiring can seem like an overwhelming process for any entrepreneur, but is an excellent sign of business growth and success. Planning ahead and having a solid foundation for the hiring process will go a long way in creating a strong relationship between employer and employee, and incorporating these steps into the process will make it smoother and avoid pitfalls that are common to many small businesses.
Author bio: Sophia Conti is a contributing editor at 365 Business Tips, a new blog that gathers the best ideas and information for small business owners. She curates the hiring and human resources section of 365 Business Tips and is an expert at improving the employee experience.