There comes a point in the running of a small business when you have two choices:
Your business continues as it is, generating you a respectable income as a lifestyle business, or…
You hire at least one employee in an effort to grow your business to the next level
Both of these options are viable, good choices; you just have to select the one that works for you and your personal circumstances.
However, in this post, we’re going to focus on those who select option two, and have chosen to hire an employee to help grow their business.
This decision is undoubtedly a positive one and, for small businesses, the hiring of a first employee is something of a rite of passage.
With an employee to help share the workload and provide additional insight, your business should be able to continue to flourish.
Of course, as with anything in the business world, hiring an employee is not quite as simple as it may initially sound.
Below, we’ve put together a guide to five essential things you must remember to do when hiring your first employee for your small business.
While this list is by no means exhaustive, it does provide a beneficial “cheat sheet” to some of the most important things you’ll need to keep in mind both before and during the hiring process…
#1 - Investigate the financial realities
Acknowledging that you need to hire an employee is an important development for your business, but now you have to focus on the financial facts.
While you may prefer the idea of hiring an employee full-time, this is extremely expensive, and may not be feasible for a small business in the early stages of growth.
You therefore need to spend time considering two factors: the cost of an employee’s wage, and how much you can actually afford to pay.
When considering this, it’s vital that you use only the most conservative projections as to the finances of your business; you don’t want to have to hire someone, then realise you have missed your income targets and have to reduce their hours.
When you have consulted your figures and have a number you can afford to spend on staffing in mind, use a labor cost calculator to ascertain how far your budget will stretch in terms of number of employees and remuneration rates the company can reasonably afford.
#2 - Speak to a lawyer about contractual obligations
Drafting contracts for employees is not something that you should seek to do yourself.
While it may be tempting to save yourself money and write your own contracts using online guidance, this is unlikely to produce reliable results.
To protect yourself, and your future employee, you need to ensure that the contracts you use are legally airtight and pertinent to your business—so a visit to an employment lawyer is an absolute essential.
#3 - Speak to your local authority about safety regulations
Before you bring an employee into your place of work, you have to be sure they will benefit from a safe and secure environment.
How far you may need to go in regards to health and safety requirements depends on your industry.
Construction businesses, for example, will need to take steps to ensure safety when working at height or around loud noises. On the other hand office environments will require fewer changes, but you will still need to make provisions for areas such as fire safety.
It’s advisable to always speak to your local authority regarding safety, even if you have read the relevant information and feel you have implemented all you need to.
While many see health and safety regulations as burdensome red tape they are, ultimately, there to protect you and your business—so it’s worth going the extra mile to ensure that you comply.
#4 - Consider your options for hiring carefully
When your business has been fully evaluated, you’re ready to begin the recruitment process. At this point, you have two options to consider:
Direct hiring. With direct hiring, you place a job advert yourself and sort through applicants. This is arguably the cheaper method of recruitment, but is also the most time-consuming.
Outsourcing. If you don’t have the time to go through the hiring process yourself, then it’s worth considering using a recruitment agency. The one downside of recruitment agencies is that they are more expensive, and there’s every chance you might be matched with a candidate you do not think is suitable.
For most small businesses who are making their very first hire, you are likely going to be better off opting for direct hire. As well as being more affordable, it’s more “hands on”, and you’ll feel you have more control to ensure you find the right person for your company.
If you do opt to hire direct, there is one final point to be discussed…
#5 - Ask someone you trust to be involved in the interview process
As important as it is to have control over the hiring process, it’s also important to gain the opinion of someone you trust.
Ask a business mentor, friend, or family member to join you when conducting interviews with prospective candidates. You will find it hugely beneficial to be able to discuss the interview with someone who was actually there, and the person you trust may notice things that you otherwise may have missed.
While you don’t have to strictly follow their recommendations if you disagree, hiring is important, and obtaining a second opinion is always going to be a sensible decision.
The decision to hire your first employee should be the beginning of an exciting new phase of your business. However, there’s no denying that the process can be long, stressful, and full of complications that you had no way of foreseeing.
The points above, combined with your own research, should help you enjoy a hiring process that is as smooth as possible from beginning to end and — most importantly of all — ensures you are able to find the perfect employee for your business.
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