Hiring your first employee is a big step and a large responsibility and there are many factors that you will have to consider before taking a decision. We have the basics covered for you right here. Read through these tips and approach this task with confidence:
• The most important thing you need to do before hiring your first employee is to obtain an Employer Identification Number (EIN), often called a tax ID number, from the IRS. As long as you were a sole proprietor, you had no need for this, since you could use your Social Security number as your tax ID number, but when you have employees, that is no longer the case.
• Write a job description of the position to be filled, clearly defining the requisite skills, education and experience for applicants. Say exactly what you want the new hire to do. List your goals for the new hire. Concentrate on specific job-related descriptions and avoid relying on subjective information.
• Next, consider how much you can afford to pay the new employee. Factor in all costs related to taking on a new person on board and not just the hourly wage. A general rule of thumb is to add 10 percent to the hourly wage plus the cost of workers' compensation. If you are going to offer benefits, vacation, sick days and the like, be prepared to factor in a cost of hourly wage plus 25 to 40 percent.
• It is important that you conduct background checks on any new employee. You do not want to be held liable if an employee breaks the law while performing his or her duties for your company. Conducting a background check can help determine if an applicant has a criminal history, and can help protect you against possible lawsuits. You can check personal references, prior employment and criminal history, and verify education and training history. In addition, you can also check driving records and credit or financial history.
• Even before hiring your first employee, it is best that you create disciplinary policies and review processes that can help you manage all future staff. Some issues to be addressed include annual leave policy, sick leave entitlement, merit based rewards, overtime benefits and office communication.
Finding and hiring the right person is crucial to the success of any business, and therefore takes time and thought. Make sure you do it correctly, right from the start, at the time of hiring your first employee, so that you can build a loyal and successful team over time.
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