As long as you may try to avoid it, there comes a time in every small business owner’s life when they have to hire an employee. Eventually, you will find that there’s just so much to be done, and it’s impossible to do it all yourself while maintaining the levels of growth that you’re looking for.
Hiring an employee can be a complicated process, and it’s not cheap, either. It’s estimated that it costs around $4000 in recruitment and training for every new employee that you hire. It’s important that you are diligent throughout the recruitment process so that whoever you hire is a good fit and stays at your company for as long as possible. Otherwise, you’ll end up going through the whole process again in a few months!
Before you start the recruitment process, it’s important to think about what kind of person you want to employ. Do they need to be highly qualified in their field, or is temperament a more important factor as you’ll be looking to train them yourself?
Once you have an idea in your mind about what kind of person you want to employ, you can start thinking about interview questions that will tell you what you need to know.
If you’re looking for technical skills, then asking about the process in question and seeing how comfortable they are talking about it is a good place to start. It’s not all about skill, though. You’ll also want to ensure that you’re hiring someone with an attitude that fits in well with your workplace.
Some of the best interview questions you can ask will highlight both skill and attitude. Try questions like:
- Can you tell me about a time you overcame a challenge?
- What skill would you like to improve, and what’s your plan for doing so?
These allow the candidate to demonstrate competence and the way that they approach problems.
Unfortunately, people lie. Or sometimes just omit things that they think you won’t want to hear!
As an employer, you are liable for the actions of your employee, so it’s important that you’re confident that they are who they say they are. A good way to do this is by carrying out background checks as part of your recruitment process.
Background checks cover things like workers’ compensation claims, employment claims, criminal records, drug tests, and credit history. You can’t access a potential employee’s medical records, education records, or any military records without their express permission.
Psychological testing is a more in-depth way than the interview question to find out what kind of person you are interviewing.
Typically, employers might carry out three types of psychological test:
- Cognitive ability tests. Sometimes known as aptitude tests, these are designed to show how quickly someone learns and how good their problem-solving abilities are.
- Biographical data instruments. These tell you about an employee’s interpersonal skills, management style, and personality.
- Personality tests. These are designed to tell you things like how introverted or extroverted someone is, how well they cope with stress and how conscientious they are.
Using these tests can be a good indicator of how well-suited someone will be to a particular role.
When hiring your first employee, it’s really important that you don’t skip checking their references. Previous employers, educators, and character references can give you a great idea of what your employee was like to work with on a daily basis, and it’s amazing what people will tell you during a conversation that they might not have mentioned on a form or in writing.
Ideally, you should ask for two employment references and one character reference.
When calling to check on references, remember that some questions are off-limits due to discrimination laws, so you can’t ask about things like an applicant’s race, age, disabilities, sexual orientation, national origin, religion, or marital status.
For every employee that you have, you will need to withhold a certain amount of their income and deposit it with the IRS, along with Social Security and Medicare payments.
There may also be taxes that you need to consider at the state level.
Payroll can be complex, and it’s a lot to think about each month, particularly as you hire additional staff members. The easiest way to ensure that you set up payroll correctly is to enlist the help of someone who knows HR and payroll law well for your state. G&A Partners provide HR consulting Denver, and they have specialists in other states, too.
Working with an HR consultancy to set up your payroll systems ensures that you get it right. It also saves you a lot of paperwork and thought that you could be putting to work elsewhere in your business.
Register your employee
Every employee that you have will need to be registered with the IRS. When you do this, you will obtain an employee identification number which you will use on any tax returns and other documents that you file with the IRS, so it’s important to keep it safe.
As you might expect when it comes to the IRS, you’ll need to fill out a form to obtain your employee’s identification number. The form is IRS Form SS-4, and it can be downloaded from the IRS website.
When you hire your employee, you will also need to ensure that you are registered with your state’s labor department. You will need to pay state unemployment taxes, which go into a fund to provide short-term relief for workers who lose their jobs.
It’s a good idea to set up employee benefits such as health insurance and a 401k. A lot of employees will expect to receive these benefits from their employer, and if you don’t offer them, this could mean that you lose talented employees.
Be sure that you have these benefits established and have a procedure in place for employees to enroll and sign up their dependents when they join your company.