How to Hire Your First Employee

Hiring your first employee can be a daunting experience. After all, you’re responsible for not only finding the right person to fill an important role in your business but also ensuring that they are properly trained and supported in their new position. There are many factors to consider when it comes to hiring your first employee - from job descriptions and salary expectations to interviewing processes and background checks. Fortunately, with the right knowledge and preparation, you can make sure that your recruitment process is as stress-free as possible. In this guide, we will provide an overview of what it takes to hire a successful first employee so that you have all the necessary information at hand before beginning the search for talent.

Taking on your first employee is a huge milestone for any small business - and we are here to ensure that you make this transition seamlessly! Before perusing potential resumes, there are several important steps that must be completed; don't worry though as we've listed them all down below. Completing these prerequisites will prepare you perfectly to receive the assistance required to elevate your business even further.

Do the math – Can you afford to hire someone?

It is important to consider how much you can realistically spend on wages and any additional costs associated with bringing a new hire on board. For example, you might consider adding an additional 15% to your estimated salary costs to account for payroll taxes, benefits, and other expenses.

Before writing up a job description, which must include a salary range in places like Colorado, New York, California, and Washington, consider looking at sites like Levels, Glassdoor, or Indeed to get to know the market rate for positions with similar qualifications in your area. Doing research ahead of time will ensure that you are offering a fair wage and remaining competitive when searching for talent.

Set up your Payroll tax accounts

Don’t skip this step! It’s best to get a jump on this early, as it can sometimes take weeks to process a new account. By accounts, we mean federal and state tax withholding accounts. With employees come wages, and with wages come taxes. You must collect taxes on employee wages and pay some taxes directly from your business.

To do this, you need specific account numbers to pay federal taxes and state taxes– which, depending on the state, could include income, unemployment, or other taxes. These unique account numbers are used so the government can track wages by the organization. In order to collect federal tax, you’ll need to register an Employee Identification Number (EIN).  

For federal payroll taxes, once you’ve got your EIN number you can file and pay online at eftps.gov or your payroll software can handle this for you. The state taxes you collect will vary depending on your state. Some states don’t have income taxes (federal taxes still apply), but they might have unemployment or other taxes. We help our clients sort out which accounts need to be set up so that they are always in compliance with state law.

Don't forget about remote employees

Remote employees are becoming more and more common in today’s business world. If you’re looking to hire your first employee, but don’t have the room for an in-office worker, remote employment is a great option. With remote work, you can hire employees from anywhere - even around the world - without having to worry about relocating them or providing office space.

Moreover, many remote employees are able to work flexible hours and can provide a wealth of skills that an in-office employee might not have access to. However, it’s important to be mindful of labor laws when it comes to hiring remote workers - make sure you research any legal requirements that may apply to employers in your state.

Write a great job description

When you want to bring someone on board, the first step is creating a job description. It could be for a marketer who will promote your brand, an experienced salesperson that can increase revenue, or it might even be for an office manager responsible for daily operations so you can concentrate on other parts of your business. Clearly define how much authority and responsibility you’re willing to give away, since training this new employee must happen quickly in order to maximize ROI from the investment. 

If you're looking to add a new employee and fill an untouched aspect of your business, it's important that they possess enthusiasm and confidence. Hiring someone who can quickly jump into the role with minimal instruction is key when entrusting them to manage a whole department or division of your company. Experienced self-starters are therefore essential if you want this process to be successful.

Deciding whether the position will be full-time or part-time is essential, taking into account both your financial resources and salary expectations for the role. You may not be able to bear a superstar employee's full wages yet you can offer them a partial job with an agreement of making it permanent when your venture has enough capital. This kind of arrangement could bring more commitment from someone who understands precisely what their performance in this organization implies. 

As you post the job, make certain to accurately explain what is required of the position and what you are offering in return. Be sure to include details about working hours, responsibilities, education/experience qualifications demanded for the role, as well as a comprehensive overview of your business. Additionally, it's essential that you clearly specify salary expectations; provide an honest wage range along with any benefits available now (and those coming soon) while also outlining what type of work environment they can expect from your company.

Set up your payroll software

Some small business owners may think that finding the right person is the last step in their hiring process. It is, in fact, merely the beginning! You will need to deduct and collect taxes, track their wages for their W2 at the end of the year, and potentially offer reimbursements or benefits. There are many details needed in order to conduct a compliant small business hiring.

We suggest using a software program like Gusto (you’ll hear us say that a lot). We love using Gusto to run payroll for every one of our happy clients. Though there are other options out there (ADP, Paychex, Intuit), Gusto is the best online small business payroll service. In terms of price to performance, Gusto is the market leader by a country mile. It has everything a small business owner needs, and nothing you don’t tie together with a uniquely easy-to-use interface. Gusto’s laser focuses on ease of use, reducing paperwork, and providing peace of mind shows in every element of the service.

The payroll service will house all of your employees’ information including their social security and tax information, address, contact info, and pay rate history. This way, you don’t have to keep paper files and your new employee can feel confident you’ve got their HR information under control.

How to onboard your new employee

You’ve posted your job, perused endless resumes, conducted interviews, and finally found the perfect person for the job! Huzzah!

Next comes the nebulous term ‘onboarding.’ Onboarding is a crucial part of the hiring process; beyond just making sure you’ve collected their tax details, you want to make sure the new employee fits in as soon as possible. Your first hire will likely have the worst onboarding experience of anyone you hire. Another way to say that is that this process should get better and better the more you hire. This is all the more reason to make sure your first hire is a self-starter with relevant experience and comfort in communicating their needs.

After all the work accounting for, defining, and filling the role, employee onboarding is the moment of truth. This could be an enthusiastic welcome to a clearly defined role, or it could be a frenetic, disorganized mess that instills anxiety in your new hire. Do as much as you can in advance; things like setting up their email account, ordering supplies/equipment, or adding them to the website/directory, are all best if completed ahead of their start date.

Now it’s time to get to work! Be as clear as possible when defining duties for your new employee, and anticipate that this is an ongoing, two-way discussion. Confusion about the job could make it a bad experience for both of you, and it may be that you’re asking too much [or too little] of your new hire at first. List specific things that your employee will be primarily responsible for, detail, to the degree you are able, how these duties will be performed, and then create space for receiving feedback and adjusting accordingly. Being open to employees’ ideas and concerns is essential for having a successful work relationship. Making your new employee feel valued and inspired may seem like more than you can handle, but it makes a major impact on morale. And morale makes a major impact on productivity. Keep an open line of communication and remember to have a little fun sometimes! You will naturally discover your qualities as a leader, even if you don’t yet feel comfortable in that role. You may make some mistakes along the way, but you will learn from them; before you know it, you’ll be ready to put those lessons to work by hiring employee number two and further growing your business!

Need help managing your payroll or onboarding?

Schedule a call if you are ready to put your payroll on autopilot, and get back to doing what you love.