You’ve been thinking that it’s time to scale up your little company. You’ve been thinking about employing your first employee, but you’re not sure whether the moment is appropriate. How do you know when it’s time to recruit someone? How do you go about doing it? Are there any legal stumbling blocks you must overcome? Is it really possible to hire a new employee right now?
These are all valid issues to consider before posting an ad in the classifieds or hanging a “help needed” sign in your window. Hiring your first employee is a major move with a lot of responsibility (some of which you may not even be aware of). But don’t worry, we’re here to assist. You’ll discover advice on how to recognise when it’s time to hire an application, as well as how to go about doing so.
Table of Contents
The Demand
As your company expands, there may come a moment when you will no longer be able or willing to manage everything on your own. Hiring your first employee is a significant milestone. It is important to remember that workers are legally recognised persons whose rights must be legislated and maintained. If you don’t manage them correctly (record accurate tax information, follow federal and local labour rules, and provide suitable remuneration), you might end yourself in a lot of trouble. Hiring a first employee is a critical stage in the development of many small companies. But how can you know when it’s the right time?
You are losing business because you are unable to meet demand.
You need/want to concentrate on certain elements of your company rather than juggling everything.
Those important red signs may be difficult to see since, as a small company owner, you’re accustomed to carrying everything on your shoulders. That is why it is critical that you take a step back and analyse your company objectively.
The Price (Versus Reward)
An employee’s cost extends much beyond their wage. Before hiring your first employee, the National Federation of Independent Business (NFIB) suggests doing a thorough cost-benefit analysis. Create a thorough work description and estimate the cost of different components of that task (new equipment, facility upgrades, supply usage, etc.). The group also advises small company owners to factor in intangibles like the cost of insurance, the additional expense/time of payroll and taxes, and any perks they may provide.
Once you’ve determined the cost, it’s time to compute the reward. Your new employee may boost efficiency (doing more work in less time), capacity (more client orders, etc.), and a customer’s perceived value of your services. And you can’t overestimate the importance of lessening your own weight. You probably didn’t start your own company to work your fingers to the bone.
Hiring Procedures
It is not as straightforward as placing an ad in the paper and interviewing walk-ins. Hiring a new employee is a time-consuming procedure (made more so by multiple levels of government oversight). The Small Business Association (SBA) has prepared a fantastic checklist of the steps you’ll need to do when employing your first employee. The steps are as follows:
How to Get an Employer Identification Number
Creating tax withholdings
Eligibility checks for employees
Adding your name to state directories
Notices must be posted.
And a lot more.
Visit the SBA’s website for the whole list.
The Working Situation
Hiring your first employee will have a significant impact on your workday. On the one hand, you’ll be able to delegate day-to-day chores like never before. This implies you’ll have more time on your hands and will be able to do more in a single day. However, it also means you’ll have to start acting like a boss. Some of the time you save will have to be spent on things like developing a timetable for your new employee, training them, reviewing their performance, dealing with any mistakes they make during their “probationary” period, and generally ensuring that your company runs smoothly.
Balancing your employer-employee relationships is a crucial component of this. While some form of personal connection is unavoidable, keep in mind that your first employee is your subordinate, and you are the boss. Certain limits (including those that are legally specified) must be observed.
Legal Concerns
When you hire your first employee, you will face a number of legal difficulties. These are (but are not limited to):
Obtaining permission for and carrying out a background check
Creating your tax status
Verifying (classifying) and accurately documenting employment status
Knowing which inquiries are legally barred (such as age, sexual orientation, race, etc.)
determining whether or not you need disability insurance
Knowing the ins and outs (as well as the legal requirements) of providing benefits
All of these legal challenges fall into two basic categories:
Recognizing your employee’s civil rights
Knowing how your local and federal governments define and safeguard workers’ rights.
If you have any concerns concerning these important legal matters, you must contact a legal practitioner to acquire the answers you want. Failure to comply may result in tort litigation, discrimination cases, federal fines, and even criminal prosecution.