10 (seriously) straightforward steps to hire your first employee
If you’re looking to hire help, get this complete guide on how to hire your first employee. It walks you through 10 straightforward steps on how to do it right the first time.
You’re sitting on the edge of your seat, anticipating your next big business move: hiring your first employee.
After all, you’ve been working hard at starting an online business from home and grew it to a point where you can finally afford another team member.
You think to yourself, life will be so much better with some help.
Not only will you be able to service your customers better, but you’ll also be able to focus on growing your business and enjoy the benefits of being an entrepreneur.
Doesn’t get much better than that, right? Well, sort of.
Finding the right employee can be tough. Where do you even begin?
For starters, here. If you’re wondering how to hire your first employee, we put together these 10 steps to guide you through the entire hiring process from end-to-end.
Let’s get straight to it.
10 steps to hire your first employee
Step #1. Define your employee’s role
First things first: you need to outline your employee’s role clearly. To make sure you have a crystal clear understanding of who, what, and why you’re hiring, define the new position and the scope of work.
You can start by outlining the tasks you want to delegate to your new employee.
If you’re pondering which tasks to offload to your new employee, consider using the six T’s:
- Tiny: Small, inconsequential tasks that add up
- Tedious: Simple tasks that aren’t the best use of your time as a business owner
- Time-consuming: Tasks that don’t require you to do the initial 80% of the work
- Teachable: Tasks that you can break down into steps and assign to your employee
- Terrible at: Tasks outside of your wheelhouse that don’t play to your strengths
- Time-sensitive: Tasks that compete with other priorities and need to get done ASAP
After you have your tasks laid out, create standard operating procedures (SOPs). While it requires more time upfront to do, it’ll save you loads of time as you onboard your employee and keep your processes running smoothly.
Once you’ve figured out which tasks you want to delegate, determine the type of employee you want to hire. This has two components.
The first is based on skill set. Ask yourself, “What skills does my employee need to have to complete my delegated tasks? What background and experiences are necessary for the role?”
This will help you figure out if you need to hire for a technical, marketing, administrative, sales, or service role.
The second component is based on time commitment.
In question form: Do you need to part-time or full-time help and can they work remotely?
Then, with those questions answered, start thinking about compensation.
Step #2. Set the compensation range
Your next step is to decide how much to pay your impending employee.
Start by considering your costs, which are more than just a salary if you’re taking on a full-time team member.
For instance, benefits can make up, on average, nearly 30% of your employee’s total compensation cost.
In the US, you need to consider paying with each employee paycheck:
- State payroll taxes
- Unemployment taxes
- Workers’ compensation
- Software and online business tools
The key here is to determine how much your employee’s compensation will cost you in total. Then, after that, figure out what salary you can afford.
It’s not just about how much you can afford, though.
Remember, you’re hiring on an employee to help grow your business, which means it’s worth paying your new team member more than simply what you can afford.
How much more?
To find out, we recommend checking out industry standards as a benchmark salary.
After all, you want to start your new working relationship off right, and a powerful way to do that is to prioritize fair and competitive compensation.
Sadly, not enough employers do this. A staggering 65% of employees are not satisfied with their pay rate.
What’s more, 49% of employed adults in the US think they need to switch companies altogether to get a significant bump in pay.
The lesson here is:
To keep your employee satisfaction high while maintaining their longevity as a team member, be sure to compensate them fairly. This means your business needs to be in a healthy position to afford competitive pay before hiring your first employee.
If this sounds kosher to you, you’re ready for our next step.
Step #3. Write a job description
Now that you have your job responsibilities and compensation range defined, it’s time to write an official job description to pull in applicants.
Baseline details to include in your job description are:
- Job title
- Job summary
- Responsibilities and duties
- Qualifications and skills
The key to writing a good job description is to speak directly to your candidate and be as clear as possible.
Which means cutting out the excess jargon like in this example description for an administrative assistant.
Straight and to the point, right?
It’s also a stark difference compared to this one-star-rated job description for the same position.
These job descriptions are, of course, teasers that need to be fleshed out to include the other elements in full form.
A great example and template to use is this job description for a marketing assistant. Notice how they’ve expanded on their summary to detail requirements and benefits in easy-to-read sections.
And easy-to-read is an important metric for a job description. If applicants can’t understand the job from the summary, they won’t be able to determine if they’re qualified for it or interested in it, either.
It’s a lose-lose situation.
So, keep your job description clear, to the point, and digestible.
Then, with that complete, start looking for people to fill it.
Step #4. Search for candidates
With job description in hand, you’re ready to hunt for the right candidate.
This may feel like the most daunting step since hiring someone perfect for the position isn’t the easiest task. 33% of small business owners can’t fill their job openings, and 23% claim finding qualified workers is their most important business problem.
In fact, by-and-large, underqualified applicants are a major hiring challenge for almost 40% of small businesses, according to this small business survey by Housecall Pro.
But not to worry, we’ve got you covered.
To recruit your ideal employee, one option is to reach out to colleagues and contacts in your network to see if they can refer anyone who fits the position. This is a decent option for finding trustworthy candidates who come recommended to you.
Another option is to post your job description on a job board like Indeed, which lets you post regular job postings for free. Sponsored jobs range from $0.20 to $5 per click.
Or you can try monthly service job boards like Monster, which charges $10 to $375 per posting depending on the number of postings your purchase.
If you’re looking for another free option, try posting your job description on Google for Jobs.
For remote employees, you can check out WeWorkRemotely, which charges $299 per month to post a job.
It won’t take you long to start getting applicants once you’ve published your job description -- especially if you followed our previous step and made your expectations clear. Once you’ve started accepting applicants, now it’s time to field them and start getting to know them better.
In other words, it’s time for the interview.
Step #5. Interview your candidates
As people send in their resumes and applications, it’s time to review the submissions and interview your top candidates for the position.
We recommend interviewing at least 3-5 candidates in the first round and 2-3 in the second. You can limit the first round of interviews to a 30-minute phone call as a general screening.
Some interview questions to consider are:
- Basic - What are your strengths and weaknesses? When were you most satisfied with your job?
- Career development - How do you continue to improve yourself? If you were hired for this position, what goals would you create for yourself?
- Behavioral - Tell me about a time where you had to deal with a conflict or problem on the job. What was the most difficult assignment you’ve received and how did you handle the issue?
- Additional - Who’s your favorite manager and why? What’s your biggest regret and why?
If you go beyond the basic and career development questions and dig a little deeper, you’ll get to know your candidates in a more interesting way.
For instance, Chief Business Officer at VSCO, Bryan Mason, asks his candidates his favorite interview question, “What are you really good at, but never want to do anymore?”
By asking this, Brian learns from his interviewee details about what they no longer deem desirable in a job and what they’ve learned about themselves. The question also tests their ability to speak with humility.
It’s important to get to know your interviewees beyond their resume because a shocking 85% of candidates lie on their resumes.
One way to get to know your interviewees a bit more is to ask them to take a test.
If it’s a technical position or specific skill set you’re hiring for, consider testing your interviewees on that topic.
For example, if you’re hiring for a writing position, a great option is to ask your candidates to submit a copywriting sample or write a blog article as a test.
(Depending on the scope of the project, you may want to reserve this for second or third-round interviews, as many candidates will expect -- rightly -- to be paid for hours of work.)
Or you can use a service like Codility to test your candidates’ coding ability if you’re hiring for a tech position.
The key with testing skills is to assign a task that’s as close to the actual on-the-job task as possible, which will give you a better indication of how they’ll perform in their role.
Even if you get a perfect test or trial assignment back, though, you’re not quite ready to make a job offer or choose a candidate yet. First, you need to screen your top-performing candidates by talking to anyone but them.
Step #6. Check references
We recommend whittling your interviewees to your final top two candidates and calling on their references.
Typical job seekers will provide you with three to four references to contact. Just be sure most of them are professional references, rather than personal, so you have a better understanding of how they’ll perform on the job.
Calling references is an important step because 34% of applicants outright lie about their experience, education, and ability to perform essential job functions.
Depending on the scope of work you’re hiring for, this step can be as straightforward as calling a few references and confirming their abilities, or it can be as intense as conducting an official background check.
If you want to look into background checks, you can use a service like ClearChecks.
Or Good Egg, which offers background checks, among other things.
OK. After references and applicable background checks, you’re finally ready to put your deal on the table and offer your top candidate a place in your business.
It’s exciting and relatively straightforward, but there are a few formalities to keep in mind.
Step #7. Choose your best candidate and make an offer
Now that you’ve confirmed your favorite candidates have a clean background and come highly recommended, it’s time to choose your best candidate and officially make an offer.
You can extend an offer letter simply by including details:
- Job title
- Start date
- Additional perks
Here’s an informal offer letter template that includes these elements as well as acceptance instructions.
It’s that straightforward -- and exciting.
Now, there are just a few more steps left to cover some backend logistics, starting with your legal records.
Step #8. Make sure your legal records are properly set up
If your preferred candidate accepts your offer -- congratulations, you’re getting close -- it’s time to get your legal logistics lined up.
For tax purposes in the US, you’ll need the following:
- Employee Identification Number (EIN) - Also known as a federal tax ID, this nine-digit number identifies your business.
- Form W-4 - This withholds the proper amount of federal income tax from your employee’s pay once a year to your state and federal governments.
- Form W-2 - This goes to the Social Security Administration to share your employee’s payroll taxes once a year to your state and federal governments.
- Form I-9 - This verifies your new hire’s employment eligibility.
It’s best to be thorough when filling your tax documents to make sure the government doesn’t come chasing you down for their share of tax revenue.
After all, payroll taxes make up a significant portion of the federal budget. They do in the US, anyway, contributing 35.2% of all federal revenues.
For some forms, such as the I-9, you have a very short window for which to report this information, so it’s definitely something you want to have ready to go before or shortly after your employees come onboard.
The same is true for workers’ compensation coverage.
Step #9. Get workers’ compensation insurance coverage
Once your legal ducks are in a row, make sure you have insurance coverage for workers’ compensation.
In the case of a terrible accident or injury while on the job, workers’ compensation insurance will protect you from legal liabilities. The US federal law requires you to have the insurance policy, although you administer the benefit with your state.
In the US, the requirements and options vary from state to state, so you may want to review state by state workers’ compensation laws, but most states require some form of coverage.
Yes, you need it even for hiring virtual assistants or other remote positions.
Depending on your state, other US required employee benefits to consider are:
- Disability benefits - Social Security pays disability benefits to employees who can’t work because of an unexpected medical condition.
- Leave benefits - Some employers allow their employees to take time off for various medical and family-related reasons.
That said, even if it’s not a requirement, it’s worth looking into additional benefits for your employees.
Why? Benefits make for happier employees. So much so that 72% of employees claim that having more work benefits would increase their job satisfaction.
The vital point here is to, again, do your due diligence and research insurance coverage requirements. Just as the tax laws vary across countries and states, so do the benefit plan requirements.
OK, you’re almost there. Just one final step of working out payroll details.
Step #10. Choose a payroll system
Your final step in the hiring process is to decide on a payroll service so you can pay your employee in a timely manner.
You can either do payroll yourself, through an accountant, or use a payroll service.
If you’re looking for a payroll service, check out Gusto, which charges a base price of $39 per month, plus $6 per month per person paid, for their “Core” plan designed for smaller teams.
Another option is Square Payroll, which charges $29 per month, plus $5 per month per person paid.
For a bookkeeping software that allows you to add on a payroll service, it’s worth checking out QuickBooks, which charges $35 per month, plus $4 per month per employee, for their self-service payroll feature.
If you’ve made it this far, you’ve completed everything you need to officially hire your first employee -- a job well done indeed.
Time to officially hire and onboard your first new employee
Hiring your first employee is an exciting milestone to reach for your business.
It doesn’t have to be an overwhelming one, though. And once you’re through it, you’ll be on the road to avoiding burnout and watching your business scale with an extra set of hands.
Especially if you hire the right person who frees up your time to focus on growing your business.
Let’s recap for you:
- To hire your first employee, start by clearly defining the new position. Include a compensation range and write an official job description.
- Your next step is to hunt for the right candidates using your own network and job board. After combing through submissions for the role, conduct interviews.
- Once you’ve selected a handful of promising candidates, be sure to check references for your top two candidates.
- Then choose your best candidate and officially make an offer. If they accept your offer, make sure your legal documents are properly set up.
- Your final two pieces to put in place are workers’ compensation insurance coverage and payroll service.
Ready to bring on your newest team member? Great -- your business awaits the extra help (and growth).
For even more support, take advantage of an all-in-one platform. With a 14-day free trial, you’ve got nothing to lose and only more help to gain.