How To Hire Your First Employee: 7-Step Process
You're a small business owner and your business is growing, you’re tired of working 12-hour days, seven days a week, and you’ve decided you need help.
Maybe it’s help with those simple but time-consuming administrative tasks, or with growing sales or developing products. Regardless of who your new employee is and what they’ll be doing, you want to make sure you’ve covered all your bases, dotted all your I’s, and crossed all your T’s.
If you’re ready to hire your first employee, and you don’t want to mess it up, this is the guide for you.
Why Hire An Employee?
Hiring someone is a major responsibility and cost, so why do it?
- Enhanced productivity: With additional manpower, projects can be completed more efficiently and effectively, boosting overall productivity.
- New ideas: New employees bring fresh viewpoints and innovative ideas, potentially leading to creative solutions and improvements in processes.
- Specialized skills: New hires with specific expertise can fill gaps in your team's skill set, enabling the organization to take on new projects or improve existing operations.
- Reduced stress: Sharing the workload can decrease stress levels and promote a better work-life balance.
Responsibilities Of Hiring Someone
Of course, employing someone is a significant undertaking. Suddenly, you’re responsible for:
- Fair compensation and payment: Paying employees fairly and on time and adhering to minimum wage laws, overtime regulations, and tax withholding and reporting.
- Safe working conditions: Providing a safe and healthy workplace that complies with occupational health and safety laws.
- Reasonable accommodations: Provide reasonable accommodations for employees with disabilities, as required by law.
- Benefits: Offer benefits such as health insurance, retirement plans, and paid leave as applicable and promised in employment contracts.
- Work-life balance: Support work-life balance through reasonable working hours, flexible scheduling, and leave policies.
- Training and career development: Provide necessary training to help employees perform their jobs effectively and safely and provide opportunities for professional growth and career development.
Utilizing small business recruitment solutions can make hiring your first employee a seamless experience.
How To Hire Your First Employee: 7-Step Process
First-time employers can benefit from staffing conferences where they learn effective strategies for making their first hire. But I have an easy run-down for you to use here, too. Follow this 7-step process to successfully hire your first employee.
1. Prepare the business legally
Before hiring anyone you need to ensure you’re legally registered as an employer and have the infrastructure to pay people etc.
Admin, yay!
Fortunately, it’s not that complicated:
- Establish your business entity: First, you need to legally establish your business. This could involve registering as a sole proprietorship, partnership, LLC, or corporation. The structure you choose will affect your taxes, liability, and other legal aspects.
- Obtain an employer identification number (EIN): Apply for an EIN from the Internal Revenue Service (IRS). This is a unique number that identifies your business for tax purposes and is required to report information about your employees.
- Register with state agencies: Depending on your location, you may need to register with various state agencies:
- State Labor Department: For unemployment insurance.
- State Tax Agency: To handle state tax withholding.
- Workers’ Compensation: Register for workers' compensation insurance, which is mandatory in most states.
- Set up payroll and withhold taxes: Establish a bi-weekly payroll system to withhold federal and state taxes. These include income tax, Social Security, and Medicare. Regularly remit these withholdings to the IRS and your state tax agency.
- Post required notices: Employers must display certain labor law notices in their workplace, informing employees of their rights under labor laws. These notices vary by state and the type of business.
- Comply with occupational safety and health regulations: Understand and comply with the Occupational Safety and Health Administration (OSHA) regulations to ensure a safe working environment.
- Follow labor laws: Be aware of various federal, state, and local labor laws, including those regarding minimum wage, overtime, employment discrimination, and family leave.
- Create an employee handbook: While not legally mandatory, having an employee handbook can help clarify your company's policies and procedures and ensure consistent application of the rules.
- Seek legal advice: Consider consulting with an attorney who specializes in employment law to make sure all legal requirements are met and to stay updated on legal changes.
2. Write a clear job description
You’re aware of the skills you’re lacking to develop your business and you know the profile of the person you want to attract.
Time to write a job description!
A job description (JD for short) is a document that outlines the job requirements, skills, qualifications, activities, responsibilities, and duties of a specific role within a company. It may also include details like the salary range (indeed this is legally required in some states).
The purpose of a JD is to advertise your role to potential candidates and inform them about the role and your organization.
It should have enough information to pique a job seeker’s interest and motivate them to move forward with the hiring process.
It's also a chance to provide a glimpse into your company's culture, mission, and values.
With that in mind, here's how to write one.
- Create a simple and easily understood job title
- Define responsibilities and outcomes
- Outline the necessary skills and attributes
- Highlight why your company is a great place to work.
For a deeper dive, check out Mariya Hristova’s excellent article how to write a job description.
3. Find candidates
Armed with your job description, it’s time to market your role and maybe headhunt some candidates too. If you're budget for recruitment permits, using a mix of these methods to build your candidate sourcing strategy will yield better candidates.
Some potential spots you can post your job description and hunt for peeps.
- Your website (use this guide to help you make an attractive careers page).
- Online job boards: Indeed, LinkedIn, Glassdoor etc. Take some time to research which is best for your industry and role.
- Social media: Instagram, Facebook, TikTok
- Professional associations: Many professional groups and associations have their own job boards or newsletters where you can post jobs targeted to professionals in specific industries.
- Online communities: find out where your potential hires hang out and see if you can post your JD there. If the rules aren’t clear, make sure you ask permission first!
- Recruitment agencies: These can be particularly useful for specialized roles or to handle the hiring process on your behalf. They often have access to a pool of vetted candidates.
- College and university career services: For internships and entry-level positions, connecting with colleges and universities can help you tap into a pool of fresh talent.
- Recruitment events: There are many recruitment events aimed at different candidate groups. For example, there are recruitment fairs for grads, start-ups, tech-specific roles, etc.
- Internship programs: A strategically aligned internship program helps recruit talent, brings fresh ideas and perspectives, and positively impacts your employer brand.
- Returnship programs: A form of paid internship designed specifically for individuals who have taken a lengthy career break or are underemployed.
For more depth, check out these useful articles on recruitment marketing and candidate sourcing.
4. Screen candidates
Now you’ve received some applicants, it’s time to sort the wheat from the chaff so to speak.
This is part art, part science, and I recommend reading Mariya's article on candidate screening, but here are some general best practices and things to look out for:
- Are there mentions of the right skills?
- Are there mentions of the right skills in unexpected ways?
- Can you research if they have the right skills?
- Has the candidate stated their title and responsibilities in each role clearly?
- Is there a focus on outcomes and understanding of their work’s impact?
- Does the CV clearly outline what their career path has been so far?
- Are the right skills and experience that you’re looking for contained in the CV?
- If the background (e.g., size of company, location, etc.) are important for the role, are those requirements covered?
- Unless it makes it illegible, remember that sometimes your applicant tracking system (ATS) can screw up the formatting of a CV.
5. Interview candidates
Now odds are that, at some stage in your career, you’ve left an interview not really knowing what to think.
Perhaps there’d been a mix-up with the role, or the questions asked were a bit strange and irrelevant.
Interviews are a two-way street. Of course the candidate has to impress, but they’re also evaluating you as well. Interviews are fundamental to a great candidate experience!
Like most things, the key to conducting a good interview is in the prep. I highly recommend reading Mariya’s in-depth guide on how to interview someone, but here’s a summary to get you started.
Step 5.1: Setting out an aim
The first step is to set out an aim for your interviews. Is the purpose to test technical competency or behaviors or maybe both?
In order to understand this, first write down everything you need to know about someone to be able to confidently hire them into the position. This should be the basis of both the interview structure and content.
Next, prioritize which questions you need the answers to the most so you can spend the most time there and start creating the question templates.
Once you have set out the aim, which informs the design of your questions, you can think about what the structure needs to be.
Mariya recommends structuring the interview like a funnel, starting with the most must-have skills in the first stages, and moving towards the optional ones in the next stages.
Step 5.2: Preparing questions
The key to a great interview question is engaging the candidate in a conversation.
To achieve this, ask open-ended questions (Who, When, How, Why, Where) or ask for examples. This will result in longer answers that will get a lot more value from the in-depth detail.
Use these questions to understand the person's experience and decision-making. I have learned so many things from interviewing people!
The next most important thing: peeling the onion aka follow-up questions.
These mark the experts in their field and help the people with the most potential to stand out. Usually, if someone is trying to make up a story to pass off as if they have experience, they fall through on the 2nd or 3rd follow-up.
6. Making an offer
You’ve done a lot of hard work posting job descriptions, sourcing candidates, assessing them, and keeping them engaged throughout your hiring process.
The selected candidate is a great match, so you’d like to make them a job offer. Exciting times! But how do you approach the offer and potential negotiation?
Hint—the process started way back in the hiring process!
Again, I recommend reading Mariya’s article on how to make a job offer for a full run-through, but here are some best practices:
Build rapport
Building a rapport and relationship with the candidate is important so you can understand them and their motivations for a potential move.
While compensation will always be an important factor (people have bills to pay!), there will likely be other factors influencing the decision e.g. commute time, development opportunities, flexibility.
It’s your job to find out what they are so that you can see if your job offer matches those requirements too.
“Sell” your organization
“Sell” is in quotation marks because this is quite different from selling tomatoes at the market!
First and foremost, your job should be to provide information.
Now that you have an idea of what their motivators are, here are some ideas on how to connect them with your company:
- Talk about your company’s potential, your latest roll-outs or fundraise, and your ambitions
- Scope the opportunity—don't be afraid to help candidates do the math about the potential of the market!
- Share the product roadmap, future of what you are planning to build, and how this role will fit in
- Talk about the other people on the team and their caliber
- Talk about development (not necessarily career progression) and the things candidates could learn (and what you can learn from them in return). Rather than progression frameworks (there's too much uncertainty for that), perhaps tell your own growth story at your company in terms of impact and responsibility.
- Talk about how you and your team live your values every day e.g. a time when you or someone on your team used your values to drive decision-making.
7. Onboarding
It’s a match! The candidate has accepted your offer and you’re willing to give each other a try.
But, you know, nothing’s set in stone and you want to continue the great experience they’ve had so far.
The most important things you need to focus on here are being clear on what the next steps are and getting everything prepared legally.
Some best practices:
- Be in touch with the new hire regularly.
- Ensure that as much documentation is completed as possible before the hire starts.
- Make sure you talk (not text or email) the candidate through this part of the process. Waiting to start a new job is a strange time so engage with them.
- Get as much automation as possible in this part of the process that your systems will allow.
- Make sure it's super clear to the new person what will happen on their first day/week/month.
Some further resources here are our guides to preboarding, creating a 30/60/90-day onboarding plan, and completing all the necessary new hire paperwork.
Hiring Your First Employee: Best Practices
People are people and they do strange things. What motivates them isn’t always clear and life happens.
Successful recruitment is built on trust, transparency, organization, grit, and communication.
Here are some best practices to help you attract and retain the talent you need
Create an employer value proposition (EVP)
An EVP is a set of unique benefits and offerings that an employer promises to deliver to its employees in exchange for their skills, expertise, and commitment.
It's essentially the value that an organization provides to its employees in return for their contributions.
The EVP helps attract, retain, and engage talent by effectively communicating and driving what makes the organization a desirable place to work. It encompasses various components such as:
- Purpose, vision, and mission
- Organizational values
- Total compensation
- Culture
- Career development opportunities
- Flexibility
- Work-life balance
- The overall employee experience.
For a deeper dive, I suggest Mariya’s excellent guide on creating an EVP.
Cultivate a strong employer brand
Following on from your EVP creation is your cultivating your employer brand.
In essence, your employer brand is your reputation as an employer. It’s how you present yourself on your socials, job descriptions, interviews, and anything candidate facing.
It’s also how you conduct yourself as a company. Are you ethical, are workers treated well, do you live by your values?
One quote that has always stuck with me regarding branding is from Warren Buffet: “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently.”
For a deeper dive, check out Mariya’s guide to employer branding.
Use a structured interview process
We touched on the importance of interviews above and I’m reiterating here.
Building a consistent interview structure is important to ensure that all candidates are evaluated based on the same criteria. This helps create a consistent candidate experience and can help reduce biases and make the process fairer.
Leverage technology
During the early days, you can probably get by with a simple employee management system to help you build your team.
However, if hiring picks up there are some useful tools to help improve the process for all involved parties.
The undisputed king/queen of recruiting software is the applicant tracking system (ATS). These systems use automation to help post jobs, schedule interviews, track and communicate with candidates throughout the hiring process, screen resumes, and interpret feedback.
For more, check out our pick of the best applicant tracking systems.
Leverage professionals
Hiring is notoriously tricky, especially the sourcing part, so sometimes it’s beneficial to hire or contract a professional. You have a few options here:
- Build an internal recruitment team.
- Make sure of a specialist recruitment agency, either on a retainer or pay-on-delivery basis. These tend to be especially handy for recruiting executives or tough-to-find candidates.
- Make use of a professional employer organization or employer of record. These are particularly useful for recruiting talent outside of your home jurisdiction where recruitment compliance can be tricky.
For more, check out our article on how to hire a recruiter.
Learn More About Hiring
If you're looking to keep up with all the latest developments in hiring, there's a few things you can do.
One is to consider taking a hiring course that will help you keep all the latest technology and market demands in perspective as it relates to your business.
The other is to subscribe to the People Managing People newsletter. We're always working to keep our finger on the pulse of what's happening in hiring and sharing insights we gain from panel discussions and interviewing experts and you can get it all straight to your inbox!
