8 Considerations When Hiring Your First Employees

Millennial Magazine - hiring your first employees

For solo entrepreneurs, the idea of hiring employees can be intimidating. There’s much to consider from an operations and process standpoint and the emotions associated with not being in complete control of your business. 

While hiring your first employees can feel daunting, it’s eventually necessary for business growth. Here are eight considerations when hiring your first employees to make the transition easier and more efficient.

Clarifying and Outlining Roles

Start by outlining what gaps in your business you intend to fill by hiring talent. Start with the tasks that you neglect when you’re busy as a solo entrepreneur, such as consistently posting social media content or updating your accounting. Then, outline tasks you find time-consuming or burdensome but necessary.

Sometimes you’ll be clear on a specific role before you decide to hire an employee— for example, you might determine you need a salesperson to help expand your customer capacity. However, this exercise still has value as it will help you clarify the responsibilities and skills required as you create a job posting.

Choosing Employment and Contract Terms 

Another integral consideration when hiring employees for the first time is the employment and contract terms. You’ll also want to use this exercise to outline your hiring budget, as that will create limitations.

There are several employment and contract terms to consider when hiring. 

Full-time or part-time permanent employees are hired with the intention of being around for the foreseeable future. Conversely, hiring a term contract employee gives you some freedom in deciding whether to renew their term or end the employment with minimal fuss.

Contractors and freelancers are independent workers who get paid as vendors rather than employees, simplifying payroll and taxation. However, you’ll likely be one of many clients and must stick to a predetermined scope of work. 

Many entrepreneurs hire employees for a contracted term or work with freelancers as their first hires. Doing so helps determine long-term needs and clarify roles before committing to full-time permanent employees.

Payroll and Taxation Considerations

When you hire an employee, you must adhere to payroll and taxation regulations. This means ensuring you have a proper payroll program in place and comply with deductions and government remittances. You’ll need to take the time to understand your legal obligations, and the nuances of payroll, like the difference between payroll vs income tax, vacation pay, etc.

If you plan on hiring employees rather than independent contractors, it’s worth meeting with an HR consultant or payroll specialist in advance. You might determine that it’s better to outsource this service or invest in payroll software. 

Clarifying Insurance and Compliance Needs

When people work for you, your insurance and safety compliance rules will change. Things like workers’ compensation and disability will impact how you operate your business. Having an employee in your home office or driving your company vehicle could increase your liability if an accident occurs, meaning you need more coverage. 

Talk to your insurance provider before hiring an employee to determine what coverage you require. Then, take some time to understand the local labor board standards and workers’ compensation laws.

Creating Systems and Protocols 

If you’ve been working alone this whole time, you likely have some routines in place that fit your schedule. Now that you’re expanding your team, you’ll need to rethink your systems and protocols to make them accessible to others.

Start by outlining a recruitment and onboarding protocol for the hiring process. Determine what the interview process will entail and how you’ll take a non-discriminatory approach to find the best fit. Then, outline what existing processes will be impacted in your business and create standard operating procedures (SOPs) to streamline the onboarding process.

Evaluating Skills and Potential

One of the biggest mistakes you can make when hiring your first few employees is choosing people just like you. Build a diverse team that brings new perspectives to the table and challenges your way of thinking.

While having some basic skills might be essential for your new hire, consider looking beyond the resume and hiring for potential. Someone eager to learn and take on new challenges will always add value to a business.

Putting Legalities in Place

In addition to the legalities around compliance and insurance, you also want to protect your ideas and intellectual property. Consult with a lawyer to create an employment contract that protects your financial information, new product ideas, etc. Consider including a non-disclosure agreement (NDA) and non-compete clause.

Learning to Let Go and Delegate

Perhaps the biggest challenge when hiring your first employee is delegating and letting go. It’s important to set boundaries for yourself as a boss and help nourish growth rather than micro-managing.

Create a coaching culture within your business. Empower your employees to approach you when they feel limited and to take ownership of their work. If you’re welcoming someone into your business, truly welcome them and give them a voice. Understand their personal and professional goals, and see how you can help them on their journey to accomplishment.

Hiring employees will help you expand your business and make room for growth. Take your time in working through these considerations to find the right people for your business.

What do you think?

Written by Marni E. Goldberg

Marni E. Goldberg is a journalist covering the financial market and graduate of Wharton School of Business. She loves cooking, travelling in her spare time, and spending quality time with her family.

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