What Every Entrepreneur Should Know About Hiring Employees
Most entrepreneurships start as a solo operation, which can be a long, difficult, and lonely journey at times. But eventually, a business must sink or swim, which means growth or failure. That’s when it’s time to hire extra help, to prepare for a scale-up.
As an entrepreneur, it’s one of the most difficult steps of running a successful business. You’re essentially handing over the reins, so you need to take a measured risk. Who can you trust? How do you find reliable and hard-working employees? What else do you need to know?
1. Prepare for a Workforce
Before you can even begin your search, there are some things you’ll need to square away. Local and federal regulations, for example, may dictate that you have documented payroll policies, workplace safety guidelines, and even diversity policies in place.
If it’s not something you want to get involved with, or you’re uncomfortable with the idea, then the first employee you hire should be an HR expert.
The United States Department of Labor has an extensive guide on the major laws you’ll need to know and follow. From wages and benefits to fair standards for protected minorities, including veterans.
2. Research the Ideal Candidates
Most likely, you will be finding a stand-in for yourself, to handle the duties you’ve been conducting for months or even years up to this point. That means you should hire employees that are as smart and skilled as you, or better if you can help it.
You’re not bringing on employees to micro-manage them and steal time away from your other responsibilities, you’re doing it so you can delegate as much work as possible. That means hiring people you know you can trust. What kind of skills and traits are necessary for the job? What kind of experience should those employees have? Are you looking for someone with a degree, and in what field?
If you need help establishing a baseline you can look at some competitors and other businesses in the field. What kind of professionals do they hire? What requirements and experience do they look for? Bear in mind, you want to do better so it’s okay to increase your standards if you think it will help.
3. Create the Workplace
Up until now, it’s probably just been you, or maybe a couple of others. Accommodating new employees means expanding the workplace, and outfitting it with the necessary equipment. How many new desks or workstations will you need to install? Are there any new computers or technologies you need to order? Where will those new employees be working?
With the recent pandemic, many businesses have shifted to remote operations, allowing employees to work from a home office or off-site location. Even before COVID, however, the number of remote workers grew by 173% between 2005 to 2018. It shows that it’s a viable strategy within certain industries, and could be something to consider for your business.
Before onboarding new candidates, consider where they will be working, and whether or not you need new supplies, a bigger space, or a unique configuration to preserve their productivity.
4. Understand the Classifications: Contract vs. Freelance vs. Traditional
Just as there are many different types of entrepreneurship — from soloships and innovators to one of the 31.7 small businesses in the US — there are many types of workers.
Part and full-time workers aren’t the only options available to you. You may also hire contract workers for a specified period, usually, this is done seasonally. Or, you can hire freelance professionals, who work for a rate, as opposed to a wage or salary. The type of worker is largely going to depend on the business, but there are some exceptions. You do need to understand the difference between the classifications, and how it applies to federal regulations. Freelancers, for instance, are responsible for their own medical insurance and retirement benefits.
Creative work like writing, design, and sometimes development is very open to freelancers and contractors. Busy work, like manning a cash register, cleaning a store, or various physical activities are generally relegated to part and full-time employees.
It’s also possible to transition between the various roles. For example, you might hire an employee on a contract basis to start, and then extend a full or part-time role if you’re happy with their work.
5. Hire the Employees
After everything is in place, it’s time to finally hire employees. Consider how many you’ll need, rotating shifts, whether or not business hours will change, and what roles will be necessary. Will you be outsourcing some of the work to third parties? Will you need to hire across multiple roles like shipping, order fulfillment, retail, maintenance, and so on?
Build a temporary model of the business, in action, to ensure you identify the appropriate roles, quantities, skills, and responsibilities. You might also consider hiring reserve employees to step in, if you find there’s not enough manual labor. That’s when contract and freelance workers come in handy.
Hiring Your First Employee is an Involved Process
It may seem like it’s easy to post a job opportunity and bring on your first worker, but there are a lot of different elements to consider. What are the state and federal regulations of employee-run businesses? What benefits and support do you need to have in place before bringing anyone on board?
What skills and traits should you be looking for in potential candidates? Where will they be working? Will you need a new office or store to accommodate more employees? Will they be working remotely from a home office? What types of workers are you interested in hiring, freelance or traditional?
When all of those considerations are out of the way, it’s time to bring on your new employees. That is also more involved than one might think. You need to consider how many workers you need, what you will be paying them, and whether or not you’re going to outsource some of the work?
Proper planning leads not just to a more successful business, but also in choosing the right candidates for the job.
Guest Post by Eleanor Hecks
Eleanor Hecks is editor-in-chief at Designerly Magazine. She was the creative director at a digital marketing agency before becoming a full-time freelance designer. Eleanor lives in Philadelphia with her husband and pups, Bear and Lucy.