Hiring Your First Employee: From Fears to Cheers
So you’ve started your business and you’re at the point where you as one person can’t do all the work yourself. You want to keep growing your business but don’t know how to move forward! This is my favorite time to engage with a client. Hiring your first employee is a huge milestone but that doesn’t mean it isn’t completely terrifying. Taking on more responsibility can be hard, but hiring your first employee is also an extremely exciting time in your business. Let’s discuss some tips and tricks for hiring employee #1.
Cost: This is usually the #1 concern. How will I afford another person? The goal is for this employee to eventually pay for themselves, whether it’s direct business they’re bringing in or indirectly by allowing you more time and space to bring in more business yourself.
Job Description: Start with your needs. Make a list of things you could offload and what you would like to do. From here you should have the bones for a job title and description. Most first employees have unique job titles and responsibilities so it may be best to engage an outside resource at this time (HR consultants are the perfect solution! *wink wink*) Consider the location of this ideal candidate as well. Are they fully remote? Do they need to be in person? Remember, each state has unique labor laws.
Setting Up Payroll: When it comes to setting up payroll, I turned to Sheila Hansen, CFO, CPA, Coach & Founder of Sheila Hansen LLC, for some advice:
“Before hiring your first employee, you will want to get registered and set up for required taxes and compliance. This includes having a Federal EIN with the IRS and state tax accounts for withholding. Depending on your state, there may be other requirements for unemployment and benefit offerings. Look into and select a payroll software to assist in calculating paychecks and filing returns.” This is why outsourcing is helpful!
Also, don’t forget about Workers Comp. insurance. Some states (including NY & NJ) have a 1 employee requirement.
Interviewing: When interviewing, it’s important to keep your questions consistent with each candidate and make sure to stay away from personal questions such as age, marital status and sexual orientation. The EEOC has a great FAQ on this if you need a refresh. In many states it is also illegal to ask how much a candidate is currently making. Each state has different requirements, so make sure to be mindful of this.
Offer: You did it! You found your magical unicorn that will help you grow your business. Your first inclination is to send an email with the offer in the body and be on your way, but I would rethink that. You will want an offer letter template in place that lists all the terms of the employment, as well as recognizing you are “at-will” and having space for the employee's signature.
Additionally, there are tax forms and I-9 verifications that need to be completed, as well as some state specific notices.
Policies: When you have one or more employees, setting up policies and procedures are a must. An Employee Handbook is the best place to start. This will capture all Federal, State and Local policies as well as provide business specific guidance such as an intro to your company, your mission/vision/values (don’t have that? No problem, we can build that together!), and any other unique programs that make your company yours.
Hiring your first employee is a big deal, and it's totally normal to have a mix of emotions. Excitement, fear, uncertainty—it's all part of the journey. The good news is, you don't have to navigate it alone. Bringing in an outside resource to guide you through this process can be a game-changer. This is a pivotal moment for your business. From Job Descriptions to the Offer and providing all templates needed, I have your back! Let’s build your dream team!
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