Between recruitment, screening, training, taxes, and benefits, hiring a new employee can cost upwards of $4,000 per employee (Entrepreneur). In the early stages of your new business, your first employees represent a significant investment of both time and money. That is why it is imperative that your hiring strategy is geared towards finding and keeping individuals that will benefit your business.
While each business’s strategy will differ based on their needs, budgetary limits, etc – there are a few integral pieces of this puzzle: preparation, industry recruiting, screening measures such as reference and background checks. Consider how these will improve your hiring strategies.
Preparing for New Employees
Before you hire your first employee, you need to prepare your business to receive them. This includes consulting with a lawyer to set up employment terms or contracts, developing position descriptions and responsibilities, and setting up your employee payroll software. You must also:
- Obtain an Employer Identification Number, set up tax withholding, and prepare to file taxes.
- Obtain workers’ compensation insurance and any other insurance that may be required by your state or industry.
- Ensure that you are compliant with minimum wage, hour wage, and equal pay laws.
Recruiting Within the Industry
When recruiting for your first class of employees, you need people who know what they are doing, are familiar with the industry, and will be able to help lead your business to sustainable success. What type of employee have other businesses in your sector hired?
Consider your industry partners, and tap into your network to begin the process of recruiting. Your employees may end up wearing many hats, so hire someone who is familiar with the workings of your industry, rather than hiring strictly for experience within a particular position.
- Post notices on industry job boards and professional networks and be sure the job description is accurate; on the Resource Nation blog, we suggest, “It is crucial to be specific when constructing a job listing with the intention of enticing potential employees. A job description too brief will attract confused, unqualified, and ill-equipped applicants.”
- Look for individuals who are enthusiastic about your business and want both you and your company to succeed. Without that inner enthusiasm, it may be difficult for the employee to work hard and help make your business a success.
Screening New Hires
Hiring the wrong employee can cost your business money it doesn’t have in order to find a replacement. Part of the price of a hiring error is a loss of confidence and productivity as you begin the hiring process all over again. This price can drastically increase if your mis-hire goes out with a bang – alienating customers, stealing from the company, or causing damages for which your business could be held liable.
This is why employee screening is such an important part of the hiring process. You must weed out potentially detrimental applicants from your hiring pool, and in order to do so, you need more information than can be found on their application or during their interview.
- Background checks can confirm the information presented in an applicant’s résumé. Since 40% of job applications contain bogus or inflated facts, a simple confirmation of work and education history can help you immediately disqualify dishonest candidates.
Because finances are tight when you are in the early stages of your business, you may not wish to commit to hiring employees full-time before you have confirmed that they will benefit your business. In this case, you can vet potential regular employees by taking them on as temporary workers.
If you do this through a temporary staffing agency, you can also free yourself of the responsibility for paying benefits and taxes on those employees. However you take on your new employees, make sure that they are familiar with your industry, have passion for your business, and have been screened with a background check.
Megan Webb-Morgan writes for ResourceNation, a B2B lead generation company. For more information, news and advice follow them on Twitter and Facebook.
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