How to Hire Your First Employee

 
Ask Yourself These 5 Questions Before Hiring

Before brainstorming a job description, you want to understand exactly what skills and experience you need in your first employee. You also want to determine where and how they’ll work and what you’ll do to set them up for success. 

1. What Am I Looking for in My First Employee?

Do you need an employee with unique skills and expertise? Or do you need an assistant who can tackle day-to-day tasks like answering emails and setting appointments? 

There’s no right or wrong answer to these questions. Instead, the goal is to understand what you need from your first employee so you can write a job posting that attracts candidates with the right skills and experience.

2. Can I Afford to Hire Someone?

Financially, there’s more to hiring your first employee than setting a salary or hourly rate. 

You’ll also need to consider benefits and employer-paid taxes, like Social Security and Medicare. Hiring an employee might also come with costs like payroll expenses and possibly outsourced HR and accounting services. 

Make sure you have enough work to support someone in the long run. If not, you may be better served by a short-term contractor, which we’ll cover in a minute. 

3. Do I Want My First Employee to Work On-Site or Remotely?

One of the most significant hiring trends is that more and more employees expect to work remotely full-time or at least a few days a week.

Can you offer that type of arrangement? A lot will depend on the nature of the position. Healthcare, retail, and manufacturing jobs typically have to be performed on-site. The same goes for cleaners and maintenance specialists.

How the work gets done will also affect whether your first employee should work on-site or remotely. If your company uses specialized technology that can only be accessed in the office, you can’t accommodate remote workers. You may also need people on-site for meetings and other collaborations that can’t be done on a Zoom call. 

Finally, consider the culture of the company you’re building. If you want to foster flexibility and autonomy, a remote or hybrid work environment will align more with that vision. 

4. How Will I Onboard and Train New Employees?

In addition to salary, benefits, and accounting services, there are non-monetary costs to consider. Employee onboarding and training take time. You’ll also have to allow the person to get the lay of the land and understand their new role. 

You can save time by developing an onboarding and training process that helps new employees understand their responsibilities and how they contribute to your organization’s success. 

And as a friendly reminder, be patient with your first hire. According to a Gallup report, new employees often take two months to hit their stride.

5. Should My First Hire Be an Employee or a Contractor?

Good question. If you’re grappling with whether your first hire should be an employee or a contractor, you’re facing a significant choice.  

What’s the difference?

An employee works for you. You define their tasks, set their schedule, and lay out all the rules for where and how work is done. You’re responsible for their wages, benefits, and tax contributions. You also provide them with the tools for success, such as laptops, phones, and software access.

Employees who meet the necessary qualifications may be eligible for paid time off and unemployment benefits based on your state’s guidelines. 

Contractors, on the other hand, are business owners (just like you!). They work for themselves, set their own terms and rates, and cover their own taxes, benefits, and equipment. 

Contractors may be more skilled in their expertise as they typically specialize in one or two core services. When working with a contractor, you usually have to sign an agreement outlining the terms of the service, how long the engagement will run, and other details related to the project’s scope. 

So, what’s best for your first hire? It all depends on your needs.

Hiring an employee means having someone dedicated exclusively to your business who is more invested in your company’s success. Hiring a contractor typically involves less employer commitment than hiring a full-time employee, offering more flexibility in terms of engagement and responsibilities.

Hiring Laws and Regulations

If you decide to go the employee route for your first hire, you’ll have to consider multiple laws and guidelines, including:

• Anti-discrimination laws protect candidates from being discriminated against based on their race, religion, sex, or national origin. 

• Equal Employment Opportunity Commission (EEOC) and Americans with Disabilities Act (ADA) compliance ensures candidates and employees with disabilities receive reasonable accommodations and aren’t subject to discrimination.

• Fair Labor Standards Act (FLSA) establishes the minimum wage you must pay employees, including overtime.

• Family and Medical Leave Act (FMLA) requires employers to provide eligible employees with unpaid leave in case of a family or medical emergency. 

• Occupational Safety and Health Administration (OSHA) established regulations to ensure a safe workplace for you and your employees. 

• Workers’ compensation laws apply to employees who get injured or sick on the job—your business may have to compensate them during their recovery. 

• Immigration laws ensure that all new hires are eligible to work in the United States—keep in mind many states have their own guidelines for immigrant workers.

• The Employee Retirement Income Security Act (ERISA) requires employers offering benefits like health insurance or retirement contributions to comply with ERISA regulations.

Lastly, your state, county, and city may have additional regulations affecting your hiring process and working environment. 

Tips to Make Hiring Your First Employee Easier

There’s a lot to think about when hiring your first employee. Here are a few tips to help make the process easier.

Set Up Your Employer Identification Number (EIN)

An EIN is like a Social Security number for your business. The IRS uses it for tax purposes. You’ll also need an EIN for payroll taxes and to sign up for a business bank account or credit card. Getting one is relatively straightforward on the IRS website. 

Talk to an Accountant

With employees, as opposed to contractors, you must withhold part of their salary to cover Medicare and Social Security payments. You may also be responsible for payroll and unemployment taxes.

Talk to an accountant specializing in these areas can help ensure you have all your bases covered before the hiring process begins. They can also help you understand if your business qualifies for tax credits and programs that reduce financial responsibility. 

Decide What Insurance You Need and Want

Some insurance programs, like workers’ compensation, are a must-have. You can also sign up for additional programs to protect your business. These include general liability, professional liability, and bonding insurance. 

Talk to an insurance broker who specializes in small and growing businesses. They can also help you understand your options for offering employees health and dental benefits. 

Familiarize Yourself With the Employee Eligibility Verification Form

The Employee Eligibility Verification (aka the I-9) form is used to verify that your first hire is authorized to work in the United States. You can also use the government’s E-Verify system to confirm employment eligibility.

Wize Words

Securing the first, second, and third hires is just the start of the adventure. You are laying down the groundwork for crafting a great team. With each new addition, you’re adding different perspectives and expertise to the mix.

Helen Anne Travis

Helen Anne Travis is a seasoned journalist with an extensive portfolio that includes contributions to renowned media outlets such as CNN and USA Today. Her writing expertise extends beyond journalism, including projects with organizations like M.I.T.