Written By: Michael Gardon
Your business is growing–that’s the good news. Here’s the tricky part: you’re starting to realize that you can’t possibly do it all yourself. That’s when you know that it’s time to hire your first employee.
But if you’ve never hired anyone before, this can be a daunting process. How can you be sure that you find the right person, make an attractive offer, and stay in compliance with employment law?
As with most aspects of expanding your business, it all comes down to planning. Here’s how to get started.
If you’re looking to hire your first employee, get started with ZipRecruiter! You can post your first job posting for free!
10 Steps To Hiring Your First Employee
1. Identify A Business Need
Why are you hiring an employee? Maybe you have more work than you can handle–or worse, you’re turning down business because you don’t have the capacity to take on more. Perhaps you’re spending too much time on parts of the business that don’t appeal to you, e.g. bookkeeping or customer service. Or maybe you have plans to grow and know that you can’t make it happen without support.
Whatever your reasons, you need to understand them before you can proceed.
2. Research Job Titles
You know you need to hire an employee, but what kind of employee? Start by making a list of the job duties that you’d like this worker to perform. Then, research job titles and descriptions to find the best fit for the role. Look at sample job descriptions on sites like ZipRecruiter, Indeed, and Monster. (Hold on to this research–you’ll need it when you get to the job description phase of your hiring process.)
You may find that you need a hybrid job role, e.g. marketing assistant/social media manager or administrative assistant/receptionist. But be wary of overloading your role. If you find that you have more work than one person can do, prioritize. Which work would be best performed by someone who is not you? That role is your first hire. The rest can wait until you decide the time is right to staff up further.
3. Evaluate Your Budget
You’ve heard the old saying, “You have to spend money to make money.” Hiring your first employee is an excellent example of that truism. According to a Glassdoor study, it costs an average of $4,000 to hire a new employee, including costs like recruiting, sourcing candidates, hiring, and performing background checks. And that’s not including the costs of paying your employee.
Before you go further, make sure you have the funds to support adding an employee. You will need to comply with minimum wage laws in your state, but to attract quality candidates, you will also need to pay a salary that’s in line with the market for the role. You can get a ballpark idea of how much you’ll need to pay by using free salary calculators like Payscale, Glassdoor, LinkedIn, Indeed, and Salary.com.
Also keep in mind that you will be responsible for payroll tax costs like FICA (7.65%), federal unemployment tax, and state unemployment tax. You will also be responsible for insurance costs like workers' compensation and any professional liability coverage.
4. Take Care Of The Paperwork
Before you can hire your first employee, you need to get some paperwork out of the way:
- Get an Employer Identification Number (EIN). The IRS provides a free guide to the process of securing an EIN. You can apply online without cost.
- Set up tax withholding. This includes federal withholding (Form W4), federal wage and tax statements (Form W-2), and any state and local taxes. You’ll need to keep those files for four years, so make sure you have a good system.
- Prepare Employee Eligibility Verification (Form I-9). You will need to have your new employee fill out this form after hire. Employers are responsible for keeping I-9 records.
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- Get workers' compensation insurance. You’re legally required to hold this insurance once you have employees. Check with your state insurance office for details.
- Register for a state unemployment insurance account. Employers must pay unemployment taxes. Check with your state department of labor for details.
After you make your hire, you’ll need to report it to your state’s new hire registry. Also, be sure to retain records of your new employee’s name and social security number along with their other documentation.
5. Set Compensation and Benefits
Compensation includes salary, but it’s not just salary. Will you offer other benefits along with pay? Keep the local job market in mind. If other employers are paying part of health insurance benefits, for example, you will likely have to do the same to stay competitive.
Also, keep in mind that healthy employees are productive employees. Consider building in paid time off, sick time, and other benefits that have been shown to safeguard employee health and well-being.
6. Write A Job Description
Go back to your list of job titles and duties and begin building a job description. Include the job’s responsibilities, requirements, and ideal qualifications. Consider how this role will fit into the company. As this is your first hire, they will no doubt report to you, but how might that role expand over time? If this is your first of many new employees, what will the team ultimately look like?
7. Post A Job Ad
Once you have your job description, writing your job ad will be a lot easier. But remember that a job description and a job listing aren’t the same things. Your advertisement is a marketing tool and should highlight the best parts of the role, as well as your requirements for the job. What would make you want to work for your company? What do you offer that other employers don’t?
Pro Tip: We recommend posting on ZipRecruiter! You can post your first job for free!
8. Conduct Interviews
Design your interview process. This might include phone screens, skills tests, an on-site interview, or virtual interviews. Whatever you decide, be sure to clearly communicate the process to candidates when you first speak with them. Above all, always notify candidates who were not chosen that you’ve moved on with another applicant. Treating all candidates with courtesy will help ensure that you build a reputation as a fair employer.
9. Review References
Ask employees to submit a few references and follow up. Review state and federal law before conducting any reference checks. At minimum, you will likely be required to have the same reference check process for all candidates to prevent discrimination. More extensive background checks that include credit checks or criminal history will require special attention to legal compliance, so be sure you know the restrictions before you proceed.
10. Make An Offer
Once you’ve narrowed your applicant pool and selected a candidate, extend a job offer. It’s essential to follow up on any verbal offer with a formal offer in writing. Your offer letter should contain all the important details of the job, including the salary, pay period, benefits, leave information, and terms of employment. Unless your business is located in Montana, your employee will likely be employed at will. This means that they are free to resign at any time, with or without notice. It also means that you are free to terminate their employment under the same conditions.
3 Places To Find Your First Employee
As a brand-new employer, it’s especially important to choose wisely when selecting a job site. Consider paid and free job posting sites like:
ZipRecruiter
Your first job posting is free at ZipRecruiter, which allows you to post your listing to over 100 job boards in one click. ZipRecruiter’s AI matches top candidates with your listing and invites them to apply.
If you want to learn more, check out our ZipRecruiter review.
Indeed
Post and manage your job listing for free at Indeed, the web’s largest job searching and hiring site. You can also pay per listing to feature your ad in candidate searches.
If you want to learn more, check out our Indeed review.
Post one free job listing at a time on LinkedIn, the world’s most popular professional social network. You can also add a budget to your posting to reach more applicants.
If you want to learn more, check out our LinkedIn review.
The Bottom Line
Now that you have a plan, it’s time to hire your first employee. Get started for free on ZipRecruiter and reach qualified applicants today.
