Two entrepreneurs in business attire shaking hands across a table at a restaurant.
Hiring good employees is essential to ensuring your business succeeds, but it can be easier said than done. If you’re just learning to operate a small business, you might not know where to look for employees, or how to make sure that they want to come work for you. It’s critical to master this skill, though, since good hiring and retention practices will contribute to the success of your business.
How to Find New Employees
Before you can start hiring good employees, you have to know where to start. Hiring is more complex than it might seem, and it has a number of challenges. Here are a few points to help you get started the right way:
- Understand the Difference Between Employees and Contractors. Employees and independent contractors are two different things. While employees work for your company, independent contractors work with it and are required to withhold their own income tax and other taxes. Don’t ever assume you’re hiring a contractor without making it explicitly clear. Unless the new hire falls into the definition of an independent contractor, you’ll be responsible for the duties of a traditional employer.
- Consider Your Payroll Provider. If you don’t have a payroll provider, now is time to hire one. PSPs, or payroll service providers, can help you prepare paychecks, organize tax withholdings, and prepare annual reports. While many new business owners think they don’t need this type of assistance, PSPs are critical for ensuring the right people get paid the right amounts and that your company complies with tax and employment law.
- Create A Good Job Description. The right job description will help you land the right employees. Craft a good one to hire employees and an even better one after they’ve been hired. Well-written and comprehensive job descriptions help clarify expectations and ensure a good experience for everyone.
- Consider Benefits. Offering employee benefits makes your company more attractive to would-be employees. For best results, consider offering health insurance, a retirement plan, paid vacation, paid holidays, and paid personal days. These perks build loyalty among employees and ensure a happy staff.
- Create an Employee Handbook. An employee handbook helps you avoid potential misunderstandings by making the details and regulations of your company clear from the beginning. The more thoroughly your employees understand the company protocol and what’s expected from them, the more effectively they’ll be able to abide by those rules and achieve your goals.
8 Tips for Effective Small Business Hiring
Want to make your hiring go even more smoothly? Here are some useful tips:
1. Be Specific About the Details of the Position
The more specific you can be, the easier the hiring process will be. Define the details now to avoid problems down the road. Tell employees the title of the job, the expected time commitment, the tasks you need help with, and the hiring requirements. When employees are informed and educated, it reduces the amount of hands-on time you’ll spend interviewing, sifting through candidates, and resolving problems.
2. Think About Hiring Contractors
Hiring contractors is different than hiring employees. While contractors work with your company, they don’t work for it. They can be a helpful tool if you’re just looking for short-term help, however, and many companies use a mix of contractors and employees. Be sure you understand the difference between the two, and how each can benefit your business.
3. Continue Recruiting
Even if all your positions are filled, keep your eye out for new talent at all times. This allows you to fill your team with highly qualified people and find new employees for vacant positions quickly and easily.
4. Stay Organized
Stay organized during your hiring process to streamline it as much as possible. Be sure to list the “must-haves” for a new hire and stick to your required qualifications. It will save you time and energy down the road and ensure your team is as skilled and experienced as possible.
5. Shoot for the Best Employees
Hire the most qualified employees you can. This will reduce turnover and increase performance down the line. Once you have a team of great employees, continue leading them toward success with regular training and mentorship.
6. Offer as Many Perks as Possible
Employees who feel valued are more likely to stay with your company for the long term. With this in mind, be sure you’re offering as many employee perks as possible, including retirement and health insurance. These are instrumental in motivating employees and making your company one that people want to work for.
7. Proactively Contact Desirable Employees
Even if your ideal employee is currently working for another company, picking up the phone is a smart way to gauge interest and help produce an eventual hire.
8. Take Your Time in Hiring
Take your time hiring employees. Finding new employees can be tough, and it’s wise to move slowly.
The Hiring Process
Once you locate great employees, it’s time to hire them. While attracting a talented pool of candidates and managing employees is often regarded as the most challenging aspect of hiring, it’s important to master the ins and outs of the hiring process, as well. Here are some general guidelines to help you get started:
- Obtain an EIN. To hire and pay employees, you’ll need an employer identification number or an EIN. You can obtain this through the IRS.
- Issue a W-4 Form. New employees need to return a completed W-4 form. The requirement may be different for independent contractors, so be sure to check with your state and local governments to find out which forms you’ll need to issue.
- Develop a Compensation Plan. A compensation plan should be developed to cover employee vacation days, holidays, and leave time. You’ll also need to develop an outline to govern pay periods and ensure they comply with IRS guidelines.
- Hire a Payroll Professional. Decide who will do your payroll, and spend some time working out any kinks. You should know which records you’re required to keep and for how long, and when you need to report payroll taxes.
While finding new employees can be tough, it’s far from impossible. When you know how to interview, manage, and hire new employees, it’s easy to build a skilled team and enjoy a more streamlined workforce.
If you’re ready to start hiring better employees, start writing new job descriptions now. You may also want to build new employees into your MOBI business plan and sign up for MOBI’s “ Starting a Business ” course!