A common challenge for small business leaders operating a thriving and fast-paced business is juggling administrative and core company functions. Leadership must handle customer support, manage the inventory, and balance the finances. 

Hiring a first employee isn’t merely a means to fill a role; it’s more so finding an individual to contribute to your growth and success. 

Visit – How to Know When It’s Time to Hire Your First Employee | CO- by US Chamber of Commerce – tips to help you know when it’s time to hire a first employee. What should you consider before starting the hiring process – let’s learn.

What To Consider Before Hiring a First Employee

While small business leaders strive for a thriving company, when things do start to go well and they have plenty of cash flow, it’s wise to bring in an extra set of hands to keep the business on track. Still, labor is a hefty expense and hiring a first employee adds to an already lengthy list of daily administrative burdens.

Before hiring a new staff member, there are a few things you should know as the company’s founder and the one responsible for its success.

Scalability

Currently, you have too much work and need to delegate duties to a newly added employee. The workload could be less later if business slows. You want to pay attention to how the demand fluctuates to ensure the individual hired will have plenty of responsibilities throughout the year.

You want to avoid hiring someone only to turn around and let them go or let them stay and pay them when they have nothing to do. The best scenario is hiring an employee because you’re at a point where you can’t take as many new clients as you’d like because you’re already overburdened.

Financial preparedness

Labor costs are typically one of a small business’s highest budgetary expenses. Aside from wages, you’re responsible for recruiting costs, background checks, interviews, and the onboarding processes. Additionally, you have the costs for the benefits package, setting up desk space and purchasing office equipment.

You want to ensure that your business be financially sound enough to handle the expenses. 

This means assessing your cash flow to see if you can reliably cover payroll each pay period without fail. You may want to hold off on hiring a full-time staffer if you don’t have a bank account with an extra 20 percent for urgent expenses. 

Instead, consider part-time help in the beginning or an independent contractor until you have more cash on hand. Click here for red flags startup founders want to pay attention for when hiring.

The role and responsibilities

Prospective staff members should clearly understand what their daily expectations will be if they join the company. 

Before the position is publicized, you want to write a concise job description that outlines each duty, the required experience and skill set for the role, the job’s purpose, and details on the company. There should also be information concerning salary and benefits. 

Tips For Hiring a First Employee

For business leaders who have trouble handling HR administrative tasks in addition to their rapidly growing business, it’s worth investing in a PEO – Professional Employer Organization, specializing in HR tasks, including hiring and managing new employees.

These experts offer strategies to make the process as straightforward and simple as possible with you using the following steps as a guideline.

Evaluate your business needs

Compile a list of responsibilities that you need supported each day and week. Think of the tasks you need to handle and prefer to take care of and those you prefer to delegate, keeping in mind that a single staff member may not have the knowledge or skill set to handle all that you want to send their way.

This requires due diligence in research to find competitive compensation ranges, salary and benefits – to determine what you can afford. You can use compensation management and salary benchmarking tools to help with this.

Legal and tax requirements

Employing your first hire must be legally permitted in your state and on a federal level. You also need to register with relevant tax authorities. That includes:

• EIN – Employer ID Number obtained through the IRS
• Fulfilling state requirements for new hire reporting
• Receipt of employee-signed W2 for income tax withholdings
• Verify work authorization with a prepared Form I9
• Federal employment tax withholding requirements should be understood, such as income taxes, Medicare, unemployment, and social security
• Need to sign on for relevant local and state payroll taxes, such as workers’ comp, unemployment insurance, state income taxes, and on.

Final Thought

This is far from an exhaustive list of the many tasks involved in hiring a first employee. Business leaders have their hands full with this administrative burden. Fortunately, they don’t need to do it on their own; a PEO will handle these duties and more. Please check additional details with this information.

These specialists make it relatively simple and straightforward for small businesses and startups to provide premium HR services and access top-notch benefits affordably while leadership focuses on strategic initiatives to continue to grow their businesses.