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Hiring Your First Employee: Here's How to Do it

6-minute read

Hiring your first employee can be tough, but if you find the right one, it can lead to a great working relationship like the two coworkers chatting here.
Pauline Germanos

Pauline Germanos

6 August 2021

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When your business is really starting to take off, it’s both exciting and overwhelming.

Success feels good, but there comes a point when you begin to think about bringing in other people to make it multiply. Even if you intend to run your own business as the only employee, there will likely come a time when it’s time for hiring your first employee.

If you want to continue to grow your business, there will be a whole lot more to do, which requires help from other people -- and people who can actually do the job. You can wear a lot of hats, but you can’t wear them all – especially if you want to succeed.

At the beginning of your business, you can probably handle the tasks since the demand of your customers is probably not that much. But as workload increases, the more your energy can drain and you’ll spread yourself thin by trying to do it all.

To be frank, you could easily experience burnout if you continue down the solo road. If you begin hiring other people, and you focus solely more on the stuff you love about your job, then you’ll have a much better work-life balance along with increasing your business’ success.

Give someone the chance to do work that they love, and that will instantly reduce your stress and boost morale.

Even though you own and run your business, you are also an employee, and you need to care for yourself as one. Aside from emotions, your business could hit a fast decline if you try taking on everything alone and can’t keep up with it!

So, it really benefits you to hire employees, even if it’s just one employee at a time.

7 Steps for Hiring Your First Employee

If you’re feeling overwhelmed by the hiring process, or just looking to plan ahead for when you will need to hire, here are some tips for bringing new people on board:

1. Make sure you actually need to hire an employee for the role.

I know it may seem like you need to hire your first employee as soon as you think there is too much work on your plate, but before you quickly post a job listing, get your thoughts organized. List out very clear and specific things you are looking for in the job role.

Is it something you could tackle on your own with better organization, or is there too much that it actually should be its own role? And, will there be enough work for the person you would hire?

Think about this scenario: You hire someone fantastic – their resume is incredible and they blow you away in their interviews. Then comes the first day of work, and you have two big things for them to work on.

But instead of spending the 8-hour work day on it, they knock it out in 3 hours. This is great, except then you are spending time trying to figure out what they could do next.

This becomes a routine over the next week and you quickly realize that you don’t have enough work for them. You also realize you are wasting valuable time that needs to be devoted to other projects by trying to figure out what your new hire could be working on for you.

Instead of increasing business, suddenly you’re losing it. Then, you need to cut down that worker’s hours because you didn’t take time to think if you actually really needed to hire someone new.

To help avoid this, think about how it sounds when you write out the job role description, the expectations, and experience required. What will the day-to-day look like for the new hire? Is this a one-time project or is it something that needs to be done every day?

On the flip side of not enough work to do, also ask yourself if there is too much. You won’t find someone who can do everything, and you shouldn’t anyway. As you grow, you want to make sure you find someone who is the best at just a few things.

2. Look at your hiring budget.

Hiring your first employee will take money. How much income is your business making, and how much can you pay (and offer benefits) to a new hire? Depending on the level of experience you’re asking for, you’ll have to make a competitive offer or else you just won’t get the role filled.

You also need to be making enough to pay your employee – you don’t want to be in a position where you are losing money or can’t pay yourself, so doing a thorough look over your finances first is super important.

3. Review your insurance.

When bringing someone onboard, there’s likely to be a learning curve, even for experienced new hires. It can be a good idea to make sure you’ve got the right business insurance in place.

General liability insurance — This covers costs associated with third-party accidents, property damage, and bodily injury. And it covers you and your employees. Without it, you could be on the hook if your new hire is involved in an unwanted event.

Professional liability insurance — We all make mistakes, especially when we’re not quite up to speed. Professional liability can cover you and your employees for any damages and legal costs that may arise from claims of negligence, or even just honest mistakes.

Workers compensation insurance — Whether you’re bringing on full- or part-time employees, you should consider workers compensation insurance. It covers your employees if they get sick or injured while working for you. And it’s often required in many states.

Good news. You don’t have to take a lot of time away from reviewing resumes and applications to get the right coverage. We help small business owners like you find top-notch general liability coverage in just 10 minutes.

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4. Avoid hiring family and friends.

There are unique exceptions to this, and unless this was a shared business idea with the intention of co-owning with your family member, your safest bet is to hire someone from the outside.

Why? For one, there’s a strong emotional aspect that could get messy. Let’s say you hire your cousin, and you have to sit them down for a serious talk.

You’re not just impacting a regular employee, this is your family, so it could carry over to your home life as well and become a bigger mess than it would be with someone you only know and see at work.

At work, this could also create an intense dynamic if your family member takes it too personally when you have to ask them to improve their performance or need to make any other call out.

Naturally, if you have a family member on your team, any other employees could easily believe there is some nepotism, which could turn into a huge argument and upset amongst coworkers.

Again, this isn’t always the case, but could easily happen. Plus, family members may expect more freedom and benefits to the job without putting in as much effort as other workers.

Not only do you want to hire good people, you also want to hire hardworking people, so if you are considering getting your brother onto your paint services company, think it through so it doesn’t backfire on you.

5. Find reliable people through networking & reputation.

No matter how big or small the role you are looking to fill, networking is a very strong way to find reliable and extremely capable people.

Whether it’s using social media to interact with other people in your trade or talking on the phone with peers, using other people to find your next employee is a great way to go about hiring.

Instead of filing through random applications from strangers, or trying to get applications from strangers, you can trust someone else’s personal suggestion.

If someone has worked hard and proven themselves, they’ll easily be one of the first that your friend or coworker recommends.

Of course, don’t hire employees you found through networking right away. You still need to go through the process of looking at their resume and interviewing to ensure it is the right match, but you’ll be meeting with people who match more of what you are looking for instead of wasting time with people you wouldn’t ever want to work with.

Keep in mind, while job board sites work for some recruiters, they are definitely catered to medium to large businesses. If you have 5 or fewer people, those popular job board sites most likely won’t work for you.

6. If an employee leaves to start their own biz, support them.

It may be emotionally upsetting and discouraging when you have a top-performing employee leave to go start their own business in the same trade as you, but the last thing you want to do is be bitter and cut ties. Why? That damages any future opportunities for networking with that person.

Think of it this way: a year after that favorite employee left, you have hired some good people but you need more. You also know that networking in your trade is very important, and you see that your former employee subcontracts a lot of great working people.

If you have shown support and kept a friendly relationship, you may be able to get some help through them lending you their subcontractors (or full-time employees) info. Which leads me to my final tip…

7. You don’t need to first hire someone full-time.

A lot of companies begin with a freelancer, or a subcontractor – whether that’s for a month, 6 months, or even a year. It’s great if you only need help on a specific project, but it’s also good if you want to test the waters and see if the person is the right fit for your company.

If it doesn’t work out, you only had that person working for a short bit of time anyway so you don’t really need to go through the big procedure of firing a full-time employee.

If you only need someone to help with scheduling or to work on short writing projects, there are a lot of remote and virtual working assistants, writers, and graphic designers – basically everything that doesn’t require working on site.

This can save you a lot of money if you don’t want to hire someone full time, and just pay them per project. And, if you don’t want to spend the money on expanding your office space, virtual employment saves you a lot of money there too!

Hiring Your First Employee Doesn't Have to Be Hard

No matter what, there are going to be obstacles and mistakes when it comes to hiring your first employee. However, the more you step forward with optimism and confidence, and not worry too much, the better you’ll do!

When hiring staff, don’t forget to get a business insurance quote to ensure you're covered.

Pauline Germanos

Written by

Pauline Germanos

When she’s not writing for SB, Pauline runs an intuitive healing business... and is still writing as she types up psychic readings! As she was raised by entrepreneurs, she knows what it takes to be a small business owner.

Pauline writes on a number of topics such as small business owner resources, marketing, and customer service and retention.

This content is for general, informational purposes only and is not intended to provide legal, tax, accounting, or financial advice. Please obtain expert advice from industry specific professionals who may better understand your business’s needs. Read our full disclaimer

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