Hiring Employees: How to Find the Best Employees for Your Small Business

Hiring new employees can be stressful, to say the least. Did you know that, on average, it takes small business owners a month to find the right candidate? If you’re wondering how to find employees who you can trust to do the job well, we have tips that might help.

Trust us, hiring a new employee, whether it’s your first or fifthteenth, doesn’t have to be that difficult. Take a look at our surprising tips for hiring new employees. They’ll help you recruit top talent, help protect them, and build a winning team in your industry.

Let’s get started!

Hiring Your First Employee: Important Info You Need to Know

Before diving in, we want to acknowledge that the job market has changed quite a bit over the past few years. In fact, it has turned completely upside down and inside out. The traditional way of working — daily commutes to an office and holding meetings in-person — largely was tossed to the wayside as remote work took over, and new government regulations were put in place.

Business owners who continued to work in-person, due to the nature of their jobs, had to quickly adapt. That meant everyone from salon owners to plumbers to nail technicians had to put new, not to mention costly, safety protocols in place.

The end result was a transformed workplace. Some employees took breaks from working, others altered their schedules, and some workers stuck it out and adapted, even under the most stressful circumstances.

If you’re currently hiring your first employee, you may not be familiar with recent changes in the labor market. Before you start the hiring process, it’s important to familiarize yourself with the biggest trends that impact today’s job market. Without understanding the landscape, it can be difficult to put a successful hiring strategy in place.

When it comes to how to find employees, here are five of the most current hiring trends. Keep these in mind as you grow your team.

Trend #1: Job seekers are in a position of power.

Right now, it’s still a job-seeker’s market, meaning businesses have plenty of openings for workers, and the unemployment rate is still low. Over the past few years, workers have dropped out of the workforce for varying reasons: to care for children and to stay safe during the COVID-19 pandemic. For some workers, it just made sense to opt out.

In addition, new limits on immigration and an aging population also contributed to the reduced size of the workforce. Simply put, there just weren’t — and still aren’t — as many qualified workers to go around. This puts a strain on hiring managers, making it more difficult to find and hire the right employees.

But don’t be discouraged, especially if you’re just starting to hire employees. It is possible to find top talent in a tight labor market. You just have to know how to attract today’s workers. Keep reading, and we’ll cover some helpful tips later on.

Trend #2: Many employees want to work remotely.

At the start, working remotely may have felt like an inconvenience. But many workers adapted and now may prefer an off-site work culture. After all, ditching a long commute saves time, and working from home can reduce gasoline and other costs. Plus, there’s nothing more comfortable than working in your pajamas.

According to a recent article in the Harvard Business Review, today’s employees expect flexibility and a hybrid workplace. If you can’t or don’t offer remote or flexible work arrangements, you may be at a disadvantage from other employers. In order to hire top talent, it’s important to understand who prefers remote work versus on-site work, and how to juggle both situations.

Additionally, a hybrid workplace can offer your company benefits — not just your employees. Recent studies show that remote workers may be more productive than many on-site employees. Without a commute, they may be putting in longer hours and staying more focused. Plus, when you hire remote workers, you can extend your hiring reach to other states, giving you access to a broader talent pool.

Who knew? Remote work can be a win for everyone involved.

Trend #3: Employees today value and seek diversity.

The past few years have brought heightened awareness to issues surrounding diversity, inclusivity, and inequality. In response, many businesses prioritized diversity initiatives and promoted a more welcoming work environment. Rather than just “talking the talk,” lots of successful business owners put thought and action into making big changes.

It’s no wonder they did — many of today’s employees prefer inclusive companies with clear action plans for diversity. In particular, the younger generation typically cares deeply about equity and inclusivity in the workplace. In order to attract and retain today’s best workers, it’s critical to create a culture of diversity at your small business.

If you’re just at the beginning of your hiring process, now’s the time to check in. What can you do now to promote diversity and inclusion? Is there anything specific you can do to create a more welcoming work environment? How do you show your customers you value diversity? And finally, do you have a plan to grow in this area?

Keep in mind that top candidates may ask how your business addresses these issues, so prepare your answer ahead of time.

Trend #4: Interviewees are looking for better pay and benefits.

In a job-seeker’s market, employees know they have bargaining power. That’s why it’s critical to offer candidates competitive pay and benefits. Don’t skimp here. Many workers left their employers during the height of the pandemic. Now they’re hoping to re-enter the workforce, and many are seeking higher pay and better benefits as well.

A few tips:

• Do your research. Know the average salary in your area for the job you need to fill. If you can, consider offering the higher end of the salary range, especially if it’s to an individual with significant experience or expertise in the role.

• Expand your benefits. Working with a broker might help you explore affordable benefit packages for small business owners. Remember to think outside the box. For example, consider whether you can offer on-site health services, pet insurance, paid time off, gym reimbursements, longer parental leave, and more.

• Add creative perks. Consider placing healthy snacks in the breakroom, offering free books and massages and yoga, and instituting “ice cream Fridays.” These perks can be relatively inexpensive and make your company stand out.

Overall, put yourself in your employees’ shoes. What kind of work environment would you like to see? Then do whatever you can (while staying within budget) to make it happen.

Trend #5: Working mothers are still recovering from professional setbacks.

A recent Forbes article highlights the unprecedented setbacks in the workplace experienced by working women, and especially working mothers. The article also states that more than a third of working women who left the workforce over the past couple of years have not returned.

In fact, since early 2020, women have lost 2.4 million jobs. Of the women who did return to work, many opted for remote or part-time roles to balance their careers and home or family responsibilities.

Whether you’re hiring your first employee, or you already have a team in place, consider the unique needs of professional women. Many of them are juggling caregiving roles, either to children or aging parents, as well as their careers.

Women can bring tremendous talent to the workforce, as well as a different perspective and way of working. Many women are proven leaders and shouldn’t be passed by. In fact, business owners who don’t consider the unique needs of professional women may lose out in the marketplace.

As you’re hiring employees for your small business, we recommend:

• Offering hybrid and remote work environments when it’s possible.
• Treating remote and off-site employees the same as workers with more face-time in the office.
• Considering remote workers equally for promotions and leadership roles, including women who have taken time off.

Don’t get left behind with the times. Business owners who are forward-thinking and strategic about who they hire and how they accommodate their needs are likely to be better positioned to win in today’s job market.

The Process for Hiring Your First Employee

Now that you know the layout of the land, let’s talk about the steps for hiring your first employee. Here are general guidelines, but remember, you’ll want to check on your state’s regulations first.

(By the way, if you already have a few employees today, feel free to skip to the next section!)

To get set up, according to the Small Business’s Administration’s website, you should:

1. Obtain an Employer Identification Number (EIN). You can do this, even if you’re a sole proprietor. And you can easily apply online.

2. Learn if you need to get state or local tax IDs. This will be important when you set up payroll, and it differs based on where your business is located. You can learn more here.

3, Think about whether you want to hire a contractor or an employee. Remember, you’ll usually need to offer benefits to employees, but you’ll have more control, and hopefully, stability in the role. Contractors, on the other hand, typically require fewer legal obligations, but tend to be shorter-term.

4. Plan your pay periods to coordinate tax withholding for the IRS. This includes federal income taxes and Social Security and Medicare taxes (FICA). You can learn more about reporting wages, tips, and other compensation to the government by checking here.

5. Decide how you will pay employees for holidays, vacation time, and other leave. For example, decide which holidays your company will take off and how much vacation time you offer.

6. Determine if you will do payroll in-house or hire an external payroll company. There are pros and cons to each approach.

7. Get the right payroll software. This can help ensure that everyone is paid on time and your tax records are crystal clear.

8. Purchase workers compensation insurance, if needed. Many states require workers compensation coverage when you hire your first employee. Check with your state’s laws first. No matter what your state requires, workers compensation can help protect you financially if there’s an accident or injury on the job. Want to learn more about why workers compensation is important? Check out our article.

Want to see how much workers compensation might cost? Use our quote form to get fast and free quotes from top insurers.

9. Write a strong job description and advertise it. Start advertising for your position and collecting resumes. Review them carefully and try to stay open-minded. Know what salary range you can offer. Want to learn more? We have more tips for how to find top employees here.

10. Interview and evaluate candidates. Don’t rush this step. Take time to get to know interviewees, and ask them smart questions that help you understand their work style. Remember, they’re interviewing you too.

11. Make an offer. Be prepared to negotiate in today’s labor market. You may need to consider a slightly higher salary or additional benefits. Do what makes the most sense financially to secure top-notch employees.

12. Set a start date and begin onboarding. If possible, collect all payroll paperwork ahead of your employee’s start date, including a Form W-4 (for employees) or a Form W-9 (for contractors). For more tips about onboarding, check out this article.

13. Keep organized records. If you get the right payroll system, this should be easy. But it’s important to understand which records you should keep and how long you may need them.

14. Report payroll taxes to Uncle Sam. You’ll need to do this on a quarterly and annual basis.

I know, it seems like a lot to do, but once you get the initial payroll steps in place, you won’t have to make many changes. Plus, you’ll reap the rewards of another employee — and more horsepower.

10 Surprising Tips for Hiring Employees

Whether you’re hiring your first employee or your fifteenth, it’s helpful to get a few good tips. We’ll let you in on some of the best-kept secrets that can help you find top-performing employees in an unusually difficult job market.

Get ready to be surprised.

Tip #1: Put intelligence before experience.

Gone are the days where experience is the end-all and be-all. Same with education. Instead, prioritize intelligence, knowledge, and skills. Remember that an intelligent person can easily acquire the experience needed for the job.

Instead, try hiring a less-experienced person who is smart and driven. Put more effort into upfront training and reap the rewards later on. If you hire an intelligent employee with the right skillset and mindset, expect to see problems solved and fewer questions asked.

Tip #2: Pay attention to body language during an interview.

They say body language can speak louder than words. During an interview, it is critical to pay attention to your candidate’s nonverbal communication.

And, for that matter, pay attention to yours too. Nonverbal communication can shed light on a person’s true feelings and intentions, so it’s important to read body language while you’re listening to what a candidate is saying.

Specifically, pay attention to:

• Eye contact. Do they avoid looking at you during the interview? Or do they have a confident gaze that demonstrates they’re listening? Avoiding eye contact can mean the candidate is disinterested, or worse, not being truthful.
• Posture. Do they sit up tall or do they slouch? Poor posture can signal an unenergetic or unenthusiastic candidate.
• Fidgety hands or feet. It’s normal to be nervous during job interviews. But if you see fidgety hands or feet, be aware. This candidate may not feel prepared for the job. If you're interviewing for a leadership position, watch for fidgeting too. Leaders should be able to demonstrate calmness and confidence.

Tip #3: Hire someone who is genuine.

Your job will be much easier if you hire someone who is trustworthy and honest. Look for genuine people who avoid a front or are acting fake. Instead, seek candidates who can share their real opinions and be themselves around you.

Spoiler alert: Finding the right, genuine candidate can take a while. It’s worth the wait.

Tip #4: Invite your current employees to interview candidates.

If you already have employees working for you, invite them to participate in the hiring process. Not only will they feel valued, but they can offer important input as well. In an ideal world, you hire teams who complement each other and work well together. Involving your current employees in the hiring process is one way to make this happen.

Tip #5: Look for someone who is committed to their career.

We’re not talking about someone who values their job and nothing else. Rather, look for candidates who place a priority on learning new skills, understanding industry trends, and improving themselves professionally. In other words, avoid hiring someone who is just there for the paycheck. You want an employee who is truly invested.

Tip #6: Ask yourself, “Does this person fit in with our workplace culture?”

You know it when you see it. Some employees just fit in, while others don’t. For example, if your business places a high priority working collaboratively in teams, consider hiring employees who enjoy working the same way. If your workplace is more individualistic, think about which candidates may enjoy that environment over others.

It’s never fun to hire someone only to find out later they don’t mesh with your company culture and employees. While you’re interviewing, try to understand if a candidate will fit in or not.

Tip #7: Prepare to be interviewed as a hiring manager.

Interviewing is a two-way street. As much as you’re trying to find the right candidate, your interviewees are trying to find the right workplace. Be prepared to answer their questions. It’s common for candidates to ask about workplace culture, the company’s mission and vision, and some of the benefits and drawbacks to working with your company.

Tip #8: Look outside your city and hire a remote employee.

As you know, hiring the right employees can be challenging. To expand your talent pool, consider hiring a remote employee. Depending on the nature of your work, this may be an option, especially if your job is done primarily on a computer and through virtual meetings.

That said, we know this isn’t an option for hands-on employees, like those in the construction or landscaping industries. But for professionals in financial services, marketing, and other lines of work, you may be able to hire someone across the country.

Just be aware that there are probably tax implications. Plus, you may need to adjust your company’s benefits. Talk to an accountant or financial advisor if you have questions regarding hiring remote employees.

Tip #9: Don’t rush it; hold out for the right hire.

As much as you probably need help right now, hiring the wrong person is costly. The U.S. Department of Labor estimates that a bad hire can cost a company 30% of a person’s first-year earnings. So if someone earns $70,000 a year, that’s $21,000 down the drain.

Instead of rushing the hiring process, take your time. Think carefully about your questions, your interviewee’s responses, and if needed, hold out for the right person. It will be worth the wait.

Tip #10: Prepare to negotiate.

As I mentioned, today’s labor market is tough. Job seekers know they’re needed, and they’re willing to hold out for companies with better pay and benefits. Be prepared to negotiate with candidates about anything from salary to benefits to start dates and time off.

You may have candidates who ask to work remotely or have flexible hours to accommodate families. Or a candidate may ask for upgraded equipment, additional job responsibilities, or a different title.

The bottom line: Be as flexible as possible, while still ensuring the job gets done. Chances are, you can bend a little for the right person. And who knows? Your new hire may request changes that ultimately improve the position.

Wait! Before You Hire — Why You Need Workers Compensation Insurance

We’ve discussed at length tips for interviewing and hiring the right employees. So hopefully by now, you have some solid ideas for choosing the best candidates.

Next up, how can you protect your employees while they’re working for you? We’ll keep it simple: Get workers compensation insurance.