Starting your own business is an exciting and difficult time. It is likely that you will work long hours and have to do everything yourself; until you are ready to take on your first employee. Here, we look at the steps to take to make sure you get it right.
How to know you’re ready for your first employee
Taking on an employee is a big step. You will be committing to paying their wage for the foreseeable future. If you do this too early, you may experience cash flow issues.
It will also be your first opportunity to delegate control of specific functions. That is, assuming you are able to let go of these functions.
The following are all signs that you should take on your first employee:
- You have a task that needs a specific skill set; such as your accounts
- Help is required to bring in sales or because you’ve been turning down work
- A new revenue stream has become apparent or started and you can’t deal with it yourself
- You need support; there simply isn’t enough time in your day.
Above all, if you are about to hire you need to ensure that you have the funds available.
Steps to follow to take on your first employee
It is essential you follow these steps to get the best employee possible for the role you are creating.
Step 1 – The role
It is important to define the role. You and your employee need to know what they are being hired for and what they will be expected to do to earn their wage.
You should be specific about their tasks but leave wiggle room in your plans to allow their role to adjust and grow with the business.
A good way to judge if you have enough work for an employee is to list their repeatable tasks. If this amounts to more than 20 hours per week then you’re ready for your employee.
Step 2 – The procedure
You need to decide the procedure for each step of the role you have created. You then need to document this.
But, you should also create a list of your hiring process and the criteria you are looking for. This will help you to advertise the position and ensure that you adopt a fair and open approach to all your candidates.
You will need to refer to this as much as the new employee.
Step 3 – Check your budget
A new employee should be bringing money into the business or freeing up your time to bring money in.
You need to consider your role once the new employee has started and that you will have the funds available to meet their wage. It should be fairly easy to establish their wage as you can look at similar roles available on the market.
Step 4 – Advertise
You know need to start looking for your first employee. The standard approach was to place an advertisement in local papers and with your job centre.
However, people are increasingly looking at social media sites to find work. You should advertise on your website and your personal social media accounts. You can also talk to companies you deal with, they may know of people looking for opportunities.
Remember to specify what you are looking for, how they should apply and when the deadline is.
Step 5 – Sorting and interviewing
Once you’ve started to receive some applications you’ll need to start deciding which ones are worth seeing.
A good way of verifying people actually read your advert is to ask them to start the application a specific way.
You need to verify that your candidates have the right skill on paper. However, once you’ve got them in the interview it is an excellent idea to test their skills and aptitude.
The easiest way to do this is to give them one of the tasks that they will be doing.
This is an effective way of testing their skills and not just their ability to answer a question well. You need workers that will be flexible and not just ‘on the clock’.
A good employee will not watch the clock; they will want to contribute to the business and they’ll do this through you making them feel part of the team.
Step 6 – Hiring
Prepare the contract before you make your offer. You can easily change the template for any specific needs if necessary.
Having an official document helps your new employee to feel part of the team; it also ensures that everyone knows the legal standing of the employment; although you hope it is not necessary to refer to it.
Step 7 – Know your role
Your role is crucial to the success of your business. You’ve developed the role as the business has grown. However, now you have a new challenge.
Do you want to be a hard boss who expects their orders followed literally without question, or do you want to be your new employee’s friend?
There is a lot of ground between these two positions. You need to decide where you want to be before your new employee starts.
Step 8 – The first day
If you have already dealt with the contract and other legal requirements then the first day will be simple. Your new employee will need orientation and knowledge of your safety procedures. They can then get stuck straight in.
It is essential that any employee is taken on for a probationary period. This gives them, as well as you, the opportunity to end the contract without any issue. It can be that you simply don’t work well together or they need a different type of work.
It is important to lay out your steps and prepare first, this will help to avoid the undesirable scenario of having to let your first employee go. While this is a risk of any employment you are growing your business; it’s not something you want to be doing!
Hiring your first employee: Top ten tips
Dave Chaplin, CEO and founder of contracting authority ContractorCalculator, gives his tips on taking on the right employee.
Like many business owners the fear of hiring someone can give rise to feelings that you are losing control, and the person you hire won’t do the job as well as you can.
However, if you want to build a real business that has saleable value, it needs to be something that is not dependent on you. Either you use automation, or hire people, but most likely a combination of both. The day will come that you will need to hire someone if you want anything more than a lifestyle business. In my own business, I now employ two full-time staff members. Here are my ten golden rules on hiring your first employee:
- This is your first employee. You are going to be seeing them 40 hours a week, so choose someone who you can get on with. Chemistry is important.
- Pick someone who really enjoys doing the job you want them to do – because they will then care about the quality of their work.
- Hire people who know more than you and can supplement your skills.
- If it’s for an area you know little about, try and get a recommendation through your network.
- Experience is important, but everyone gains that. What you cannot teach is tenacity – but you can spot it and hire it.
- Ask the person what their dream job would be like, what their dream day, week, month, year would be like – everyone is different. But if it matches what you can offer, that’s a bonus.
- Conversely, ask them what would be awful – and they may describe their current job – because by being able to move them away from that is attractive for them, and you.
- If you cannot offer something they want, say so. There’s no point creating the wrong impression, as it will demotivate them in the long term.
- Choose someone who has a track record of not jumping from firm to firm. Nowhere is perfect, and there will be storms, and you will need them to help you.
- Ultimately you want someone who will be very happy working with you. Everything else then follows.
Case study: Leigh Osborne, managing director of Chiswick Auctions, recalls his first hiring experience after himself rising from receptionist to managing director.
I started at the auction house as a receptionist 11 years ago. During my five years at the company I could see its massive potential, but couldn’t act on it in my role. When one of the business partners sold their share in the company, I took my chance, bought his share and became a joint managing director.
The first person I hired was a general valuer and even though I had worked in recruitment it was still strange to employ someone while I still thought of myself as the receptionist! At the time it was difficult to find staff with the right expertise, as we were competing against the larger auction houses. However now, we’re the ones being approached.
We started off by putting an advert in a trade publication and the eventual recruit was the only person that applied. At the time the criteria was ‘anyone that could do the job’, but now, due to size and reputation, we can be more discerning about our choices.
Hiring people is a huge responsibility; for example candidates may have given up another job to come to the company. What I like to see initially is a solid CV with a good employment record and no job-hopping. Also key, is their personality at interview; I know within five minutes if they’re going to be a good addition to the family-feel team we have here.
Luckily we also now have a well-visited website, so as soon as we mention we have vacancies, we are inundated with applications. The difference today is that we used to take people with little experience, whereas now we only consider those who have worked at another auction house. We trade on our expertise and we want it to be the very best out there.
Advice for small businesses hiring their first employee
When taking on your first staff member, be bold, take risks, think to the future. Your first hire needs to be multi-faceted; flexible about being involved in all parts of the business – from doing their specified role, to helping out at an event. The key thing about a new hire for me, is that they share the enthusiasm and passion for the company’s ethos and future vision and they want to be a part of it.