7 things to consider before hiring your first employee

Your employees are the ones who will take your ideas and turn them into reality. To start, you may be running things by yourself or you may have a small team of partners, but as your business moves to formally launch, you’ll need to hire your first employee (which isn’t easy). This is a critical time for your business, and your choices could have a massive impact on how the first few years of your enterprise play out, so it’s not a decision you should take lightly.

So what exactly should you be considering when you make the move to hire your first employees?

Main Considerations

You should hash out these considerations, or at least be aware of them, before you even think about hiring an employee for your startup:

1. Employee types

First, understand that there are different types of employees, and you’ll need to make a decision about what employee types will be best for your early-stage brand. For example, most entrepreneurs look to full-time employees first, but don’t neglect the potential value that part-time employees or freelancers could offer you.

2. Legal requirements

You’ll also want to consider the potential legal ramifications of your hires, as well as ensure the legal compliance of your hiring practices. There are hundreds of employment laws at federal, state, and local levels, covering everything from how much you can pay your workers to working conditions that are permissible.Before hiring anyone, be sure you’re familiar with employment laws in your country in order to proactively prevent any potential legal dangers.

3. Taxes

In many countries, businesses are required to withhold certain types of taxes from employee paychecks. If you’re unfamiliar with the requirements, consult your country’s tax authority — such as SARS — and get up to speed on any tax laws that apply to you. In fact, one of your first hires (or one of your partners) should be someone well-versed in accounting, so they can help navigate and prepare for these rules and regulations.

4. Benefits and insurance

You’ll also need to figure out what types of insurance and benefits you want to offer — there are hundreds of options here, and most of them come with their own set of logistical difficulties. Benefits can make your positions more attractive to potential candidates, but also cost you more money — especially in the long term — so consider this balance carefully.

5. Long-term and short-term financial burden

The costs of an employee can be deceiving — you have to factor in more than just an hourly rate or a salary. Before you hire, you need to know that your hiring arrangement will be financially manageable both in the short-term and the long-term. Will you have enough cash flow to cover this employee’s paycheck? Will this employee be able to provide enough value to be worth what you’re paying them?

6. Long-term employment vision

Plans can and should change, but from the outset, you should have a general vision about how your employment will develop over time. When do you plan to hire more people? How many people will you have? What roles will they serve? What kind of hierarchy will you establish? This can help you find the perfect place for your initial hires to develop.

7. Candidate qualifications

Finally, you’ll need to know what qualifications you’re looking for in an employee. Someone talented, with lots of experience, is usually ideal, but that also comes with a cost, so consider your flexibility on experience and how much you’re willing to pay. You’ll also need to consider the culture fit of your candidates: what type of person do you want to have working for you?

Where to Start

Knowing all these considerations, you may be intimidated about getting the process started. But as soon as you have a handle on the legal and financial angles, you can start looking for your first candidates. For starters, go out and meet people at professional networking events. You’d be surprised how many talented candidates you’re able to meet. If you’re trying to fill one specific position, consider running some job ads for it and collecting resumes.

You could also go a more conventional route of recruiting, though it may take more time to vet the right candidate (and there’s no guarantee they’ll be willing to leave their job to work for you). Or if you’re after a freelancer or part-timer, there are dozens of freelance boards that you can consult.

However you choose to scout for candidates, once you’ve resolved the considerations above, the process will be far smoother and less risky for your business. Hiring is a complicated strategy you’ll learn over time, but this should set you on a positive initial path.

Feature image: Dita Margarita via Flickr.

Anna Johansson


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