Hiring the right people can have a massive impact on business growth. A high-performing team can help you reach your business goals fast, build a strong reputation, and avoid costly mistakes. Considering how important it is to find reliable and skilled employees, many small business owners worry about making a bad hiring decision. Being legally bound in a disadvantageous employer-employee relationship can be costly.
Read on to discover our 4-step hiring guide for small businesses.
1. Calculate the Costs of a New Hire
Before posting your job ad, ask yourself if your small business can afford the ongoing costs of a new hire. An employee costs a lot more than just the base salary. Depending on your industry, you may have to provide an office, equipment, and training. Plus, you’ll also incur expenses with social security taxes, health insurance, and worker’s compensation insurance. To make sure a new hire is financially feasible, conduct a thorough cost-benefit analysis.
2. Comply With Legal Requirements
Before hiring someone, you need to cover the bases in terms of legal requirements. You need to apply for an Employer Identification Number (ENI) if you don’t have it already. This number helps the IRS identify your business, and you will need it for filing tax returns. You also need to learn about tax requirements, which may vary from state to state. Employment taxes include social security, unemployment compensation, and health insurance. Depending on your industry, you may also need to include worker’s compensation in your business insurance plan. The legal requirements associated with the hiring process can be thus very complex.
3. Prepare a Detailed and Attractive Job Description
As a small business owner, you want to attract competent and reliable candidates. To make the recruitment process as straightforward as possible, prepare a detailed job description by outlining all job responsibilities and benefits. Be transparent in presenting your business and your needs. When writing the job description, prioritize natural language over industry jargon. Preparing a detailed job description will help you target candidates that have the necessary skills or experience. It will also help you find the most relevant questions to ask during the interviews.
4. Prepare an Employment Contract
When you hire an employee, a contract of employment is established. Setting up the contract terms is a fundamental step in the hiring process because the agreement is legally binding. As a small business owner, make sure you can comply with all the terms of the contract. Your employees can seek help from a employment contracts lawyer and take legal action against you in case of breach of contract. A fair and transparent contract can help you avoid potential lawsuits or legal disputes. Include as much information as possible about all aspects of the job, including responsibilities, salary, benefits, schedule, and confidentiality policy. Every cause of the contract should be clear to both parties.
Although the hiring process is challenging and time-consuming, it can be a huge relief to know that you have skilled and trustworthy employees to rely on. Find employees who understand your goals and can push your business towards success.