If you have a small business, you’ll probably have to hire employees at some point. This article can help you get started hiring employees.
So, you've established the foundation for your new business, and things are going well. The only thing is that you are overwhelmed with work and need some muscle to help out.
While this is something to celebrate, it's also time to start building a team of dedicated employees who can help you reach your goals.
When your group is small, every hire makes a critical difference in your company's success. Along with possessing the necessary skills for their roles, your team members must believe in your mission and values.
As you navigate the hiring process, you will need to comply with all legal obligations and keep your business organized along the way. Here is some guidance on how you can do just that:
You're excited to grow your small business and ready to hit the streets to find your next employee. But wait for just a second—there are some things to handle first to set the stage for a successful hiring process.
Let's cover a few essential steps to prepare for your new hires:
In short, an EIN serves as a kind of a Social Security Number (SSN) for a business, and any business that employs people must have one. If your company is a corporation or partnership, you may already have an EIN, but otherwise, you can obtain one by applying online through the IRS website. By registering your company with the state and federal government, you can begin to build your team legally.
The individual filling out the application must have an SSN, EIN, or another type of Taxpayer Identification Number (TIN). Make sure you are eligible to apply for an EIN online; your company must be in the United States or U.S. Territories.
You can apply with the IRS in just a few minutes, but each state has requirements for registering for a state employer identification number.
Consult your state's labor department to learn the details.
Taxes play a critical role in the hiring process, and if you neglect to factor them in from the beginning, it can cause issues for your company later on. There are three types of withholding taxes to consider: federal income tax withholding, payroll taxes, and state taxes.
Each new hire should submit a Form W-4 to determine how much federal income tax you will withhold on their check. Once your employee fills out the form, submit it to the IRS. You must also submit a Federal Wage and Tax Statement (Form W-2) for each hire, which specifies the employee's earnings and withheld taxes for that year.
All of your employees should get a Form W-2 by January 31st for the previous calendar year. Moreover, you will need to send the Social Security Administration Copy A of the W-2s by the end of February. If you hire independent contractors, you will need to follow a similar process with 1099-MISC forms.
If your state requires you to withhold taxes, you will need to fill out and submit those forms as well. Be sure to implement a system to keep your employment tax records organized. Most companies should retain records for at least six years. Along with helping you prepare tax returns, this can help you track your deductibles and your company's overall health.
It may seem obvious that you need to know a bit about each job position you are hiring for. But many companies fail to define what each role entails clearly. You must know what you are looking for to know where and how to find it. Take time to brainstorm all the tasks and projects you need help with.
Are any jobs consuming most of your time or distracting you from running your small business? Are there any responsibilities for which you need specialized skills and expertise?
Maybe you need help creating a top-notch logo or website. Perhaps you can't decide which fonts or color palettes best reflect your offering.
With each job opening, consider all of the responsibilities involved to determine what you will pay your new employees. Making a list of all your needs allows you to write an attractive and thorough job description. Make sure your job descriptions are well-written, clearly state the job's responsibilities, and briefly describe your company culture.
Once you have laid the groundwork, it is time to get out there and hire your new employees. To ensure you hire the right people, you must establish a clear and thorough process you can stick to and stay legally compliant to position your company for healthy growth. From finding candidates to gauging eligibility, keep reading for fundamental tips on the hiring process.
If you already have some employees, setting up a referral process could be the most effective way to find dedicated team members who fit cohesively. Consulting your employees about people who could be a good fit can save you ample time researching and reading resumes.
The only problem with using employee referrals for hiring new staff is it can limit your team's diversity, which can harm your company's performance in the long run. Just keep that in mind as you navigate the hiring process.
You also might tap into your professional network for potential candidates. And if you don't have any luck with that method, it's time to hit the job boards and job search engines.
Many job boards allow you to post jobs and attract potential candidates quickly. These sites let applicants filter job descriptions and postings and combine listings from the board and company websites to provide comprehensive results.
You can take it a step further by posting job openings on niche boards that cater to your industry specifically. And don't rule out the possibility of going through social networks to find qualified candidates. LinkedIn, Facebook, and Twitter help businesses of all sizes connect with top-tier prospects.
Furthermore, your company might benefit from working with a professional recruiter or hiring agency. Recruiters can pre-screen all applicants and find highly qualified candidates who are not currently on the job hunt. Before going this route, make sure the services are worth the costs. If you are working with a startup budget, a recruiter or agency may not be the best way forward.
When you start to compile your list of prospects, it is time to prepare for interviews. With each candidate, assess the position in question and go over the candidate's resume and cover letter.
Pour over the education, skills, and experience on each resume to compare it to the roles you need filling for your business. By organizing your requirements into a list.
Each interview should start with you describing your company. Touch on your company's background, mission, values, and goals so candidates can grasp the expectations and responsibilities involved.
Then, describe the interview process (e.g., format, length, etc.) to the interviewee. It's essential to keep your interviews organized and for all parties to understand the objectives and expectations.
For your interview to be impactful, you will need to acquire a wide range of information, including:
Throughout each interview, take notes so that you can refer to them for vital information with your team.
You might jot down details like:
While taking notes, however, don’t compromise your ability to listen to and engage with the candidate.
Near the end of your interviews, always allow candidates to ask questions. Along with providing them the opportunity to assess whether the position is a good fit, it will give you insight into how interested the candidate truly is in working for your company.
This is when you might tell a candidate when they can expect you to reach out, how the rest of the interview process may unfold, and the timeframe within which you hope to fill the position.
When your business administers a comprehensive hiring strategy, conducting background checks is a critical element of the process. Unless you know a potential candidate personally, all you know about them is what they tell you through their resume, cover letter, and interview.
By running background checks, you can get more information and more easily narrow down your list of job prospects to those who can most meet your company's needs and work with your team cohesively. That said, for background checks to work to your advantage, you must conduct them properly and use the proper services.
Most background checks happen before a business commits to hiring a candidate. They generally produce pertinent legal information, such as felony or misdemeanor convictions, as well as any judgments and records from the National Sex Offender Registry, Drug Enforcement Registration, FBI, and Homeland Security.
Conducting a background check can also verify that the candidate's employment and education information is genuine. Many employers perform reference checks at this point to confirm that the job prospect indeed worked at the places and went to the schools they listed on their resume.
Employment background checks typically come in one of two forms:
A pre-employment check is the most common, and you can conduct one at any time during the hiring process. Consider reserving these for the candidates on your shortlist for each job.
Employers can also conduct ongoing background checks on their employees. But you will want to tread lightly if you go this route and only run a routine check if there is a good reason for doing so, such as a recent conviction or concern in the workplace.
If you decide to conduct these checks on your employees, communicate it to your team members ahead of time via your company's policy.
You can run background checks through third-party services to save time and energy. However, for any service you use, make sure it is legally compliant and research the service to ensure it has a good reputation in the industry.
By conducting pre-employment background checks, you can reduce the likelihood of hiring the wrong people, as well as minimize your liability and potential legal costs. Furthermore, you can ensure that you fill high-trust positions with qualified candidates and help secure overall workplace safety.
Hiring a person who is not eligible for employment in the U.S. could result in significant fines and criminal penalties for your business. And it's up to you to verify that all of your employees can work in the country.
Ensure all new employees submit the first section of Form I-9 before they begin their first day on the job. This form states their employment eligibility, Social Security Number, and contact information.
Your new employees should also present a valid ID and employment authorization, which they could show you in one document from List A, like a Permanent Resident Card or U.S. passport. It is also acceptable for them to combine their U.S. driver's license and Social Security card. Typically, you will want to see this documentation before the end of their third day on the job.
You can usually get this by completing the Form I-9 and evaluating the supporting documents mentioned above. However, some states require you to enroll in the E-Verify program. If you operate in California, you shouldn't be required to use E-Verify.
Plan to keep each employee's Form I-9 on file for at least three years following the hire date or one year after the employee leaves your company (whichever comes later). But you do not have to submit any Form I-9s to the federal government.
So, you've gone through a comprehensive hiring process and have officially welcomed your new employees on board. You are almost ready to roll, but you still have a few things to take care of. Let's discuss reporting your new employees, getting workers’ comp insurance, determining which payroll method to use, and posting workplace notices.
First, you will need to report any newly hired employee to the appropriate state agency. It's best to handle this as soon as possible after the hire date.
Each state has requirements and expectations regarding these reports, so you will need to consult your state's employment agency to ensure you take all necessary steps.
The primary purpose of workers' compensation insurance is to provide coverage for employees, and independent contractors of businesses operating in the U.S. Depending on the policy, workers' compensation coverage includes full or partial wage reimbursement and medical and rehabilitation services. If there is a fatality on the job, the surviving family members of the employee or contractor will receive death benefits.
Each state issues different eligibility requirements, claims procedures, and compensation. Be sure to research the workers' compensation laws in your state; the state where your company's operations are principally based is what you will want to go by.
When preparing to obtain workers' compensation insurance, organize any relevant company information, such as a company description, number of employees, any operations manuals or employee handbooks, and various photos of your facilities. If you have checklists of your safety practices and procedures, be sure to include those as well.
You will want to go through a commercial insurance agent with ample workers' compensation experience. Check your business contacts to get a referral, or go through online resources to find reputable agents and get coverage estimates.
As with many other business areas, you will want to take time to find the best coverage possible within your budget. Rates are typically higher for new companies that have not established a claims history.
Your workers' compensation premiums will depend on what type of business you run and what kind of jobs your employees work. At the same time, each carrier will consider different factors when rating coverage; most determine premiums upon every $100 of payroll.
After researching and speaking with various carriers, choose a carrier and purchase your policy. Pay attention to all underwriting requirements on your policy, and don't forget to update your carrier any time an employee joins or leaves your team.
Once you start adding employees to your team, it's time to establish a system for paying them and managing your payroll taxes. You essentially have three options:
Many business owners opt for a payroll service to save time and energy. Some services will work with your insurance and report your new employees, among other responsibilities.
No matter how you decide to handle payroll, you will want to grasp how it works to ensure your company stays in good standing. Payroll consists of paying your employees, paying your federal and state payroll taxes, and filing your tax forms.
The process of paying your employees can be complex because several factors are involved. Not only do you need to track each employee's work hours, but you must also factor in withheld tax before writing and sending out checks. Depending on your company's size, you will need to fulfill your payroll taxes and filings monthly or quarterly.
If you choose to do payroll yourself, make sure you use reputable online software. While you must invest time into inputting data, you can get software that automates some of your tasks, saving you time. Just be sure to check over results and keep your software up to date.
All businesses must display specific posters throughout the workplace that state the employer's responsibilities and employee's rights. Certain states require companies to show additional signs. You can acquire federal and state posters for free.
Hiring the right employees is a lot of work, but when you begin building your super-team, you'll quickly realize it is worth all the time and energy you put into it. That said, it's essential to go the extra mile when managing your employees so that your team stays happy and productive and your company hits its goals and milestones.
Finding job candidates with a passion for your company's mission and values is a great start. Still, you will prioritize training your staff and investing in their professional development. Not only will this help to maintain team morale, but it will also boost overall performance in your business.
Look for workshops and courses worth investing in, or opt for more budget-friendly opportunities like scheduling lunch sessions where you share your expertise with your staff on a specific topic. It's also a good idea to ask your employees to teach their skills and knowledge to other team members.
In your daily business operations, make sure your managers communicate what you expect of your employees and incorporate your employees' input into your decision-making process. Also, figure out how to create a company culture that motivates your staff.
Different ideas and incentives energize each individual. Learning how to connect with each team member and foster good relationships can go a long way in forging a team that truly loves working for your business. And it won't take long for other job prospects to take notice of your workplace success.
Furthermore, think of how you can offer a rewarding work policy to your team. Along with paying good wages, you might consider offering flexible working hours, making your dress code more casual one day a week, and publicly acknowledging employees who exceed expectations.
Taking care to make your employees feel valued can do wonders for drawing top talent to your business and increasing creativity and innovation over the long haul.
Needing to start hiring employees is a great place to be. Now, you just have to begin attracting great candidates and thoroughly handle the hiring process so that you can build a strong team of dedicated workers.
While the tips above can get you off to an excellent start, you will learn a lot along the way. Keep your company's mission and values at the forefront, and remain adaptable to an ever-evolving landscape as you develop a workplace where everyone wants to participate.
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