Moving from owner-entrepreneur to employer is a big step and should not be taken lightly. Yet employing your first worker can open new doors for your business, however, it is vital to get it right. It is not just about finding the right person, you also have to make sure that you follow the right hiring process. Here we explain the five most important factors you should take into account to make your first hire a success.
1. Correctly define the role for the candidate
One of the easiest mistakes to make if you are not experienced as an employer is to hire for a role that is not clearly defined. That causes two problems: first, you will find it more difficult to find the right employee if you are not sure what their role in your company is to be. Second, if the new recruit is not sure what they need to do to fully perform their duties it can lead to problems for you as the business owner. So, make sure you fully define the job specification of your first employee.
2. Do not hire because you are under pressure
Permanently employing a new worker just to take care of an increase in workload can cause problems as you may not be able to find work for the new employee to do once the surge subsides. It is also worth knowing that hiring is best performed with plenty of time on hand, as finding and interviewing candidates is not a process to be hurried.
3. Consider a contractor
If your number one problem is workload, consider hiring a contractor instead of a full-time employee. Contractors are flexible: you can terminate the work of a contractor much more easily than a full-time employee. To avoid strenuous paperwork around contracting, including tax issues such as IR35, you should consider registering with an umbrella PAYE company.
4. Hire employees to either make or save money
It is important that any employee you add to your organization fulfills one of two roles: saving the company money or generating revenue. For example, a permanent employee can help you save money you are currently spending on outside contractors or companies that supply services. Or your new employee can help you generate more revenue by performing a sales function. Don’t hire for roles when neither the savings or revenue criteria is clearly fulfilled.
5. Always follow through with background checks
Taking on your first employee is a very big step. Be aware that legal obligations can make it difficult to make an employee redundant, and it could be a costly process if you have to do it. For this reason, you should always background check a potential employee, including following up on the references they provide. Also, check they have the legal right to work in your country because employing an illegal immigrant can lead to serious fines.
Hiring is a complex process and entrepreneurs who are new to hiring would be wise to read up on the various points about hiring and recruiting and to consult entrepreneur networks to share experiences with other company founders that can help them get the best out of their first hire.