Hiring your first employee isn’t exactly a cakewalk. There is a lot of tedious paperwork and things happening in the background that need to be addressed to make sure everything is legal. Sourcing talent and conducting interviews is only one small step in a large process. If the hiring process seems a little intimidating: don’t worry.
Like anything else, the more you do it, the more skills and experience you will build. Typically, the hiring process is managed by the HR department in medium and large-sized businesses. Unfortunately, small businesses usually lack HR employees, and need to execute the hiring process on their own.
Get Your Employer Identification Number
The first step is making sure your business has registered with the government for tax purposes. In order to hire employees, the first thing you need is an Employee Identification Number (EIN). Registering for an EIN is relatively quick and painless; in fact, you can do it online in a matter of minutes if your business is located within the United States or United States territories.
Contact the Department of Labor
The next step is to register with the Department of Labor. Unsurprisingly, you need to register so the state can collect more taxes. Varying state laws tax businesses to compensate for unemployment, and you’ll need to pay your share too (I can already hear the groans). The DoL web page is laughably simple, though it does provide the phone number and fax (who uses fax anymore?) number for your state’s commissioner.
If you run a small business, chances are you’re going to need to conduct the interviews because most small businesses don’t have HR personnel. Sourcing talent can be difficult too, though you can reach out to staffing agencies or mine LinkedIn for qualified candidates. It is, however, best to stay away from classifieds and sites like CraigsList, because they don’t generally attract the best talent.
And when you’re conducting the interviews, don’t only pay attention to a candidate’s qualifications. Instead, take note of their personality and core values. Ask yourself, “Does this person belong to the team I’m trying to build and the company culture I’m trying to cultivate?” If the answer is no, it’s probably best to keep searching for other candidates.
Perform Background checks
If you think you’ve found a candidate that ticks all the boxes and would be an asset to your business, hold your horses – there’s another step to perform before you can pull the trigger on the hiring process. It’s time to perform a background check to make sure everything is on the up-and-up. Do be aware that you are not legally obligated to perform a background check.
If you fail to perform a background check, however, you could inadvertently hire a criminal or felon. Remember, you’re allowing an external individual inside your business, so it’s best to be diligent and handle background checks with care. If you don’t know how to perform a background check, there are third-parties that provide that service.
Depending on the industry you’re in and how many employees you have, you may want or be required to purchase workers’ compensation insurance. Be aware that many states make workers’ compensation mandatory with few exceptions. Some of the most minuscule employers are excepted, but the vast majority are not. You’ll need to do some research on the rules in your specific state.
Collect Forms from New Hires
Part of the tedious process of on-boarding a new-hire requires collecting documents. More specifically, you’re going to need to collect their W-4 tax forms, which is a document that determines withholdings. In addition to their Social Security Number, name, and address, the W-4 form also requires the employer’s EIN. If you don’t already have the document, you can download it for free online.
Create a Payroll System
Payroll is, generally speaking, not the most fun and exciting thing to do in the world, but it is crucial to the success of your business. The manual process is rather time-intensive and has a bit of a learning curve, but there are better ways than to use archaic paper-and-pen methods. It’s 2019, and companies have created solutions to make things go faster and smoother than ever before.
For instance, there is payroll software you can purchase and install to keep track of payments, just don’t forget to back up the data! Better yet, a more elegant solution is to use a cloud service that you can open on any device that runs a web browser. Another benefit of cloud services is that they make multiple copies of their data and regularly run backups, so you won’t have to worry about losing data.
Fill Out More Forms
The next step is to fill out more forms, namely the I-9. You’ll need to fill out this form for every new employee. Basically, this form proves to the government that the person you’re employing has a legal right to work in the United States. Illegally employing someone could get you into hot water with the law. Running a business is already hard enough without legal consequences, so make sure you store your I-9’s in a secure location.
Some, but not all, small businesses offer benefits to employees who earn a salary. In addition to health insurance and dental, you may want to consider retirement packages and 401(K) plans. It isn’t a requirement, and you may not opt for benefits if you are only hiring part-time or hourly employees. However, note that benefits make a position much more appealing, and health insurance and retirement plans help to attract better talent.
Small businesses have a lot of moving parts, and each facet of your business demands care and attention. When you’re busy with the hiring process and the day-to-day operations of your business, it’s easy to get sidetracked and forget about things like digital marketing. Instead of letting your digital marketing campaign wither and die because you forgot to water it, reach out for the help of a qualified web design and digital marketing professional to grow your business.