A Complete Guide to Hiring Your First Employee

Despite the concept that entrepreneurship is a solitary adventure, at some point you will need a team of efficient workers. After all, you can’t do everything yourself, nor would you be good at it if you tried. Ask any decent manager and they will tell you how important a team of dedicated employees is to reach new heights and achieve new goals as you grow your business. Beyond cash flow, employees are the lifeblood of any business. And for small businesses, the stakes get even higher.

Key Factors in Hiring Your First Employee

In any business, you will hit a point where you need to seek help from others in order to be competitive and grow. According to a study by the Conference Board of Canada, it used to take approximately 56 days to identify a potential candidate and fill a position within an organization. The Society for Human Resource Management reports that it takes about 36 days on average to complete the talent acquisition process. The time to fill a position varies from industry to industry, and there have been instances where companies do it the same day the opening appears, but this is unlikely. For a small business owner, hiring involves a lot of time and money. Keep this in mind when you are planning to hire for the first time.

Basic Requirements to Becoming an Employer

Hiring invites a new set of legal obligations, liabilities, paperwork, and, yes, expenses, but not just monetary ones. It costs money to recruit, hire and train a new employee. A hiring mismatch, however, can result in high turnover, absenteeism, increased healthcare costs and even workplace theft and violence. In order to protect the reputation of your freshly started organization, you need to first have a solid understanding of the basic requirements of being an employer.

·        Eligibility as an Employer

The Canada Revenue Agency (CRA) considers anyone eligible to hire if they can provide salaries, wages, bonuses and vacation pay, or some taxable benefits or allowance, such as board and lodging. All you require is a registered Business Number (BN) with a payroll deductions account prior to the employee being hired. To register for the Business Number and Payroll Deductions account, you simply call the CRA’s toll-free number, which is 1-800-959-5525 in English and 1-800-959-7775 in French. Complete the request for a business number by sending a copy of form RC 1 to the CRA, or you can register online at www.businessregistration.gc.ca. Keep in mind that you need to open the payroll program account before the due date for the first remittance which is the 15^th day of the month.

·        Evaluating Your HR Needs

Human resources are important for most businesses, but acquiring them this is not easy. You need to combine the right number of employees with the appropriate set of skills, abilities and drive.

You can meet the HR needs of your startup by:

• Reviewing how your work is processed
• Hiring freelancers on a contractual basis for temporary or skill-specific projects
• Simply hiring temporary employees

To do this properly, you need to first understand whether you require a permanent or temporary employee. Knowing your exact requirements will better help you judge a candidate.

Recruiting permanent employees increases your overhead significantly, with no sign of immediate financial return. So, you, as an employer, need to calculate the cost-effectiveness of your decision. If you hire without doing this or understanding your abilities as an employer, you may be faced with the uncomfortable task of downsizing. And letting go your first employee because of a mistake you made is not a good experience.

Tips to Hiring Your First Employee

Once you have evaluated your eligibility as an employer, it is time to look for the perfect candidate. To guide you through your first hire, follow these steps.

1.    Don’t Go by Instinct

Chances are that a lot of the résumés you will review contain inflated facts. Any negligence on your part in the hiring process could cause you to be accountable and even sued as may be held responsible for your employee’s behaviour. It is, therefore, recommended to check the backgrounds of anyone you are thinking about hiring. This includes verifying prior employment and doing a criminal records check. Even checking their credit history, driving record and drug testing is not off limits. While most of this information is publicly documented, some requires the consent of the applicant to be released, such as education and medical records. Another tip would be to ask for original educational credentials, as manufacturing a fake diploma or degree is not that difficult today.

2.    Hire Someone Who Is Passionate

When you hire someone passionate and dedicated to your product or service, they tend to work better compared to hiring based on other qualities. A new hire can often overcome a lack of experience or communication skills if they are passionate enough about their work.

3.    Value Potential over Experience

Rather than simply seeking out the most qualified, experienced or skilled employees, look for the ones with the most potential. There are reasons for this:

1. When you are just starting out, highly skilled employees may be wary about working for you because you are not an established organization.
2. More importantly, people with higher potential will be highly motivated to prove themselves. In a way, you form a symbiotic relationship with them by giving them that chance. In return, you get dedicated and highly motivated employees.

4.    Avoid Rushing

Avoid hiring fast to avoid hiring unwisely. Your first employee is going to be instrumental to the development of your company and it is critical that you take the time you need to bring the right one in, suggests Reza Chowdhury of AlleyWatch. Often founders rush to hire and pick the wrong candidate. Your first employees are going to shape the future of your brand, so take your time.

The employees you hire in the early days of your business are always going to be special and different from ones you hire down the road. Not only do they help set the tone for your business, but they help build the company culture and how your business responds under new situations.