3 Vital Things To Consider Before Hiring Your First Employees

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Congratulations! Your business is expanding and it’s time to hire some help. If you’re thinking about employing people for the first time, it’s a major responsibility. Here are 3 essential factors you’ll need to consider before bringing your new team on board.

  • The level of your financial commitment 

As a first time employer, it’s essential that you plan effectively for the costs of employing others. 

Firstly, you’ll need to budget for the actual recruitment costs. How much will it cost to advertise, or to hire an agent to find candidates for you?

Next, how many employees will you need? If you’re running an operation 24/7, you’ll probably need 5 employees to ensure that each day is covered by one person. This takes into account days off, vacations, sickness cover etc. 

Then, the actual costs will be far higher than the basic salary. Add on your 401K contributions, health insurance, uniforms, employers liability and other insurance costs, holiday cover, work vehicle costs, cafeteria  etc . As an absolute minimum, (depending on where you’re based) calculate 1.5 x basic salary for each employee, and add even more if you need to factor in incentives and bonuses.

Ask the question – how much will I need to cover my total employment costs for the first twelve months? Will my  bottom line sustain this additional expense? 

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  • The need to clarify expectations

The right hiring decision can take your business to the next level –while bad decisions can be disastrous. Clarify your expectations about the roles by writing job descriptions before you even advertise. Once you understand what they’re expected to achieve, it’s easier to clarify the character traits a person will need to succeed in each role. 

Drafting employment contracts yourself will save costs, but it’s essential to have them reviewed by a specialist employment lawyer to ensure they comply with the latest legislation. An expert will ensure that you’re protecting your interests as well as the rights of your employees.

If you’re really well-prepared for growth, an employee handbook can be a great tool to define behavioural expectations which aren’t in the contract. You’ll want the handbook to be written in a style that reflects the culture of your organization but again, a legal review to ensure you’re compliance with all state and federal employment and anti-discrimination legislation can save you from expensive litigation at a later date. 

  • Do you need to employ at all?

Given the costs and pitfalls of taking on full-time employees, it may be worth asking yourself it the jobs you need doing could be achieved, even remotely, by freelancers. 

With an ever- growing army of highly-skilled professionals available on a by-project basis, many businesses are accessing talent from around the globe, without the heavy employment costs and with far greater flexibility.  

With the increasing use of video conferencing, and sophisticated project management software which makes collaboration, even across different time-zones, easy, the use of freelancers is an option that is definitely worth considering. 

In summary, taking on your first employees is a big step. Considering the implications and the options open to you will set you on the road to success.

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Jeremy Kaplan

A 50-something year old lifestyle, career, and education blogger based in Atlanta, Georgia. Years of experience in the office setting working with others and still loving it year-after-year.

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