How to hire an employee for your startup in 9 simple steps
So, you’ve decided it’s time to bring in some help for your startup business.
Finding the right fit is essential, whether you need administrative help, delivery people, programmers, customer service, or marketing advisors. But where do you begin the process of startup hiring?
Here’s a step-by-step on how to hire new employees at your startup.
1) Determine if it is necessary to hire an employee
Even if you’re an early-stage startup, hiring new employees can take pressure off you and your existing employees. If you already have staff, you might see signs of burnout—that’s how you know it’s time to bring in some relief.
For example, suppose you’re ready to hire your first employee in Texas. Before you post that job opening, complete a small business health checklist—then ask yourself:
- Will you need permanent or temporary help?
- How many hours will you need help each week?
- Will the new employee need training or specialized skills, or can they start immediately?
- Can you afford to bring in someone?
- Could you outsource this task to a freelancer rather than hiring staff?
For example, if you need temporary help to get through a busy quarter, a part-time team member, seasonal staff person, or independent contractor may be enough support.
However, a full-time employee might be what your business needs—they can free up your time so you can focus on the essentials and take pressure off an exhausted staff.
2) Comply with legal requirements
Before bringing on temporary help or permanent employees, you must file for a tax identification number (Employer Identification Number) from the IRS.
The Employer Identification Number (EIN) is like a Social Security Number for your business. Even as a sole proprietor hiring employees, an EIN can help to guard you against fraud.
If you didn’t file for an EIN in the early days of starting your company, the IRS offers a simple enrollment process on their website that provides a number immediately. Alternatively, you can set it up by fax or mail.
Your business must comply with the US Department of Labor (DOL) laws. The DOL laws require most companies to display posters of employees’ rights in a prominent location. Often, you can download and print relevant employee posters rather than buying them.
Remember that your state may also have state-specific labor laws, such as minimum wage rights and employment age requirements, to consider when hiring.
3) Outline an employee benefit plan
As a business owner, you must decide which benefit options you want to offer your first hire. Employee benefits can go a long way to attracting and retaining the best candidates—if your business does not provide much or any perks, you may lose the best talent.
However, some employee benefits are compulsory while others are optional—and the requirements can vary by state. For example, if you’re hiring your first employee in Georgia, your startup business may need to have:
- Social Security taxes: All businesses must pay a portion of the employee's taxes.
- Time off benefits: The Family and Medical Leave Act (FMLA) requires certain employers to provide up to 12 weeks of unpaid leave.
- Small business insurance: Depending on your state, you may need small business insurance like a workers’ compensation policy.
- Disability insurance: It’s required for businesses in California, Hawaii, New Jersey, New York, and Rhode Island.
- Unemployment insurance: Check with your state to find out if you must register for unemployment insurance.
However, you might consider offering more than the basic employee perks. Many talented people seek comprehensive benefits like health insurance, retirement savings, and paid time off.
4) Write the job description
Before you post a help wanted ad to hire the right candidates, you need a job description. And to do that, it helps to take the time to do some research.
For example, check out the job descriptions that other companies use for similar roles. It will give you an idea of the right skills and experience to look for before you hire employees. You can also discover what positions your competitors are advertising and the benefits they are offering.
Ideally, you want to make your job offering appealing, so the employee is excited to apply for the role. Here’s what your job description should include:
Make sure to use the correct title. For example, if you need a secretary, use modern terms. Most job seekers look for "administrative assistant" roles rather than the outdated term of "secretary."
Some employers use "ninja" or "rockstar" in their job descriptions. But job seekers do not search these terms, so you may not get many resumes. Using that sort of language may turn off applicants because it comes across as unprofessional and disorganized.
Include the job responsibilities you want your new employee to do. Perhaps you need someone to answer the phones, but you also want them to spend time entering accounting data. You should also list:
- How many hours per week they will work
- Whether it’s a seasonal, temporary, permanent, or contractor position
- The schedule and if they will work nights, weekends, holidays, or be on-call
Perks and benefits
If your startup offers benefits, be sure to list them! Include things the applicant would want to know:
- Whether you provide flexibility to work from home
- Available opportunities for professional growth
- Employee health and retirement benefitsPaid time off, vacation days, or sick pay
Wages and salaries
Now that you have information about what similar jobs pay in your area, you can make your posting competitive. For example, suppose the average wage for customer service in your area is $10 per hour. You can list your job at $11 or $12 per hour to attract more applicants. Including the wage also shows that you are a transparent and straightforward employer.
5) Post your job opening
Your recruitment process starts with advertising your help wanted ad. Use the traditional job posting outlets but also don’t be afraid to get creative to find employees for your startup:
- Post job openings on your website. Even if a job seeker doesn’t find your listing through your website, they will check your site to make sure your company is legit.
- Use online job boards like Indeed, LinkedIn, and Monster.
- Put out the word on social media by sharing the posting your company’s LinkedIn, Facebook, Twitter, and Instagram profiles.
- Consider posting a video job ad. You can record an advertisement on your phone showing your business or yourself, do a voiceover reading of the job descriptions, or hire a professional to put it together for you.
- Share the job opening with local professional and business development groups.
- Use word of mouth. Ask your friends, family, and associations for a referral before hiring employees.
- Check with local colleges and universities. Most schools have career centers, so be sure to post your opening there.
Getting your job description in front of potential employees is vital. After all, your best applicant might not even be looking for a job. But if they see the posting pop up on social media, you might have an opportunity to hire them away from their current employer.
6) Reduce your list to the most qualified candidates
You can easily spend hours upon hours reviewing potential candidates' applications. However, you can save yourself time by:
- Weeding out any resumes or cover letters with spelling or grammatical errors.
- Scratching off anyone who didn't comply with application instructions, such as failing to provide a cover letter.
- Scheduling a short phone interview to ask preliminary questions about their skill set, experience, and abilities.
A phone interview is an excellent screening tool. On the call, note characteristics such as confidence, humor, curiosity, and anything else that may be relevant to your workplace or the job.
After your screening, you should have 2 or 3 top candidates. Then, you may need to do a second round of phone questions or schedule face-to-face interviews.
7) Prepare for the interview
Now that you have a shortlist of candidates, it’s time to prepare for the interview process. Start by making a list of questions you want to address. Whenever possible, offer open-ended interview questions:
- Why are you interested in this position or company?
- Tell me about your experience in this industry/position.
- What would you say are your weaknesses and strengths?
- In what sort of work environment do you thrive?
- What are your professional goals? How do you want this job to help you achieve them?
Keep in mind that startup business owners should hire people for potential, not just track records. Evidence of past success isn’t as important as a good culture fit for your company.
In getting to know your candidate, you might ask about their hobbies, interests, and personal life. However, don’t get too personal—some questions are off-limits.
If you are not familiar with the Equal Employment Opportunities Commission (EEOC), it’s a set of laws protecting candidates from discrimination. Essentially, it prohibits asking direct or indirect questions about:
- Race or religion
- Pregnancy or family plans
One gray area is the applicant’s age—check with your state about the legal age to work. In some states, it is 18, but some states require work permits for employees between 14 and 17 years.
8) Make the job offer
Congratulations! You’ve done the research and made it through the interviews to find your top talent. Now you can make them a job offer. A job offer is an agreement that you intend to hire the applicant. They can be formal or informal and given orally or in writing.
A word of caution: Don’t wait to offer the job to your choice applicant. Job seekers typically apply to many positions at once and may receive competing job offers. Here are the best practices for offering a job:
- Act fast
- Make the offer by phone
- Show excitement about hiring them
- Share the reasons (experience, skills, qualities) that led you to choose them
- Discuss salary or hourly pay rate
If your candidate doesn’t respond right away, ask for a decision. Some job seekers want some time to think about the offer before answering. You should also be prepared to negotiate pay and benefits. For example, if your favorite candidate is already employed, you might need to counter with a higher offer or a few more days of vacation to entice them to work for your startup company.
Once you get a verbal commitment, send a written offer letter by email or traditional mail.
9) Begin the onboarding process
Onboarding is the last step of the hiring process. It’s how you introduce new hires to your company culture and give them the resources they need to succeed in their new role. A study by BambooHR showed that employees who felt their onboarding experience was effective were over 29 times more likely to have job satisfaction. So, onboarding is a pretty big deal for your startup company.
If you already have an onboarding process, consider revisiting it to follow these best practices:
- Consistent process: Use the same onboarding process for all new hires.
- Think of onboarding as the start of a relationship: Make employees feel welcome, appreciated, and comfortable.
- Connect beyond the first day: Your new staff will need attention and guidance after their first day or week on the job. Staying connected can help keep them engaged and well organized.
You’ll also need to collect onboarding paperwork to document your staff properly. Depending on your industry and location, you may need a:
- Signed job offer letter
- NDA (non-disclosure agreement)
- I-9 form proving the right to work in the USIRS W-4 form for tax withholding information
- Direct deposit authorization form
- Acknowledgment of company policies
If you’re offering benefits, you’ll also have your new team member complete enrollment forms for your company's health plan, retirement plan, group life insurance, and other perks you may provide.
Finally, ensure your new worker has the resources they need to do their job—computer logins, tools, communication channels, and a work schedule (including scheduled breaks).
You might also consider providing them with a mentor or someone who can help them reach their full potential in their new position.
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