How to hire a part-time employee for your small business in 9 simple steps
Hiring a part-time employee can make a huge impact on your small business. But small business owners may not have the knowledge or experience to navigate the hiring process successfully.
To help you take the next step, here's a comprehensive guide on how to hire a part-time employee for your small business.
1) Decide if it’s the right time to start hiring part-time employees
Hiring a part-time employee can be an excellent option to manage growth in your small business. It’s a big transition for any small business owner. Before you take the first step to look for help, do a business health checkup. Then, ask yourself these questions to help you decide if now is the right time to hire:
- Are you turning down new clients or new projects from current clients?
- Is there a group of tasks that someone else could do to increase profit or save you time?
- Do you have an idea for a new product or service line but not enough time to implement it?
- Are you thinking of opening a second location?
If you answered yes to any of those questions, now might be the right time to hire someone.
You must also decide the number of hours you want a new employee to work, and if a part-time, full-time, or independent contract worker best fits your needs:
- A part-time employee generally works fewer than 30 hours per week on average.
- A full-time employee works at least 30 hours per week (or 130 hours per month).
- An independent contractor (or freelancer) can work 0 to 40 hours or more per week and can be a good choice for seasonal or short-term support.
An independent contractor can save on some of the costs associated with hiring an employee, especially if you're considering a full-time employee. According to the U.S. Department of Labor (DOL), the cost of employee benefits alone can account for nearly 30% of total employee compensation.
However, you have more control over how an employee performs the duties you assign compared to an independent contractor.
A part-time employee can be the right choice if you're looking for long-term support for your changing needs as a small business owner.
2) Create a clear job description
A clearly defined role and job title are crucial for the success of your hiring experience. Your company’s job description should spell out the skills, experience, and duties the position requires.
Start by listing all of the tasks you want the employee to perform. Then, think about the type of person you want in the role and the pay range you're willing to pay.
Emphasize the value your company places on part-time staff, mention the expected work schedule, and include the pay range in the job description to help attract quality candidates.
Keep in mind that federal laws and state laws can set the minimum pay rate for part-time employees. The federal minimum wage is $7.25 per hour, according to the Fair Labor Standards Act (FLSA). However, if your state has a higher minimum wage, you must pay the higher of the 2 amounts.
For example, if you’re hiring your first employee in California, the minimum hourly wage is $13 if you have 25 employees or less (or $14 if you have more than 25 employees).
Locate your state labor office to discover the minimum pay for part-time and tipped employees.
3) Determine who will do the recruiting
Hiring part-time employees can take a significant amount of time. If you are the only person in your business, or if you have a very small team, you may not have time to do it. You might consider outsourcing the hiring process to a recruiter.
A recruiter or staffing agency can match job candidates to your opening, complete background checks, and verify credentials. It can be a good choice if you're struggling to fill your position or don't have time to commit to the hiring process.
However, a headhunter can be impractical for a small business owner because of the cost. According to Indeed, the average fee can range from 15% to 40% or more of the first year's wages.
To save money and do the recruiting yourself, create a system to organize applicant information. You might keep a filing system with folders or use a spreadsheet or other software to screen and manage potential candidates.
4) Get the word out that you’re hiring
Finding a great employee is easier if you have a larger pool of applicants. Know where to post your open position to get it seen by as many qualified people as possible. For example, job seekers looking for part-time jobs may not use the same platforms as full-time workers.
Numerous job sites exist that cater to part-time work:
However, don't overlook the power of your existing network. Referrals can be an excellent source to find quality candidates. You may find the best employees from friends, family, neighbors, and former co-workers on LinkedIn.
5) Select, screen, and interview candidates
With any luck, you'll receive several applications from your job posting. Screening techniques can help to narrow down your options while also saving you time during the interview process:
- Look for spelling errors on the resume and cover letter
- Check for a non-professional email address
- Review skills and experience for relevancy
- If you asked questions as part of the application, ensure the applicant answered them
A phone screening is another great strategy. It isn't meant to replace an interview, but it is an excellent tool to vet candidates. You can discover if the job seeker is still interested, double-check basic skills, and get a sense of their personality.
Ideally, you would find your perfect candidate after a single interview. It's more likely that you'll need to interview 3 to 5 of your strongest candidates before extending a job offer.
During the interview, ask open-ended questions. For example, a small-business owner hiring their first employee in Georgia might ask, “Can you tell me about a situation where you were left to figure out a solution on your own?”
You can also ask interview questions about their experience and hobbies. But know where to draw the line. According to the U.S. Equal Employment Opportunity Commission, many topics are off-limits during an interview:
- Sexual orientation
- National origins
- Marital or family status
Ask the interviewee to provide at least three references, and call them! Talking to references can help you verify skills, experience, and qualifications.
6) Make an offer
Once you find the perfect candidate for your part-time position, don't wait too long to offer them the role. If you don't act fast, you may be forced to hire the second-best candidate or start the process over from the beginning.
Call your top contender to let them know they are your first choice. To start building a relationship, be professional but enthusiastic—express how impressed you and others are with their background and skills.
You may need to negotiate pay. Explain the pay rate and other perks you plan to provide and follow through with a written job offer. The letter should include:
- Starting pay
- Benefits (if any)
- Payroll schedule
- Start date
- Number of hours per workweek
- Conditions of employment (background check or a drug screening test)
For help, visit Indeed for offer letter templates you can follow.
If your candidate asked for time to consider the offer, don't worry—that's common. However, you might set a deadline of three days to respond and offer to jump on the phone if they have any questions while thinking through their decision.
7) Set up a payroll system
If you’re hiring your first team member, you’ll need a payroll system. But don’t sweat it—as a small business owner, you’ve may have already completed many of the steps to set it up.
- Get an Employer Identification Number (EIN) from the IRS. This is your employer tax ID used to pay taxes for your business and its employees. You can apply for an EIN online and get your number instantly.
- Collect information from your new team member, including full name, start date, Social Security Number, date of birth, and current address. You'll also need Form I-9 to verify the employee’s eligibility to work in the US and Form W-4 for tax withholding.
- Choose a pay period that best fits your company's cash flow. You might opt for weekly, bi-weekly, or monthly paydays.
- Pick a payroll system that's easy to use and will grow with your business. Doing it yourself can be time-consuming and lead to errors. Many small business owners outsource payroll to a bookkeeper, accountant, or a payroll service like Gusto, QuickBooks, or OnPay.
Your payroll process should include depositing and reporting employment taxes:
- Federal income tax
- Social Security and Medicare taxes
- Additional Medicare taxes
- Federal unemployment tax
- Self-employment tax
The IRS has a guide to employment tax due dates you can reference. You must also prepare and file Form W-2 at the end of the year for each employee.
8) Comply with legal requirements
Hiring new employees can introduce new employment laws and guidelines that you must follow. For example, the Affordable Care Act (ACA) requires you to offer health insurance to staff if they work at least 30 hours per week or 130 hours per month. If you do not, you may face penalties.
Additional required benefits can include:
- Paying at least the minimum wage for your area
- Recording and paying employment taxes
- Buying workers’ compensation insurance
- Providing disability insurance
- Offering leave benefits
- Registering for state or federal unemployment insurance
- Displaying posters about employee rights in the workplace
You may have additional legal requirements beyond what’s listed here. Check with your local Small Business Association office or consult an attorney for legal advice if you’re not sure what’s required.
9) Onboard your new part-time worker
A great onboarding process can help you get off on the right foot with your new employee and set them up for success. If you haven't given much thought to onboarding, here are some tips to help:
- Prepare ahead of time by copying the employee handbook, cleaning up their work area, creating software logins they might need, and setting up the schedule for their first week or two.
- If the government closely regulates your industry, make sure your new hire follows the rules to remain compliant.
- Share your company’s vision and culture, meeting schedule, and employee expectations.
- Set up a short weekly meeting for the first 2 to 3 months to keep them feeling connected and engaged.
As a small business employer, understanding the hiring process and what you can do to stand out from other companies can help you get ahead when looking for the best candidate. Competitive pay, flexibility, and a great work environment are especially helpful when hiring part-time employees.
However, whether this is your first employee or you employ many, having proper insurance in place can protect you, your company, and your team. And we’re here to help. Small business insurance from Huckleberry can get you covered in less than 5 minutes. Get a free business insurance quote today—no paperwork and no commitment required.