5 steps to take before hiring a full-time employee

Hiring is equal parts exciting and overwhelming. A new full-time employee has the potential to propel your business forward, but the hiring process itself can be tedious.

Fortunately, there are tangible things you can do to set your business up for success during the hiring stages and beyond.

Read on for five practical steps to take.

1. Decide if you need a contractor or an employee.

When business is thriving and you’re busier than usual, you might assume that hiring a full-time employee is the only way to maintain operations. But that’s not necessarily true. It’s crucial to evaluate whether you actually need a full-time team member before you dedicate time and resources to the process, said Courtney Barbee, co-owner and COO of The Bookkeeper, an accounting firm for small businesses.

Barbee said she prefers to offer overtime or hire contractors before developing a full-time position. That way, if business slows down, she doesn’t have any underutilized employees.

“Once we have run the numbers and found that we are paying enough in overtime and contract work to sustain a full-time employee (over three consecutive months),” she said, “we begin the hiring process.” Whichever route you take, be sure you’re classifying your employees correctly and abiding by labor laws. Failing to do so could result in big fines.

2. Examine your finances.

Hiring a full-time employee is a big financial investment. Not only do you need to pay your employee’s salary, but you also need to allocate money to benefits, health insurance, training, and work materials like a computer and desk.  

It’s critical to make sure you have the funds necessary to pay the employee, said Nate Masterson, CEO of Maple Holistics, a company that sells natural, cruelty-free personal care and beauty products. “A small company’s financial status is much less stable,” he said, “and you want to make sure that hiring someone new does not put your company’s financial stability at risk.”

To ensure you can afford to hire, sit down with a financial expert to assess your business’ cash flow, profit and loss statements, and monthly expenses. If you’re in a good place but need a little extra help, you may also want to look into financing options, like a term loan.  

3. Clarify the employee’s role.

Once you know you have sufficient funds to hire a full-time employee, you need to determine what that person will do. Taking the time to define a potential employee’s role is key.

“Before beginning the hiring process, we create a document that outlines all of the possible tasks that the employee could do,” said Vladimir Gendelman, founder and CEO of Company Folders, a business that sells customized office products.

Take into account ongoing projects, like developing a new marketing strategy, quarterly or annual projects, like planning a summer conference, as well as day-to-day tasks, like answering emails and coordinating team meetings.

“Based on that,” said Gendelman, “we know what skills are required, which skills are beneficial for candidates to have, and the soft skills we need to look for, too.” From there, you’ll be able to write an accurate job description and determine which types of candidates to target.

4. Establish an interview protocol.

Establishing a clear, company-wide interview process helps prevent confusion and ensures that you get what you need from potential candidates. Masterson recommended sitting down with an HR representative to brainstorm interview questions. Ideally, you should design questions capable of “assessing both the interviewee’s skillset,” he said, “as well as their ability to fit in with other personalities in the office.”

It’s also a good idea to determine who will conduct interviews, said Gendelman, and which types of tests (if any) you’ll administer during the interview process.

5. Implement a training plan.

Finally, spend time developing a training program for employees before they start working, said David Pagotto, founder and managing director of SIXGUN, a digital marketing agency. A strategic, thorough training plan “should aim to get your employee into a productive state,” he said, “while ensuring they have all the tools they need at their disposal in the shortest possible time frame.”

Figure out what type of training your new hire will benefit from most — whether it involves shadowing someone else, for example, or simply reading a manual of company policies — as well as how long the training process will take and who will lead it. Once you nail down these details, you can create a realistic training budget and onboarding guide so the employee can hit the ground running.

Hiring a full-time employee for your business can lead to newfound growth and success. While it may seem daunting to find a good candidate, taking actionable steps to improve your business’ hiring process can help.

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