I Need to Hire An Employee—Now What?

Congratulations—your business not only survived the economic downturn, but it’s growing—and now you need to hire your first employee. You might be a great pastry chef, shoe shop owner, or candlestick maker—but if you don’t know a W-2 form from a can of WD40, you might have a big problem.

Relax—hiring your first employee is not as tough as you think. There are plenty of resources on the web, as well as at your nearest state and federal tax offices, where the staff will supply all the proper paperwork and manuals. They want to make sure you are completely compliant with all the taxes you’ll be responsible for.

You’ll need to obtain an Employer Identification Number, set up a payroll system, file withholding taxes, and report the new employee to the federal government. You’ll also need to register with your state employee office for their disability or worker’s compensation program, or obtain your own disability insurance.

But first, you need to get through the hiring process. Determine exactly what you need from your employee. Make a list of every single task you want the employee to perform. Write down all the things that are not being done well—or at all—because you cannot get to them. The list may be longer than any single employee could take on—but write them down anyway. You’re going to cut the list to a manageable number.

Write a quick job description, based on the list. Think of it as the goals you need help reaching and the tasks required to meet them. Keep the job description flexible enough to change it to fit your needs and the employee’s skills after he or she has been in place for a month or so.

Think about the education and skills needed to perform the job you’ve just described. Don’t forget physical requirements, like standing for several hours, reaching, bending, or lifting 25 pounds. These are all important aspects of your job listing.

Next, determine pay and benefits. Your local Economic Development Office and Small Business Administration are great places to research local pay rates. Or, check a site like, and you can find out what your job title average pay is, nationwide, or narrow your search by geographical location.

Now you’re ready to advertise. Most employers advertise online through local newspapers and or use large online job boards like and Yahoo, Facebook, and Twitter are also great ways to get the word out that you’re hiring. And don’t forget word of mouth—you’re more likely to find a great employee through someone you already know.

Once the resumes start coming in, weed out those that don’t meet your qualifications. Of the qualified applicants, some may no longer be interested (if they accepted another job, for example) and others may expect a higher wage than you can pay. How to find out? Conduct a telephone interview, and ask a few pointed questions about availability, ability to perform the job, and interest in the position at a certain wage range.

Call in the finalists for in-person interviews and have them fill out applications. You can find templates online or create your own. Be sure to have a separate permissions page for background screening and credit check. Pre-employment screening should be part of your new hire process. You don’t want to subject your business to an employee with an arrest record for embezzlement or who lies about her employment record.

The last step is to choose the best-fit employee, based on background screening results, your impressions, and qualifications. Personality has a lot to do with choosing the right employee, but don’t let emotions get in the way. Even if you really like a person, it doesn’t mean they’re the best employee for you!

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