Important things to consider when Hiring Your Start-up’s First Employee

Typically, the first few people who join your start-up company will end up being partners or something very close to them. It takes a while before you get to the stage where you’re hiring rank and file employees. Of course, in the interim, you might be more likely to hire an independent contractor or freelancer for non-executive labor. One in ten workers in the US is an independent contractor now, according to the US labor department.


Getting ready to add to your staff

As a small business, you can’t afford to make many mistakes at this juncture. Here’s a quick checklist of things to take into consideration:

  • How much can you spend on compensation, and is it a competitive wage?
  • How do you propose to train them so they enter their productive phase as soon as possible?
  • Do you have measures in place for assessing qualifications, such as running a background check?
  • What perks or packages can you also offer?
  • Are you prepared to take on all the legal obligations of becoming an employer?

Compensation is a tricky number to arrive at. Today’s job market is highly competitive, with unemployment holding at 3.5%. It’s the worker’s call since most qualified candidates have multiple employers to choose from. On top of that, it takes a special person to look at your garage-sized company and decide to hitch their future to your business. You should try to impart your business vision and why you’re destined for success.

The low unemployment factor means that you also have to think beyond a mere paycheck for compensation. For permanent, full-time employment, you’ll have to think about health care, 401K, family leave, and much more. This list offers some ideas to make your company more attractive to job-seekers.

Testing yourself out like a boss

When you start a business, you’re an entrepreneur. When you work with several others together, you’re all partners launching a firm. When you hire your first employee, that is the day that you cross the threshold and become a “boss.” So what kind of boss are you?

Chances are you will want to look to your candidates for potential, and not just their past experience. Perhaps in your interview, you can have them demonstrate their skill and capabilities since you can afford to be a bit less formal. If you work with partners, have everyone on the team take a joint interview with the candidate.

Once you have a candidate picked out, you will have your first experience onboarding a new employee.  You will want to at least consult with a legal professional about labor laws in your area, and drawing up an employment contract or other relevant paperwork. Don’t forget taxes, you will need to start tracking those.

As a small company, your best bet is to delegate to your new hire, rather than micromanage. One of the reasons people join start-ups, after all, is because they like being part of a select, forged team where they are entitled to a little empowerment and even a tier of the decision-making process once in a while. They don’t want to be a part of a bigger company where they’re just a name plaque on a cubicle. You can help that spirit along by encouraging your new staff member to take a more executive-like role in the way your company runs.

Growing your company

The first few positions you fill might be general management or experts in your company niche. But after your business stretches out of the “start-up” leagues, you’ll need to fill mundane positions like a marketer, IT technician, or purchaser. By the time you’re down to subcontracting for maintenance and on-site security, congratulate yourself: You are no longer a “small” business!

About Mohit Tater

Mohit is the co-founder and editor of Entrepreneurship Life, a place where entrepreneurs, start-ups, and business owners can find wide ranging information, advice, resources, and tools for starting, running, and growing their businesses.

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