September 10, 2018 Employee Management en_US Hiring your first employee is a big step to take as a business owner. How can you know it's the right time? How can you find the right person? Here's what to know to tackle the process with confidence. What you need to know about hiring your first employee
Employee Management

What you need to know about hiring your first employee

By QuickBooks September 10, 2018

This article was co-authored by Eric Carter and Kat Boogaard

Anxiety, skepticism, enthusiasm; there’s a mix of emotions when you’re thinking about hiring your first employee.

Will this person represent your business well? What will you have them work on? What if they destroy your reputation? What if you have a slow month—will you be able to pay them?

Making your first hire is an equally exciting and nerve-wracking time. Here’s what you need to know to determine whether you’re ready to hire and how to find an employee who fulfills your needs.

Questions to Ask Yourself Before Hiring Your First Employee

Figuring out whether or not now is the right time to hire your first employee can be tough, but these questions can give you clarity.

Do you know exactly what you’re hiring for?

While hiring means you’ll have some help, you shouldn’t just be hiring for that alone—you should be looking to fill specific skill gaps within your business.

“Many small businesses—startups in particular—deal with ‘the warm body syndrome.’ Instead of hiring people who fit and are qualified for certain positions, people are brought in simply because they’re convenient and cost-effective,” says business consultant, Anna Johansson, in an article for Inc.

New hires should be brought in to satisfy a specific need. Are there tasks you hate doing or struggle to accomplish?

Write those things down and look for common themes. Do you loathe posting on social media and writing your weekly newsletters? A marketing coordinator could help. Do you hate filing, paperwork, and responding to customer inquiries? Maybe you need an office assistant.

Once you’ve identified exactly what you need, translate those specific requirements into the job description. Vague descriptions frustrate applicants and make it that much more difficult to find qualified talent.

When writing the job description, you should outline:

  • Your business (a brief overview of what you do and who you serve)
  • Core responsibilities of the role
  • Specific requirements a candidate must meet to be considered
  • Qualifications that are preferred, but not required

Remember, the more detailed you can be, the better your chances of finding the best fit for your skill gap.

Are you prepared to delegate?

You’ve invested so much of yourself into your business, and that makes it challenging to relinquish some control and accept help.

Hiring an employee won’t serve you well if you aren’t ready to empower them and give that person some work. In fact, it will only cause you even more stress.

“Unfortunately, many business owners become control freaks,” says Colleen DeBaise, The Wall Street Journal’s former small business editor, in a WSJ article, “When the business finally grows enough to hire staff, these control-freak business owners aren’t willing to let workers do their jobs.”

Making your first hire can be difficult logistically, but there are some mental and emotional aspects to it as well.

Consider whether or not you’re ready to delegate work you’ve been doing yourself and trust that an employee will handle it effectively—even if they approach it differently than you would.

Will hiring someone lead to positive growth for your business?

Adding an employee requires significant expense, so it’s important to consider the cost benefit. How will this hire lead to more revenue?

Sometimes that connection is obvious. Hiring a new salesperson will lead to more sales and, as a result, increased income for your business.

However, there are more subtle ways that a hire can lead to increased revenue. For example, could hire a customer support specialist to improve the relationship with your existing customers and reduce your churn rate?

Time is another factor. Are sales prospecting and other business development opportunities constantly pushed to the back burner in order to deal with the daily tasks? Hiring could alleviate some minutiae so you can channel more energy into growing your business.

Is an employee your best choice?

Could a freelancer meet your needs without needing to pay benefits? Independent contractors are a popular choice among small business owners for that reason. The help you hire, whether an employee or independent contractor, will determine how you run payroll.

Perhaps there’s a third-party service (like an agency) that you could outsource your work to. Or, maybe you’d rather search for a co-founder who works for equity or ownership in your business, as opposed to a salary or hourly rate.

The important thing to note is that there are other options beyond hiring a traditional part-time or full-time employee. Do some research into what alternatives are out there before deciding which route is best for you.

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Can you afford to hire an employee?

You’ll need to cover the employee’s hourly rate or salary, payroll taxes, eventual raises and bonuses, and—in some cases—benefits.

While you aren’t required to provide health benefits if you have fewer than 50 full-time employees, offering benefits is an effective way to keep employees engaged and satisfied.

According to Aflac’s 2017 Small Business Happiness Report, 72% of small business employees say that improvements in their benefits offerings would make them happier.

Figuring out this expense can be challenging. This employee cost calculator can help you determine your total cost so that you can decide whether or not your current finances will support a hire.

Questions to Ask Yourself When Interviewing Your First Candidates

If you answered “yes” to the above questions you’re ready to find qualified candidates for your open job.

When interviewing applicants, ask yourself the following five questions about each of them to figure out who’s the best fit for your business.

Does the candidate solve your biggest problem?

When Facebook Vice President of People, Lori Goler, was trying to land a job at Facebook, she skipped pleasantries and got straight to the point:

“Sheryl [Sandberg], what is your biggest problem and can I help solve it?”

Goler empathized this with Sandberg by showing a desire to take ownership in finding a solution to Facebook’s struggle.

Keep Goler’s question in mind when making your first hire. The five questions presented in the first section of this article identify your biggest problem. Next, you need to find the candidate that can solve it.

Ask each candidate the following questions to see if he or she solves your problem:

  • What are your top three skills that qualify you for this position?
  • What’s the first project or challenge you would tackle if hired?
  • How will you help grow my business?
  • What makes you a better fit for this role than other candidates?
  • What’s one thing you would improve or change about my business?
  • What are your salary requirements?

Keep this list of questions handy when interviewing your first candidates to ensure you address your most pressing challenges.

Does the candidate contribute to the culture you want to foster?

You don’t have a company culture at the time of your first hire. You are the company. But, you likely have an idea of what you would want your company culture to look like.

You can try to facilitate company culture through policies, handbooks, office layout, fringe benefits or any number of mechanisms designed to create a particular company culture.

In reality, your employees will drive your company culture, so you need to hire employees that embody the culture you’re aiming to create. That starts with your first hire.

As you scale, you will have less capacity to personally interview each candidate. Accordingly, each employee you hire needs to have a firm understanding and ownership of your company values.

Reid Hoffman, Co-founder of LinkedIn, understands that once your culture takes on a certain direction, it’s difficult to change course.

Hoffman states, “you must define your culture before you scale. And you have to think deeply about what cultural attributes you want to preserve at scale.”

At LinkedIn, the founders were so concerned about ensuring a specific culture that they personally interviewed the first 500 LinkedIn employees. This seems extreme and is likely impossible for many businesses. However, Hoffman and his co-founders found it essential to the long-term success of the company.

Does the candidate’s personality and skill set complement yours?

Company culture is important. But, hiring a cultural fit does not mean hiring someone just like you-you aren’t trying to build a completely homogeneous team.

In a Harvard Business Review article, Hire People Who Disagree with You, John Baldoni argues that managers should hire employees that offer contrasting skill sets, opinions, and personalities.

Baldoni writes, “Having a strong oppositional voice is the mark of good leadership. Rather than a sign of weakness, it demonstrates the force of character and the ability to think and act strategically. More importantly, oppositional views can clarify the leader’s own thinking, sometimes changing his mind, other times sharpening a course of action.”

Unless you are intentional about hiring employees that compliment you through contrast, you are prone to hire someone similar to yourself.

In a Kellogg School of Management study, professor Lauren Rivera found that managers are likely to hire candidates that share common preferences, experiences, demographics and social circles.

Rivera further discovered that commonality often takes precedence over skills and job requirements.

When hiring your first employee, look for candidates who strengthen your company through diversity. Actively combat the temptation to hire someone similar to yourself.

Would you want to work for the candidate?

Facebook founder and CEO Mark Zuckerberg has a golden rule of hiring:

“I will only hire someone to work directly for me if I would work for that person.”

Zuckerberg’s rule is keenly appropriate for your first hire. After your first hire, it’s just the two of you.

The two of you get must get along. You must delegate to each other and own your mistakes. You need to provide constructive feedback while preserving your relationship.

Above all, you must trust and respect each other.

If you can find a candidate that you would work for, you ensure two things:

  1. You respect the person
  2. You believe the candidate is a quality candidate that can accomplish the job

Your first employee is a major step toward the future of your company. Zuckerberg’s rule will help ensure you are making a sound decision.

Is the candidate a future star for your company?

Hire to meet your current needs, but keep an eye bent toward the future. You want your first hire to be a key player in your longer-term strategy.

How can you tell whether a qualified candidate is interested in joining you for the long haul or will move on in six months?

An employee’s long-term interest in your company often has more to do with you than the employee’s personal goals. Your behavior will incentivize employees to buy into your vision, or push them to pursue other opportunities.

Returning to Hoffman’s focus on building culture, he states: “[T]ruly strong company cultures emerge only when every employee feels they personally own the culture.”

Empowering employees to own and build your company culture starts with the interview. Offer candidates the opportunity to shape and grow the business.

No single recipe exists to instill employee ownership. To get your creative juices flowing, consider some employee-focused elements of Netflix’s Culture Deck:

  • Our goal is to inspire people more than manage them.
  • We trust our teams to do what they think is best for Netflix—giving them lots of freedom, power, and information in support of their decisions
  • We believe people thrive on being trusted, on freedom, and on being able to make a difference
  • We keep only our highly effective people
  • Our model works best for people who highly value consistent excellence in their colleagues

Netflix ensures that every candidate sees the Culture Deck before showing up at an interview. Each Netflix candidate understands what the company stands for and how he or she can help build Netflix’s future.

Unlike most aspects of finding the ideal first hire, finding a long-term superstar starts with your own values and practices. As the old adage goes, “People don’t leave companies, they leave managers.” When hiring your first candidate, be a manager that people don’t want to leave.

Moving Forward With Your First Hire

Making your first hire will inspire some doubts, but remember that it’s a positive sign—your business is growing.

Use this as your guide to confirm that now’s the time to hire and that you’ve found the right person, and the hiring process will be much more straightforward. You’ve got this.

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