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hiring

How to hire employees in 9 steps: Your guide to building a successful team

By Abigail Sims
Published on July 12, 2025

Key takeaways:

  • Learn the signs of burnout and overwork to determine when your team needs more hands on deck. 
  • Always clearly define roles before you begin seeking candidates.
  • Onboard new hires effectively for the best chances at successful long-term hires. 


You've built your business from the ground up, but one person can only scale so far. At some point, you'll need to hire employees to continue growing. If this describes you, you're in good company, as 44% of business owners plan to expand their teams in 2025, according to the QuickBooks Entrepreneurship in 2025 report.

But hiring involves more than just finding the right person. Our guide can help you determine how to hire employees and navigate the hiring process.

Jump to:

Step 1. Consider the legal requirements

When preparing to hire employees for your business, it can be easy to overlook essential steps because of local, state, and federal requirements. You'll need to consider certain numbers, documents, and provisions for a successful hiring.

Get an Employer Identification Number (EIN)

The IRS will need to issue you a unique Employer Identification Number (EIN) or Tax Identification Number (TIN). Employees will use your EIN when they need to file their income taxes. And you’ll need it to report and file payroll-related taxes. You can apply for an EIN online.

Register with your state revenue department

While sign-up processes and state tax ID numbers vary, many states use an Employer Account Number (EAN) for tax purposes. For specifics regarding your state, visit your state’s revenue or tax department, or consult a tax professional.

Register with your state labor department

To hire employees, you’ll need to register your business as an employer with your state labor department. The US Department of Labor (DOL) has published a guide to state labor departments. As you look into your state labor department, note state unemployment benefits and requirements for reporting new employees.

Calculate each employee’s withholding tax

To calculate withholding tax, employees need to fill out Form W-4. Calculating withholding tax rates for your employees is only one step. Withholding taxes and paying the appropriate tax bodies is a much bigger task. 

Keep in mind that automated payroll software, like QuickBooks, can help you simplify this process as you bring on employees.

Purchase workers’ compensation insurance

Workers’ compensation is a form of insurance that may help you compensate workers who sustain injuries while under your employment. Ultimately, your business’s requirements will depend on your state laws on workers’ compensation.

Issue Form I-9 to each new hire

Each employee must verify their eligibility on Form I-9. This form ensures that the employee is who they say they are and that they’re authorized to work in the US. You must submit an I-9 for every employee you hire, including US and non-US citizens.

Display workplace posters

Workplace posters are a federal requirement. The DOL produces updated workplace posters for labor laws, but you may subscribe to a workplace poster compliance service to ensure you get the right posters for your business.

An infographic of a hiring process checklist for businesses

Step 2. Define the roles and responsibilities for each job

With the legal boxes checked, it’s time to define job roles and responsibilities. When creating a role and drafting job descriptions, ask yourself: 

  • What problems am I trying to solve? 
  • What skills and activities will solve that problem?

Once you answer those questions, translate them into job descriptions. Avoid vague descriptions or roles that cover too much ground. Prioritize your pain points, and define roles that will attract candidates who can meet your business’s needs.

At this stage, you might also conduct market and salary research for your jobs to determine employee compensation. If you pay too little for a complex job, you may not attract the right candidates. It will be important to set realistic expectations around what you can pay for the new role.

Step 3. Find your ideal candidates

Your future employees are everywhere: on social media, at trade shows, on career sites. You must find them where they are and entice them to join your business. That means you need to post your jobs where your ideal candidates will find them.

Here are 3 places to find job candidates:

Key takeaway: While posting to online job boards can help recruit many applicants, leverage your network through platforms like LinkedIn to connect with a wider applicant pool.

Once you’ve found the right candidates for the position, the interview and job offer process begins. Distinguishing the best candidates from the applicant group can be a difficult ordeal, but we’ve outlined steps to simplify the process.

Step 4. Conduct interviews with qualified candidates

Don’t walk into an interview without a plan. You need to be as strategic with your interviews as you were with defining your jobs and finding candidates. Keep up that problem-solving mindset and create a list of questions that you can pose to all candidates.

There’s no perfect set of interview questions, but the following can keep you on track when assessing how each candidate can meet your business’s needs.

  • What are your top 3 skills that qualify you for this position?
  • What’s the first project or challenge you’d want to tackle?
  • How can you help grow the business?
  • What’s one thing you would do to improve or change the business?

These questions can help you gauge whether the candidate understands your business and how they can impact the business. Now is also the time to discuss each candidate’s pay expectations based on their experience, education, and skill set.

Compare the figures your candidates present with what you found in your market and salary research. And remember not to dismiss a candidate out of hand if their salary expectations are higher than you anticipate. A higher number may mean you need to adjust the job responsibilities or incentivize your ideal candidate with more benefits and perks.

Step 5. Select your candidate

There’s no formula for choosing the best candidate. Qualifications and education are important, but so is the candidate’s character and core values. Sometimes skills and experience alone won’t cut it. 

The right candidate will bring the right qualifications and values to the business. And they’ll bring a level of intelligence and creativity that you haven’t imagined yet.

Before you notify the candidate of the job offer, be sure to let them know you will be conducting a background check. Background checks allow you to see the employee’s criminal and driving records, which could potentially affect your business. This is often done through a background check service to make sure all the information you’ve been provided is correct.

Step 6. Notify the candidate of their job offer and compensation

When you’re ready to extend a job offer, stay positive and congratulatory in your communications, but make sure you don’t give the candidate an open-ended time frame to accept the offer. 

You may make your offer contingent on an answer by a specific date, and propose or ask for their preferred start date. When you extend a job offer, be positive, but know that it’s OK to put your business needs first.

With your job offer letter, you’ll want to include information about the candidate’s compensation package. If your compensation is lower than what the candidate expressed in their interview, communicate your company’s perks and benefits. 

You might also include a progression path so that the candidate can assess your expectations for improvement and higher compensation.

​

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Key takeaway: Provide new hire candidates with a concrete job offer letter that outlines the compensation package and benefits of joining your organization.

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Hiring your first employees is a landmark achievement, but the work doesn’t stop there. Make sure you take the necessary steps to fully onboard your new hires successfully, a couple of which we’ve covered below.

Step 7. Report hires to your state's employment agency

Now that you’ve hired the best candidates, you’ll need to report them to your state’s labor agency. Depending on what state your business operates in, the process may differ, so be sure to search your state’s hiring requirements.

Reporting new hires to the state is required for payroll tax purposes, and you will need to provide information like your employer payroll tax account number, branch code, your EIN, business name, and address, as well as your contact information. 

You will also need to obtain your employee’s full name, SSN, home address, and start date to send to your state’s employment agency.

Step 8: Establish a payroll system

Companies need a payroll system to ensure employees receive compensation for their work and pay the appropriate taxes. Although payroll can be conducted independently, you can also hire an accountant or use a payroll service. 

Many business owners opt for a payroll system since it allows them to combine this service with a human resources platform and handle the complicated tax process more efficiently. 

Step 9: Successful onboarding

A successful onboarding process isn't just about paperwork. By the end, new hires should be integrated into your team and set up for long-term success. Your goal should be to help new hires do their very best work from their first day at your company. 

Here's a step-by-step breakdown for successful onboarding:

If you set your new hires up for success from day one, they're more likely to stay with your company longer and provide value for years to come.

When should you hire new employees? Signs it's time

When your business grows and sales increase, you may be tempted to rest on your laurels. But when sales are going up, you need to think about how to support your team as they navigate handling all that new business. 

Failing to hire during periods of growth can lead to missed opportunities and a decline in service quality, ultimately hindering your long-term potential. 

If you see any of the following warning signs, consider expanding your team. 

An infographic for businesses explaining when it's time to hire a new employee

Increased workload and overtime

If your employees regularly work long hours or accumulate significant overtime, it's a red flag. This isn't just about the increased operational cost of all those extra hours; it points to a greater problem: you need more people to accomplish the work at hand. 

To recognize this problem, look for:

  • Consistent overtime: Do employees log more than 40 hours weekly in your time-tracking solution?
  • Declining output: Is the quality or quantity of work decreasing despite long hours?
  • Missed opportunities: Are you turning down new projects or clients because your current team is at capacity?
  • Employee exhaustion: Are team members frequently expressing that they feel overwhelmed or burnt out?

Customer complaints on the rise

Your customers are often the first to notice when your employees wear too many hats. A surge in customer service complaints about quality or response times can indicate an overburdened team, which can directly impact your reputation—and future business.

For example, if you start to see a decline in repeat orders or an increase in chargebacks, that's a red flag indicating that customers aren't getting the service they expect. 

Missed deadlines and goals

If your business consistently falls behind on objectives or fails to meet project deadlines, it's a clear sign of a capacity issue. This means you're not just treading water but actively losing ground on your growth trajectory.

A marketing agency, for instance, might start missing campaign launch dates or failing to hit client KPIs. 

Keep an eye out for these signs to stay ahead of this: 

  • Project delays: Are deadlines for key projects frequently pushed back?
  • Unachieved targets: Are you consistently missing sales goals, production quotas, or other business objectives?
  • Stalled initiatives: Are new product launches or strategic initiatives constantly on hold?
  • Lost opportunities: Are you unable to pursue new business ventures due to current resource limitations?

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Before committing to a new hire, consider whether the workload is temporary or a consistent trend. Seasonal peaks might be better managed by hiring seasonal employees, but a year-round issue indicates the need for a permanent role.


Lack of specialized skills

Sometimes, it's not about having more people on your team, but having the right people. If your team lacks expertise in a particular field, like a complex programming language or a new social media channel, it can hinder your business's progress and ability to innovate. 

Consider a tech startup that needs to develop a new mobile app but lacks an in-house app developer. The founder might spend countless hours trying to learn the skill themselves or outsource to a consultant or freelancer at a high cost.

To recognize this issue, ask the following questions: 

  • Are you paying external resources for specialized work that could be done in-house?
  • As the owner, are you consistently performing tasks outside your skill set that distract you from strategic planning?
  • Are new product or service ideas stalled because you lack the technical or creative skills on your team?

If you answered yes to any of these questions, it may be time to hire specific talent. 

Owner burnout

As a business owner, you're likely used to wearing many hats. However, if you find yourself constantly working excessive hours, struggling to take any time off, or feeling overwhelmed by daily operations, it's a strong indicator of burnout. This impacts your well-being and limits your ability to lead.

If you find yourself answering customer service calls at 10 p.m. and handling all the bookkeeping personally, it's definitely time to hire. 

High employee turnover

High employee turnover is another serious issue within your workplace. Churn of this nature can severely impact team morale, leaving remaining employees feeling overworked, undervalued, and more likely to leave themselves. It's a cycle of negativity that can really hurt your business's vibe. 

Beyond the hit to morale, frequent departures also come with a hefty price tag. With each exit, you lose valuable knowledge and face significant costs in recruiting, hiring, and training new team members.

If you're seeing a high turnover rate, quickly address the root cause to increase employee retention. This doesn't have to be a complex process, either. Sometimes, adding another team member to distribute the workload more effectively can solve the problem.


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Conduct exit interviews to understand why employees are leaving. This feedback can provide valuable insights into workload, tools, or management issues.


The benefits of expanding your workforce

While the cost of adding new employees can be intimidating, the benefits far outweigh the drawbacks. From increased profit margins to a more positive work environment, you'll wonder how you got along without them. 

Here are just a few of the benefits you can expect when you expand your team: 

Increased capacity and revenue potential

Bringing on new team members directly increases your business's ability to handle more. This means you can say "yes" to more opportunities, which translates directly into more money for your business.

When you expand your workforce, you can:

  • Take on more clients and projects
  • Expand into new markets
  • Offer new services that were previously out of reach

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If you're having trouble justifying the hiring budget, analyze your current sales pipeline and project backlog to quantify the potential revenue you're losing due to limited capacity.


Improved efficiency and productivity

A larger team distributes tasks more effectively, leading to smoother business processes and increased output. When everyone has a manageable workload, they perform at their best.

With new hires, you can:

  • Delegate tasks, allowing existing team members to focus on core competencies.
  • Reduce bottlenecks that were slowing down your processes and deliver projects more quickly.
  • Increase project quality, as team members have more time to devote to each project. 

Access to new skills and perspectives

New employees bring fresh eyes, diverse experiences, and new skillsets to your business. This will help your business evolve and stay competitive, even as markets change and demand fluctuates. 

Expanding your team allows you to:

  • Bring in specialized talent to fill skill gaps that currently limit your capabilities.
  • Inject fresh ideas and innovation into your business strategy.
  • Seek out new opportunities that you might not have been competitive for previously. 

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During the hiring process, look for individuals who will truly bring new perspectives and skillsets to your team. 


Enhanced employee morale and retention

An overburdened team often leads to burnout and high turnover. Hiring additional staff alleviates stress on your current employees, creating a more sustainable work environment. 

According to the QuickBooks Small Business Index Annual Report, this is especially true. 2025 saw the most significant year-over-year decline in employment since 2015. 

This underscores the critical need for small businesses to prioritize the well-being of their existing team to avoid further attrition, especially as larger companies compete for your talent. There's no better way to increase employee retention than by sharing the load. 

By expanding your workforce, you:

  • Boost overall team satisfaction by reducing individual workloads.
  • Cultivate a healthier work-life balance for your existing staff.
  • Reduce the likelihood of employees seeking opportunities elsewhere.

Free up time for strategic growth

As a business owner, your time is your most valuable asset. Focusing on the big picture becomes difficult when daily operational tasks bog you down. New hires take on these tasks—when you delegate—freeing you to lead.

This newfound time allows you to:

  • Devote more energy to long-term vision and market analysis.
  • Pursue new partnerships and expansion opportunities.
  • Develop new products or services.

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How to hire good employees: 5 best practices from companies large and small

There’s no shortage of hiring best practices to find across the web. But which best practices are worth their salt? You may consider looking at some top companies and taking inspiration from what they’re doing.

1. Netflix: Create a culture deck for job candidates

Netflix believes that its success depends on its culture. From its early days, Netflix has published a culture deck that outlines what it expects from employees. This deck helps candidates and employees understand expectations and what it takes to succeed at the company.


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Key takeaway: Having a visual representation of what it’s like to work at your company may encourage candidates to apply, as they will have a better idea of your business vision and mission.


2. Your neighborhood coffee shop: Hire your best customers

Many successful small coffee shops leverage their existing customer base to find new hires. They understand that regulars already love the atmosphere and product, and often have a strong connection to the community the shop serves. The customers are "interviewing" just by attending the shop regularly. 

When a position opens up, it's simple for the manager to approach their favorite customers directly. This informal but highly targeted approach often leads to a strong cultural fit and employees who are already invested in the shop's success.


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Key takeaway: Highly targeted or informal recruiting processes can sometimes lead to better results than casting a wide net. 


3. Chipotle & McDonald's: Launch a recruitment campaign

Chipotle and McDonald’s are two examples of companies that have successfully executed massive recruitment campaigns. You might not be ready to hire thousands of workers at once, but the concept allows you to promote your business to a broader audience. If you have several positions to fill, a recruitment campaign may help you bring in more candidates.


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Key takeaway: Investing in a recruitment campaign can expand your reach to more candidates than you otherwise would have.


4. Slack: Prioritize diversity and inclusion

Be sure to consider how you are appealing to candidates from various backgrounds during the hiring process. Messaging platform Slack publicly shared its employee demographics, including gender identity, ethnic backgrounds, and other minority identities. 

To better its efforts at representation and inclusion at the company, Slack also partnered with a coding nonprofit called Code2040 in order to help Black and Latinx computer science students excel in their careers.


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Key takeaway: Showing candidates that their representation and inclusion are important to your company will ensure they see your organization as somewhere where their voice is heard and valued.


5. DocuSign: Collect candidate feedback

Candidates who apply to DocuSign receive a candidate experience survey regardless of whether or not they received an offer to provide feedback on their experience with their recruiter. 

The survey asked candidates if their recruiter gave them a satisfactory overview of the company, their value proposition, how they were treated, and if they received timely updates on their application status. Showing candidates that their experience matters can encourage them to apply for positions in the long run.


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Key takeaway: Making your candidates feel heard during the hiring process allows for a positive relationship with the company for future communication.


Tips for hiring a remote employee

An infographic listing steps to hire remote employees for businesses

Now that we’ve covered best practices during the hiring process, we’ll cover some best practices that apply specifically to hiring remote employees.

  • Utilize video conferencing. Platforms like Zoom, Google Meet, and Microsoft Teams are excellent video conferencing software for conducting video interviews. This helps supplement the face-to-face communication lost to the virtual hiring process and gives you a better idea of who the candidate is.
  • Focus on what makes a good remote worker. Remote work requires employees to be self-directed, organized, and have good digital communication skills. Make sure your hiring criteria includes skills specific to remote work so that candidates have an accurate understanding of what is expected of them.
  • Try using skill assessments. Online job boards like LinkedIn often accompany certain job applications with skill assessments. These can help determine if the candidate has the skills you need before onboarding, so that they meet the expectations for the role. Skill assessments can cover anything from software like Microsoft Word to technical skills like coding.

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Key takeaway: Remote hiring may be more challenging than in-person hiring, but hiring managers can still better understand candidate skills through video conferencing and skill assessments.


Make the best hiring decisions for your business

Whether you’re hiring your first employee or improving how you’ll hire your next one, take your time. You shouldn’t rush yourself to hire just anyone—you’re hiring a team member, someone who shares a lot of the passion you have for nurturing your business. 

Your hiring decisions, like which hiring management tools you'll use, are among the most critical for your business. 




QuickBooks Online Payroll & Contractor Payments: Money movement services are provided by Intuit Payments Inc., licensed as a Money Transmitter by the New York State Department of Financial Services, subject to eligibility criteria, credit and application approval. For more information about Intuit Payments Inc.’s money transmission licenses, please visit https://www.intuit.com/legal/licenses/payment-licenses/ 


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