Small businesses were responsible for 64 percent of the new jobs created in the US between 1993 and 2011, according to the Small Business Administration. Every business owner gets to a point where, in order to grow and remain competitive, he/she must bring in a helping hand. However, you need to be extremely cautious when hiring your first employee. A hiring mismatch can result in high employee turnover, absenteeism, inefficiency at the workplace, crime, among other things that might slow down your growth. As such, every small business owner needs to ensure that the hiring process is smooth, thorough, and geared towards finding the perfect match that will help take the business to the next level.
Do your due diligence
Regardless of the type of job you are hiring your first employee for, you need to find out as much as possible about any potential employee based on facts, not what they say or include on their resume. You can do background checks for criminal and incarceration records, driving records, credit history, and confirmation of prior employment claims. You may need to ask for an applicant’s consent when digging up certain personal records such as education or medical records. When doing your background checks, keep in mind that it’s unlawful to ask questions about an applicant’s age, marital status, sexual orientation, race, or religious affiliation.
Get the right insurance coverage
Whether you have one employee or a hundred, maintaining proper insurance not only benefits them but also protects your business as well. One type of insurance that employers are required to provide for their employees in most states is worker’s compensation insurance. This type of insurance covers the expenses that arise from a job-related illness or injury to your employee. It covers the cost of treatment and lost wages during the treatment period. Other types of insurance you can consider include disability insurance, health insurance, and life insurance. You can find out what type of insurance will work best for your business by going to a reliable insurance provider like Cerity.
Choose the employee’s classification and set a salary
Depending on your finances and hiring needs, you’ll need to determine the status of your new employee as either full time or part-time. This will affect things like the minimum wage, hours of work, and employee benefits. For tax reasons, you’ll need to categorize your new employee as a common-law employee, statutory employee, statutory non employee, or an independent contractor. Misclassification can lead to fines or even criminal charges. Fill out the corresponding tax documents required under state law and by the Internal Revenue Service, such as the W4 and W2 forms.
If you want your business to grow to the point where it’s no longer referred to as a small business anymore, you will need to hire an employee to help you with tasks that you are unable or too incompetent to handle. While taking on a new employee can be a complicated and costly process, the reward will be increased productivity and profit which makes it totally worth it.