Starting A Small Business – Hiring Your First Employees

Welcome to our series on starting your small business.

In the past weeks, we have looked at getting clear why you are starting your business, what you need to think about before you start, how you actually start a small business, preparing a feasibility check on your idea, and starting with a written business plan.

This week, we are going to look at hiring your first employees.

It doesn’t matter how big or small your small business is, at some point, probably sooner than you think, you will need to hire employees. They may be full time, part-time or even casual staff, but at some time in the early days of the business, you will realise the need to leverage your time to grow the business. There may be some skills that you do not have or simply more hands that you need.

In this article, we are going to look at some regulatory preparation, how to prepare your business for employees, how to interview them, and how to onboard them into the business.

Depending on where you are, there will be certain regulatory and legislative rules about employing people.

You need to find out what these rules are, and the best person to ask is going to be your accountant. You should also be able to get information from the government (Department of Trade and Labour, the Tax Office, and so on).

Generally speaking, these rules are likely to be about:-

• Your own rights and responsibilities as an employer
• Any minimum terms and conditions as regulated by legislation, unions or national awards
• Any different conditions for full time, part-time or casual positions
• Setting up taxes
• Agreements and contracts

Preparing the business

The first thing to do is to get to know the law and make sure that you comply with it.

Internally, you may have identified a position, or positions, for which you need to hire people, but I would suggest that you go a bit further and draw up a basic “Organisation Chart” which shows how the people in the business are structured.

You may wish to draw an Organisation Chart “of the future”, that is, if you already have an idea of how you are going to expand, you can draw an Organisation Chart when you have employed everyone you need, even if that is not the case now. So, in this Organisation Chart of the future, you would obviously start with you at the top, and then decide who would report to you as Managers, then who would report to those Managers. Each section of the Chart should logically represent a different department or team such as the Sales Team or the Accounting Department.

The reason you do this, even if you are not going to hire everyone, is to be clear about who you would hire “when the time is right.” At the moment, you, or someone else, may wear a dozen hats while the business is small. Those hats should be represented in the Organisation Chart of the future, and when the time is right to hire that position, all you have to do is to pass on that particular hat to the new person.

In this way, you have organised the growth of your business stage by stage. You would also have identified who’s responsibilities you would be passing on at each stage, and that person can therefore prepare notes about how to do that task as it is passed on because they have been doing it for a while. This helps in continuity.

An Organisation Chart also helps people new to the business, because they can see who they report to and who they are responsible for, and, what their opportunities for promotion are over the years. This gives them a sense of belonging, direction, and motivation.

Once you have a complete Organisation Chart, you should write Position Descriptions for each position in the Organisation Chart.

Position Descriptions are a description of what that position does, what their main objective in the business is, and what their main responsibilities are.

If you write this out at the start, you don’t have to reinvent the wheel every time you decide to hire someone – you already know how they fit in and what they do. So will they. It will take a lot less explanation as you onboard them if they didn’t have a Position Description in front of them telling them what their responsibilities are.

In the beginning, you may actually hold all of those Position Descriptions, but as you hire staff to fill a particular position, you can then hand over the Position Description and introduce them to a job that actually already exists.

The Interview Process

Having Position Descriptions also help you in getting people into the interview process.

When you advertise, you don’t have to make up a set of responsibilities on the spot – using the pre-written Position Description, you can be assured that you are not missing anything out in the advertisement and that you are describing a position that already “fits” into the Big Picture.

To get to the interview process, you need to:

1. Decide on the need to fill a position and identified the position from the Organisation Chart as well as what that position will do from the Position Description.
2. Decide on the level of remuneration and terms and conditions of employment (not forgetting that some of this may be regulated by legislation).
3. Decide on the characteristics of the person who would fit that Position Description (qualifications, experience, attributes and so on)
4. Decide on the best place to advertise (online, in trade journals, local newspapers, national newspapers, employment registries or recruiters).
5. Write a suitable advertisement describing the title and responsibilities of the job and the characteristics you are looking for. If it is a senior position you may also want to describe any potential career paths. You may want to describe a salary range or leave it until the interview.
6. Allocate an email address or physical address to which they should respond and take steps to receive, organise and read the applications.

You should then shortlist all the applications.

Some can probably be immediately eliminated. For every job advertisement, there will be a percentage of applicants who are obviously not suited and may not even have any of the compulsory characteristics that you advertised.

For the rest, you will need to decide on a scoring system, allowing you to reduce the number to a manageable number that can be invited to interview.

Once you have a shortlist, you can contact them and organise dates for the interview.

Before the interviews start, you should write a list of broad questions you will ask all of them at their interview. All the candidates should be asked the same questions, and then, as they answer, you may want to explore their answers with backup questions that will occur to you then and there.

I recommend that you organise your questions into three categories:

1. Those that elicit if they can do the job,
2. Those that elicit if they will do the job, and
3. Those that reveal if they will do the job with you.

The first category of questions is designed to see if they can actually do the job. So these will include questions like “What qualifications do you have? How long have you held that position? Who supervised you?” and so on. You can also ask “what happens if” type questions to test the truth of what they know. For example:

• “What was the hardest thing about (doing the task you want them to do)?”
• “If you had to (do the task you want them to do) how would you go about it?”
• “Can you tell me about a situation when you (were doing the task you want them to do) and you met a problem – what did you do?”

If any of these questions – or follow up questions – reveal that they don’t have the experience or skill to do the job, then don’t waste any further time.

The second category of questions is to reveal if they are motivated to do the job, are they self-starters or will you have to be constantly at their backs?

These are questions like:

• “Tell me what gets you up in the morning?”
• “If you had a choice of (doing something you don’t really want them to do) or (doing something you want them to do) which would you choose and why?”
• “Tell me what you see yourself doing in (2, 3, 10) years’ time?”

Again, if you feel that their answers to these questions show that they are not motivated as you would like, that perhaps they are looking for an easy job and not a career, again, don’t waste any more time.

Finally, the third category of questions is to test if they will be motivated in their role in your business – and if you think they will fit into your vision and get on with you. These will involve questions like:

• “What made you apply for this job?”
• “What are your personal values and why?”
• “What do you look for in an employer?”

Hopefully, some of the applicants would have made it this far, and a few would feel to you that they can fill the role.

Finish your interviews with a date when you will contact them, allowing you to think over the results.

At the end of the process, do not neglect to contact every one of them, even the unsuccessful ones, to tell them of the result. You want to be a creditable employer, and the courtesy of telling candidates of the result is important in how you conduct yourself and make your business reputable.

If you are in the lucky position of having to choose between a few candidates, and having quantitatively proven that they can do the job, they will do the job and that they will do the job here, your decision may end up being qualitative and subjective. Nothing wrong with that. Don’t forget to ask that “vision” question: “Who amongst this group do I feel will understand where I want to take the business to, and will help me get there?” to help you make that subjective decision.

Onboarding

Having made your decision and informed them, and negotiated a start date, don’t forget to complete an employment agreement before they start.

I am not a lawyer, but you can get an appropriate employment agreement that meets all the legislation as well as your terms and conditions by getting a lawyer to prepare a template for you to use on this occasion, as well as to “fill in the blanks” for future employees. You may also be able to obtain online templates, but just be sure that they meet the requirements of your jurisdiction or country.

You now need to prepare the business for their arrival. There is nothing worse than on their first morning, you are wasting time wondering where they will sit, not having enough time to settle them and explain the Position Description or take them through their tasks. Not being ready creates a bad impression at the start, and is neither efficient nor cost-effective.

So, spend some time before they get there:-

• Decide on where they will be located and prepare that place
• Decide who will introduce them to others in the business, and make sure they have booked time to do so
• Decide on who will show them the basic facilities – bathrooms, photocopiers, printers, and so on
• Decide on who will explain their Position Description to them and make sure they have booked the time
• Decide on who will introduce them to the work process – and yes, make sure they have booked the time.

And when they arrive, swing into action like a well-prepared machine!

Conclusion

I hope that your startup becomes successful and grows accordingly.

It is almost certain that as your small business grows, you will be hiring employees. Perhaps you’ll start small with one employee, or even starting with a pair of hands on a casual or part-time basis, and hire more staff as you grow.

The important thing is to realise this and be prepared for that day. Don’t stumble into employing workers and then finding that you’ve broken a law, or be taken to Court for unfair treatment of an employee. Be prepared so that you make each hire an effective and efficient member of your growing team.

Remember to know the law, and get to understand your rights and responsibilities.

Prepare the administration and structure of the business ready to hire employees, and carry out the interview and selection process efficiently and effectively so that you choose the right person every time.

When they turn up on that first day, be prepared and carry out the onboarding process so that they can be productive at once.

Take these simple steps, and you’ll be ready.

Next week, we’ll be looking at building your business by making the internal workflows automatic. Don’t miss it. We will look at how to prepare procedures so that every piece of work has a predictable outcome, and is consistent in quality and efficiency every time. Better yet, why not get the blog article delivered directly to your inbox by joining us here?

Look forward to seeing you next week!