In today’s article, you will learn all about hiring employees for small businesses. This article covers everything from building great job descriptions to finding qualified candidates.
We divided it into five clear steps (with one bonus).
By the end of this post, you will be conducting a terrific hiring process that will take your small business to a new level. But first, let’s get the most important out of the way.
Part zero: The “hot dog cart” paradox
Maybe hiring employees is just what you need, or maybe it is something to do further down the line. But before we dive into the practical ‘how-tos’ of the hiring journey for small business owners, we need to take a more qualitative moment and assess motivations.
A perfect way to approach this topic is to think of the “hot dog cart” paradox, brilliantly depicted in Paul Jarvis’ book, Company of One. ( https://www.amazon.com/Company-One-Staying-Small-Business/dp/1328972356 )
In this book, Jarvis tells the tale of a hot dog cart owner in NYC. The owner was in charge of buying supplies, paying bills, serving customers, and ultimately making hot dogs (sounds familiar?) And, boy, did his clients love his hot dogs – it was the talk of the block.
The cart owner decided to hire employees to help him manage his small business. Jarvis proceeds to explain two ways in which this story could unfold.
The first is massive success and growth, with the hot dog cart expanding into a successful franchise with multiple carts across the city.
The second line depicts how the business owner regrets having promoted himself from a happy hot dog maker to a not so thrilled business CEO.
Each small business has its particularities, and each individual is an individual. But this is an analogy worth spending some quality time with.
In other words: this article will help you figure out how to hire an employee, but whether you want to grow and form a new team, that is entirely up to you.
Part 1: Discover if you need to hire employees immediately (or justify a new hire).
Now that this is out of the way, the first step in hiring employees for your small business should be understanding if there is a need for one. We could also call this section “justification for a new hire,” as this is our aim.
List your tasks
We will start by listing your tasks. We are assuming that at this point, you are either working by yourself, with a business partner, or with one or just a few employees.
Write down all of the tasks you (and your team or partner, if that is the case) are responsible for, from taking out the trash to coming up with new marketing strategies. If you are working with other people, list who is doing what.
To organize it even further, you place these tasks under two columns: essential and non-essential tasks, the first being everything that makes your business alive, and the latter what you could, in theory, do without. Listing them in essential and non-essential will help you have more clarity if you are overburdened or simply need more organization.
Create your current and ideal job description.
In this section, we are going to shoot you three critical questions.
Your combined tasks should give you an idea of your current job responsibilities. In other words, what would your job description look like if you were to hire a new employee to perform the same tasks you are working on right now?
This exercise helps you – or your hiring manager – to create what your job description would look like in an ideal world. Another way of looking at this would be assessing the “essential” tasks you listed above. How would you write your ideal job description with more essential and strategic tasks if you were only to do the essential work?
Once you’ve narrowed down your tasks and can take up more strategic work, it is time to combine all that was left out. Are those tasks enough to justify a new hire for your small business?
Take some time to answer them all. Even if you find that there is enough workload for hiring employees – especially after this last one – we have a couple of things to clarify before moving on.
To boost efficiency or hire employees.
Some tasks you left out of your “ideal job role” might be things that require a new employee to perform. Providing services to clients, selling more products and other core aspects of your business can be performed by a qualified candidate.
Others, on the other hand, can be taken care of just by boosting your efficiency. Here is one example:
Service-based small businesses, like beauty salons, barbershops, and massage therapy salons, run on appointments. Many such small businesses have a vast amount of admin work related to appointment management. Picking up phone calls, sending reminders, changing shifts, and more.
All this work can boost efficiency by adopting an online booking system, such as Appointible.
It’s important to determine if the tasks you wish to delegate to your new employee can be managed with such software or need hands-on work from your new hire.
To outsource your work or do it internally
Some roles, such as accounting, marketing, and legal, can be outsourced to a specialized company. Additionally, it is important to determine if your small business has enough workload for such tasks. Outsourcing can be a great way to strike a balance between efficiency and cost reduction.
To hire part-time or full-time employees
If having someone out of your business just won’t work for the job role you need, you can still consider if your new hire can manage the workload by working part-time.
Finally, if you decide to move with hiring a full-time employee, you are ready to start your hiring process journey.
Part 2: Creating a great job posting
In this segment, we will look at the importance of creating an enticing job description, listing benefits, and finding the best places to post a job opening.
Create a clear job description and job title
The first step to creating a successful job posting is to write an attractive job description. This document should include a brief overview of the role and its primary responsibilities, qualifications for the position, salary range, and benefits offered.
Start with writing the responsibilities. What are the primary objectives for the role? What will you ask the employee to do on a daily basis? Are there any tools or software the candidate must be familiar with?
Then, move to outline the qualifications. What educational credentials and experience does the ideal candidate have? Are there any specific skills or certifications that are required?
Describe employee benefits and salary.
Be sure to include information about the salary and benefits package. This can be a deciding factor for the right candidate, so it’s important to have a competitive offer.
The first factor that must direct what salary and benefits you will offer is your own budget. We will cover taxation in more detail later; for now, it’s important to understand that you need to set aside money for salaries and benefits.
The second step is to research the market and find out what other similar roles are paying in your area. Specially qualified candidates will expect to be compensated accordingly for their experience and expertise, and if the competition is paying more, you should consider raising your offer.
Calculate employment taxes
When hiring employees, taxes must be taken into consideration. Generally speaking, there are two types of taxes that employers need to take care of:
This consists of Social Security and Medicare taxes, which are calculated as a percentage of the employee’s wages. It’s important to note that the employer and employee both contribute to FICA taxes, with employers paying a matching amount.
Federal and state taxes.
These are paid only by the employer, and employers can be subject to different rates depending on their particular industry and size of business. Some are federal laws; others vary depending on the state they operate in.
It’s important to research and understand your particular industry’s applicable taxes and regulations.
That being said, we highly recommend you get in touch with a local accountant to get the professional advice you need, as mistakes can be costly.
Finally, make sure you comply with the relevant laws and regulations. Ensure that you are maintaining accurate records of your employee’s pay, taxes, hours worked, and other details.
The best places to post a job opening
There are several places job boards and ways to advertise a job opening. In this article, we will give preference to online options rather than more traditional methods. We will also limit to listing three of the most common boards online. They are:
Indeed is one of the most popular job boards, with millions of candidates. It covers a wide range of industries, and it’s free for employers to post their job openings.
This is a great place to post jobs for high-level professionals and technical roles. With LinkedIn, you can also pay to boost your job postings and get more visibility.
Glassdoor is a great option for smaller businesses as they offer a pay-per-click model and only charge when someone views your job listing.
These are just a few of the many options available for posting job openings. Depending on the type of role you are looking to fill, you may want to explore other options, such as specialized job boards or social media channels.
Part 3: Conducting your small business hiring process
After working through your motivation, creating a job description, and posting your job, you started to get the first job candidates through. There are many great CVs on your table, and you feel one of them could be a new potential employee.
And so, it’s time for the real deal: the interview process.
Recruitment specialists vs. conducting it yourself
There are two ways to work with sorting CVs and applications from job seekers. One is to perform the interviews yourself, and the other is to hire a recruitment specialist or agency to conduct them for you.
A recruitment specialist can help you hire positions that may lie outside of your realm of knowledge. For example, if you are hiring a new employee for marketing but you have never worked with it before, a hiring agency or independent contractor can assist you, especially when it comes to evaluating technical skills.
However, if your employee is going to perform a role, you are an expert at or familiar with; you might want to conduct the interview process yourself.
Filter the most qualified candidates.
Whether you will try to find the right person for the job yourself or delegate this task to an expert, an effective hiring process will need to sort all the applications first.
The best way to get started is by creating an initial screening process. This should include questions that will help you to assess the basic qualifications of the candidates, such as education, experience, certifications, areas of expertise, skills, and qualifications.
Many candidates will be filtered at this point. Remember not to be too broad with your filter. After all, you are looking for just one employee for the role. A good rule of thumb for most businesses, especially small businesses, is to have at least 5 to 10 candidates per open position.
Once you have narrowed down the list of potential candidates, you should start the process of interviewing.
Define and conduct an effective interview process.
Whether you are talking to potential employees online or in person, it all starts with good interview questions.
Your hiring decision has to rely both on technical skills and personality fit. In other words, you can have a top talent right in front of you, but whose life goals simply don’t match your small company values at the moment. It is also true the other way around: you might have found a great person that, for now, doesn’t possess the right talent or skills you are looking for.
An interview script might come in handy to help you make the right hiring decision. Nonetheless, you don’t need to stick to it word by word. The most important is to be genuine in your interest in learning about applicants.
If you included the need for a cover letter in your application process, for example, read it thoroughly and ask questions. Understand career patterns, find what the potential employee is looking for at your company, etc.
In the end, list employee benefits, share your expectations, tell what your small business’ workplace culture and more – even if it will be just one employee for a while is. Also, let your candidates ask all their questions, answering clearly and patiently.
Remember, potential employees might not succeed in their first attempt at working with you, but they can definitely be a good fit further down the line. Providing a good hiring process experience can go a long way in building bridges for future hires.
Make a job offer
At last, the final step of your hiring process: making a job offer. Extending an invitation for a new team member is an exciting moment – and even more so if this is your small business’ first employee.
It is critical that you communicate your job offer as clearly and straightforwardly as possible. Below you can see a few steps for sending a job offer to your chosen employee.
Give a phone call to tell the news.
You are set to start a new journey together, so communicating your decision through a phone call is preferable over simply sending a text message. Needless to say, if you can’t reach the person, follow up with a message.
Formally send a job offer via email.
After you notify the chosen candidate, send a formal email with a summary of your job offer. List the benefits package in detail, working hours, and everything in between
Negotiate if necessary
Your future employee might raise questions or want to negotiate certain aspects of the working contract. Don’t take any of this personally, and be open to a counteroffer if necessary.
Part 4: Onboarding new employees
After all, the legal and bureaucratic part is done; it’s time to receive your new employee at your small business. Here we will list a few of the best practices for onboarding new employees in your small business.
Provide an awesome first impression.
The first days of work in a new jog are some of the most memorable moments for many, and it can mean making it or breaking it, depending on how welcoming the beginning feels. If you have other existing employees, organize a get-to-know moment where everyone can integrate faster.
What you definitely will want to avoid is having your new hire sit at a desk all day wondering, “now what?” reading through boring documents alone. This is especially true if this is your first employee, since, just like that, your small business doubled its size.
Another situation in which the first impression matters the most is with remote employees. Integrating remote workers within your small business is especially important and reduces the chance of premature quitting.
Provide credentials and easy access to tools.
Before your new employees join your team, it is also critical that you have credentials and accesses organized and readily available for them.
One tool that can help you manage passwords and share them more easily with new team members is bitwarden.com or any other password management system. With one such tool, you will only need to share one credential.
Have a clearly defined objective for the first weeks and months.
Having an integratory period is a great way of setting clear goals and expectations for the new hire.
Measuring the first days, weeks, and months of your new hire has two effects. First, it will ensure you start to get results from the get-go. Second, it creates a tremendously positive experience for new team members as it makes them feel integrated faster.
If the type of work the person will perform is technical and requires a getting-used period, then associate the first tasks with learning and testing new tools, procedures, or whatever it is that you sell.
Small business owners can benefit from conducting periodic assessments. Align with new employees what will be measured and when, and you will have a much easier time realigning expectations or rewarding your new hire in the future. And speaking of which:
Know when to reward or let go.
If your new hires are performing well according to the expectations you laid out for them, then great! Your small business can also benefit from drawing a line between “expected” and “exceeded,” so you can properly reward your new hire if they did even more than was asked.
However, it is also important to know when what you expected to be the right candidates underperform. Assess the situation first and try to understand what is happening, as it just might be your small business problem, not theirs.
On the other hand, if they really are failing to perform or simply don’t match your company’s values, it might be time to let go of your new hires. Remember not to take any of these decisions personally, and there are always other right candidates for your business.
Remember that running a small business is a journey, not a sprint, and finding the right person takes time, effort, and, sometimes, trial and error.
Growing your business steadily
We hope that this guide on hiring employees for your small business was helpful. At Appointible, we know how much each of these steps – from having your business ready to hire and send job offers to successfully onboarding new employees is a huge task.
Keep your eye close to your and your company’s mission, and you will definitely be setting yourself up for a successful hiring process.