If you are going to grow your business, you need to have folks working for you. While there are many solopreneurs running successful businesses in the 3rd decade of the 21st century, they are all going to find themselves capped at some income level. For realtors, mortgage lenders, and some others, that cap might be well into six figures, but for most categories of business, it will be very hard to reach $100,000 without some staff.
HIRING AN EMPLOYEE FOR A
SMALL BUSINESS IN 2021
RULES VARY FROM STATE TO STATE,
BUT EMPLOYEES TODAY COME IN FOUR TYPES:
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W2 employees – traditional employees are just that. They work for you. You are responsible for paying them, keeping them safe on your premises, giving them their specified duties, and all that goes with being a company person.
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1099 contract laborers – If you hire a graphic artist to create your graphics, and that graphic artist also does art or other services for other companies, you and the artist might choose to call it a contract labor arrangement. This means that the worker bills you for time, you give them work which they can do when they choose to, and they pay for their own payroll taxes, workers compensation, health care, etc. The rules for what constitutes a contract laborer vary widely from state-to-state, and the rules are under flux.
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Temporary workers and leased workers – If you need “employees,” but want to avoid the pain of paperwork and some work rules, you can hire temporary workers or lease your workers from a third party. You will pay a premium for these workers since the agency that supplies them needs to make a profit.
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Offshore employees – If your employees can work remotely, you could consider outsourcing your staff needs to another country. While these workers might be subject to some kinds of local laws, there is rarely any impact on you, the employer. You set wages and expectations. They provide the work product, and you pay them. In addition to finding qualified people at lower wage scales, you eliminate the burdens of employment rules and related overhead expenses for insurance, taxes, and the like.
WHY HIRE ANYONE?
Whichever approach you use, the real hope you have when you hire an employee is that they will contribute to the overall effectiveness of the company. In most cases this means they impact profits in a positive way. In some cases, you might only hope to reduce your workload while keeping profits about the same. Any employee who doesn’t help with one of those two factors is probably not an employee you need.
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WHERE TO FIND EMPLOYEES?
When hiring the traditional W2 employee, these are some of the best ways to find quality people:
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Ask around – Ask suppliers, supplier salespeople, associates in other businesses, and your own employees for recommendations. Most folks who have a relationship with you, especially a financial relationship, are not going to risk sending you a poor worker.
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Temp-to-hire – If you prefer your employees to be W2, you can still use the temp agency to find a great recruit. Let the agency know you are looking to hire and work out an agreement in advance regarding how the make the switch to your payroll. You may need to pay the premium for 2-4 months before you can hire them. Or there might be a one-time payment. The temp agency will give you high quality workers if you tell them you plan to use them for more such workers in the future.
A major benefit of temp-to-hire is that you get to test the employees’ skills, work habits, and how they fit in prior to making a permanent decision. You can just send them home after 4 hours, a day, or even weeks, without the drama of firing them or laying them off.
A huge additional benefit is that you don’t need to go through the finding and interviewing process. You eliminate huge amounts of cost, both dollars, and emotional.
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Advertise, accumulate applications, pick the best – What seems like the normal and easiest way to hire is truly neither. In a tight market, it is hard to get qualified candidates even if you pay. Indeed or other advertisers' fees to find them. In a weak job market, any notice you put out will result in a flood of resumes to manage.
In any case, you will end up with several candidates where the interview process is designed to get you a great final result. In most companies, this process is not sophisticated at all and has only a remote chance of finding top talent at any level.
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Use an employment agency or headhunter – In this case, you pay a large fee with the goal of having a professional agency find you a fantastic individual. Generally, you will have some kind of guarantee, but usually, it is limited to the agency sending you another recruit, not just returning your money.
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Interns – Your local colleges and Universities have intern programs. Their students need to have “real world” experience. While it is sometimes possible to get interns for free, the IRS rules state that they cannot be doing a job that contributes to the normal work of the company. Paid interns, usually at minimum wage, can do any work you choose for them to do. If they do well, they might be perfect employees after they graduate.
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HIRE WITH IMPACT
This concept you won’t find in any book or article on the subject. During the interview and onboarding process, you will have the new recruit’s FULL attention. There will never be a better time to create clarity about your expectations. Are you clear about your expectations? Do you have a clear job description written out? Is there an overarching company mission that you want them to live by? Quality first? Amazing customer service? No one ever beats our prices?
Most employees want to meet your expectations. If you don’t spell them out, they will make assumptions and try to meet these assumed expectations. Their assumptions might be 180 degrees away from you actual thinking. Let them know how they can succeed in the interview. Tell them what they can do to get straight A’s at your company during the onboarding process. Now you just need to make sure that if they do those things, they are rewarded early and often.
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