Hiring staff for your small business?4 things you need to know

A young woman sits across the table from a man for a job interview in an office.

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Employees can make or break your business.

key point

  • A small business is defined as one with fewer than 500 employees — but your business may need fewer.
  • Consider whether you can manage the employee lifecycle yourself, or if you should hire an HR professional to help.
  • Make sure you have a complete job description, as well as provide employees with fair wages and benefits.

In America, small businesses are really big businesses. While many small businesses have only one employee (as the self-employed), nearly 8 million small businesses have 500 or fewer employees, according to 2020 data from County Business Patterns (via the U.S. Census). In fact, the Small Business Administration defines a small business as one with fewer than 500 employees. Five hundred employees sounds like a big business to me, and if you’re starting your own business and need to hire people, you probably plan to start with a few.

Depending on the nature of your job, you may not be able to do it all on your own, so you’ll be handing over some of the process to other people who (ideally) should also be invested in being successful. Finding the right employees is crucial among all the other steps you need to take when starting a business. Here are some important questions to answer before you bring in new people.

1. Do you need HR professionals?

Before you actually hire a new employee, it’s worth thinking about your relationship with the new employee. To do this, first decide whether you will oversee the entire employee lifecycle (recruit candidates, hire, train, retain, terminate), or whether it makes more sense to hire a dedicated human resources (HR) professional as your first move. This person can also be empowered to be the go-to person for new hires for issues such as benefits, employee relations, and maintaining a safe workplace. This frees up your time to manage business issues such as the job itself and the professional development of employees in your industry. Of course, whether or not to hire human resources will depend on your business. However, it’s worth considering if you plan to end up with multiple employees.

2. What skills are you looking for?

The responsibilities of an HR professional may be fairly obvious (hire, train, and manage employees from a human perspective), but you need to think hard about the types of responsibilities that other employees will be responsible for. Depending on the nature of your business, you may be looking for someone with specialized skills, and the clearer you are about your needs, wishes and expectations, the better your chances of hiring the right person.

Take the time to draft a job description outlining the qualifications your potential hire should have. Be sure to state the job responsibilities as clearly as possible – “other duties assigned” can also be included, but employees may not be happy to learn that you have other major expectations of them that you haven’t mentioned in applying for the position.

3. How much will you pay?

Potential employees will likely be eager to learn how much you intend to compensate them for their skills and time. After all, most people work for a paycheck. Ideally, a job would also provide some level of emotional and spiritual fulfillment, but chances are, no one wants to work for a wage that is unfair and insufficient to pay bills, save for retirement, and achieve financial goals.

Do your research when determining the salary you will offer. There is a lot of data on the internet about average salaries for different industries and occupations, and for a more local perspective, you can ask other business owners in your area what they pay.

4. What benefits will you offer?

Many jobs pay beyond monetary compensation, and it’s important to consider whether you’ll be offering other benefits as well. The COVID-19 pandemic has changed the work landscape in many industries, with hybrid and fully remote positions becoming more common. If you’re opening a restaurant or planning to offer some other in-person service, it may not be feasible to extend this benefit to your employees. However, consider this if your business is web-based. After all, if you can save money on renting office space, you can spend more money on other parts of your business.

Consider carefully whether you will offer benefits such as paid sick and vacation time, retirement plans, and health insurance. Yes, these fees eat into your profits. However, if you clearly value your employees’ health and well-being, they’ll be more willing to work harder and ensure your business’ success.

Hiring employees for a new business is a big step. Answering these questions first will help you hire the right people and help them stay happy and productive while working with you.

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