So, your business has grown to the point where it has become apparent that you’ll need more hands on deck. Congratulations! It’s time to hire your first employee. Aidan Parsons, director of business development at Keystone Executive Coaching, shares five important things you should consider before you start the hunt for your first offsider.
Everyone in business starts out as a sole trader. We go from working in a job for someone else to working in a job for ourselves. We sit in this space and hustle away, working our fingers to the bone, knowing it is all worthwhile because when we work harder, our bank balance looks healthier.
Then sure enough, the work piles on, your time gets less, and in comes the first big step in becoming a business – your first employee! You know that you need to hire someone, but how? When is the right time? How do I find them? Will it break my business?
These are the questions you will find bouncing around your head as you lay awake at night.
Here’s what you need to know:
When a business is looking to hire their first employee, quite often they are in the space where they have too much work for one person, but not quite enough for two. This can be confronting because if we are really honest here, paying a full time employee will risk taking food from your table to put on theirs.
This is where scaling becomes so important because it manages the financial risk. Consider the following suggestions when looking to scale:
- Incorporate a commission structure where appropriate
- Use internships if applicable
- If the role permits, hire a virtual assistant to measure workload at a lower cost point
Through modifying the scale at which you bring in an employee, you modify the risk. However, be aware, the quality of employee you attract may be impacted.
A major component of hiring an employee is the associated costs. You must know:
- The impact of an employee on current profit margin per sale / contract
- The associated costs of hiring an employee (insurance, extra space, licensing, advertising, etc.)
- The impact on your personal income and if it’s manageable at the moment
- How you can balance financial risk until your employee is performing optimally
Make sure you know the answer to each of these questions. The last thing you want is to be paying your employees while your own bank account sits in the red.
This is hands down the most important part of hiring an employee, but often is never considered. How will they affect your brand? You as a business owner have worked so hard to develop your reputation in the marketplace, and right now you are about to allow someone else to trade with your name.
This has to be done carefully! Think about it, you are risking not just your current cash flow but all future jobs. Your new employee must strengthen your brand.
We advise everyone looking to hire at any stage to complete the following:
- A brand statement information package as part of the hiring process
- Educate potential employees on your packages and measure their understanding
- Seek consumer feedback intermittently (ongoing)
4. Role Description:
If you are hiring an employee, you must know what they need to do in order to be successful. And more importantly, they need to know as well. This is called a role description.
If your employee is not performing, you need a point of reference and agreement of what their role entails for them to work towards. It also becomes a ‘how to’ manual for your employee, should you be uncontactable.
There are a thousand different templates out there but Fair Work Australia have the best one in our opinion.
5. Attitude vs Skills:
Always hire on attitude before skills. This can be hard, as you only get a brief experience of someone’s attitude when you are interviewing them. It is for this reason you should always employ on a trial or probation period where possible.
When this is your first employee it can be difficult to hire attitude over skills, as you cannot afford to spend a lot of time training someone that you are paying by the hour. But remember, the cost upfront to get a motivated employee up to skill will be far less than the cost of a highly skilled employee who won’t work.
These are the main points to ensuring the hiring experience goes smoothly, however there are a lot more to consider so we use a checklist for our clients which you can grab here for free.
This article was originally published in 2016 and has been updated for 2022.
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