Along the road to business success, you’ll come upon the realization that you can't do everything on your own. It’s come time to hire some trustworthy employees to share the weight and help you expand!
The prospect can be daunting, especially if you're a new business. Hiring employees creates a whole host of legal issues, including liability and expenses. In fact, a recent study found that the average cost of hiring and training a new employee is about $4,000—and that’s not even including salary.
It’s unfortunate that it’s so complicated, but the fact remains that it’s a necessary step for your business. This guide was built to help make your hiring process easier and more effective. So let’s talk guidelines!
1) Things To Be Aware Of
WHAT YOU AREN’T ALLOWED TO ASK IN AN INTERVIEW
Although you have quite a bit of leeway here, there are some questions you simply can’t ask prospective employees. The following topics are off-limits:
- Age (unless you’re checking that they’re not underage).
- Sexual orientation.
- Marital status.
- Religious affiliations.
Physical, emotional, or mental handicaps can only be addressed if you’re asking if the candidate requires special accommodations to perform the job they’re applying for.
If you think that any questions you want to ask fall in a gray-area, consult an attorney before incorporating them into your interviews!
After the initial interview process, additional tests can provide valuable information about the stability and preparedness of potential new-hires. Psychological screenings, handwriting analyses and aptitude tests can reveal things about your candidates that resumes and interviews won't.
Remember, it’s important to check the legality of any test you’re asking an applicant to take, and be prepared to show how it’s relevant to the job!
Records You Must Keep
As an employer, you need to maintain complete, accurate records on all of your employees. There are some pieces of information that you absolutely must have, and it’s your job to verify its accuracy (to the best of your ability).
Here’s the U.S. Department of Labor’s list of required employee info:
- Employee’s full name and Social Security Number.
- Mailing address (with ZIP Code).
- Sex and occupation.
- Birth date (for employees under the age of 19).
- Hourly pay rate.
- When the employee works, with daily and weekly hourly totals.
- How often the employee is paid (weekly, biweekly, etc.).
- Total regular time earnings.
- Total overtime earnings.
- Deductions taken from employee wages.
- Total wages from each pay-period.
- What dates wages are paid and what pay-period they cover.
Dues You'll Pay
You’ll need to withhold the appropriate amount from your employee’s wages for Social Security. Keep in mind, as the employer, you’re also responsible for a portion of the total tax amount (usually the same amount the employee is paying).
Having a payroll accountant makes these calculations much easier, especially if you’re unfamiliar with current regulations.
Both the employer and employee are also responsible for paying Medicare dues. Typically, the amount withheld from your employee’s wages and the amount you, the employer, are responsible for paying will be equal (between 1 and 2%). But these regulations change over time, so it’s important to keep current on Medicare/medical tax regulations. Again, we recommend consulting or hiring a payroll accountant to ensure you’re compliant.
The employer is responsible for paying state and federal unemployment. Most states require you to pay the entire amount of unemployment tax, but you’ll pretty much always see a reduced federal rate if you comply with state regulations.
You cannot withhold money from your employees to pay unemployment tax. This one’s fully on your shoulders.
Your worker compensation insurance rates are determined by the type of business you have, the type of job the worker is doing, and your history of claims.
High-risk jobs require higher insurance rates than do ones with very little risk of injury to the employees. For example, hiring office staff could result in a worker’s compensation insurance rate of less than 1%.
You’re required to provide health and disability insurance to full-time employees, and as current healthcare legislation is evolving, you need to be aware of your responsibilities and the costs they add to your bottom line.
Again, consider consulting with a specialist in this field to ensure you’re compliant! Transitioning from a one-person operation to a company with employees requires knowledge and patience, and it’s important you keep things above board.
2) What People Lie About
When you’re hiring employees for the first time, you need to know what to look out for. Remember, you can’t trust everyone-- even if they’ve got a friendly face and a nice way of talking. Here are some of the most common things your candidates could lie about!
Roughly 40% of job applications contain false or inflated information about qualifications. That means it’s not just foolish to hire someone based on a resume alone— it’s dangerous!
Serious candidates should be subjected to background checks (at the bare minimum) and other screening measures to verify as much qualification-related information as possible.
References are crucial for gauging the quality (and honesty) of your candidates. However, they can be easily faked, or marginally informative— depending on how much the employer is willing to share.
Regardless, request three references from any serious applicant. It’s a good idea to get a mix of professional and personal references for a clearer picture of who you’re hiring. Do your best to actually speak with and verify these references!
Drug & Alcohol Use
Approximately 65% of on-the-job accidents are related to substance abuse, and substance-abusing employees are six times as likely to file worker’s compensation claims. And of course, these folks aren’t going to be upfront about their addiction in an interview.
Drug screenings (or the threat of) are an easy way to ward off candidates with drug and alcohol addictions. Keep in mind that it’s illegal to ask about prescription medications, but you can deny employment if an applicant refuses to take a drug test.
3) Questions for Potential Employees
It’s important to have a rich understanding of each individual you hire, including their strengths and weaknesses and how they’ll benefit your team. (There’s something to be said here for knowing where your weak spots are, too, so you know what strengths to look for in new-hires!)
To make your hiring process as effective as possible, clearly define the qualities, skills, and talents you’re seeking. This way, potential applicants will be able to see if they have the qualifications you’re looking for, and get a feel for whether or not they’d enjoy the job. The more time you put into outlining the position and narrowing in on what you’re looking for at the beginning, the easier it’ll be to attract the right person.
Your initial round of hiring will probably consist of weeding through resumes and CVs to see who seems like a good fit on paper. However, as we’ve mentioned, it’s essential to supplement this with a decent amount of face-to-face time with your applicants. Below are 25 interview questions, broken down by category, to help you get the most out of your interviews and ultimately find your ideal employee!
No matter what position you’re trying to fill, you want an employee who’s motivated. These questions can help you identify motivated candidates, and understand what motivates them to do their best work:
- Can you please describe the environment in which you’re most productive and happy?
- What goals, including career goals, have you set for your life?
- How would you define “success”? On the day you retire, what must be present for you to feel as though you had a successful career?
- Observing past or current coworkers, can you please describe what motivates their best performance?
- What motivates you to be your best and most successful self? Can you give us an example of this motivation in action in the workplace?
Learning about your candidate’s teamwork experience is essential. Even if they won’t be working on a team, it’s important to know how they work with other people. The following questions are designed to help you learn about your applicant’s teamwork skills and general attitude toward working with others:
- Can you please provide an example of a project you were part of and describe what your role was?
- What kinds of oversight helps make a team successful?
- Can you please describe two experiences you’ve had working on a team in a professional context?
- How would past or present coworkers describe your ability to work on a team?
- Have you been a member of a team that struggled or failed to accomplish what it set out to? What were the reasons it failed?
Again, even if your new employee isn’t joining a team or task-force, they’re going to have to be interacting with someone. The way your staff-members conduct themselves with supervisors, coworkers and customers sets the tone for your company, so it’s important to hire folks who are socially adept. These questions will help you determine the quality of an applicant's interpersonal skills:
- Can you please describe a work conflict you were involved in and how it was resolved?
- Can you please share about a time you had to work on a team with someone you weren’t fond of, and how the two of you got through it?
- What three types of attitudes, behaviors, or actions do you think are most likely to cause conflict at work and how can they be minimized?
- What are three things about you that make you easy to work with, especially in a team atmosphere?
- What do people most often criticize about you?
Leadership is a valuable asset, from the lowest worker on the totem pole to the most senior manager. The following questions are designed to help you get a sense of your candidate’s leadership potential:
- Can you please describe a time when you played a leadership role during an event, activity, or work project?
- In your opinion, what are the three most important qualities in a leader?
- What did you appreciate about your past supervisor(s)? What do you think they could have done better?
- If you were asked to oversee the reorganization of a work department, what would you do to help smooth over the transition for employees?
- Could you please briefly describe some qualities of your ideal boss?
Most of the questions we’ve listed thus far are fairly standard, and though they work well for evaluating candidates’ qualifications they don’t necessarily address personal characteristics. This final set of questions will help you get a sense of your applicant’s personality, and gauge whether or not they’ll fit with your current (or future desired) staff:
- If you could be a superhero, what would your superpowers be and why? What about your vulnerability (the kryptonite to your Superman)?
- What would you consider to be your greatest accomplishment?
- If you won $20 million in the lottery, what’s the first thing you would do with the money?
- If you were an animal, what would you be and why?
- If you were stranded on a desert island (but had an endless supply of food and water), what three items would you take with you and why?
This list is far from exhaustive, but it’s important to address the key categories we discussed: motivation, teamwork, interpersonal skills, leadership, and personality.
As you get more experienced with hiring employees, you’ll discover what questions are best-tailored to your business. Asking the same questions to a variety of candidates will help to streamline your hiring process as your company expands, and allow you to compare applicants more efficiently.
Keep in mind that the perfect candidate might not always appear so perfect on paper. Their resume might not be as polished as you’d like-- there might even be gaps in their education. Face-to-face interviews are the best way to determine what a potential new-hire could contribute to your business and how well they’d fit into your company culture!
4) Hiring An Expert
Especially if you’re hiring someone for a position outside your area of expertise, finding the right person can be daunting and even dangerous— even when you know what skills you’re looking for.
Being mindful and cautious when seeking out expert help can reduce the risk of a bad hire. Here are 4 ways you can protect your business when working with experts outside your field:
1) Chat With Experts First
Let’s say you need a graphic designer. Inspect your network and find the most qualified one(s). Explain your situation to them and ask if they’d be willing to share some insight with you. If needed, assure them that you’re not trying to poach them from their current employer!
Chat with them about graphic design— find out what types of skills to look for in a designer and learn some industry jargon. How would they identify a great designer during an interview? Don’t be afraid to ask simple stuff, like, “What’s the difference between a graphic designer and a graphic artist?” Even the simplest questions can lead to all sorts of valuable info.
2) Provide Clear, Desired Outcomes
Think about the long-term objective. Yes, this person will need to address your immediate need for graphic design, but what could they contribute to your business in 6 months, or 3 years?
Consider other job duties you could assign them. The skills that make a good designer will likely show up in other tasks, too, and having an expert take the reins can immensely improve productivity and quality. Don’t succumb to the temptation to gloss over this step— think hard about what skills you’ll need as the role expands to accommodate your growing business.
3) Stay Actively Engaged
Once you hire an expert, don’t simply release them to work on their own. Stay engaged for a while and ask a lot of questions. When their answers are outside the realm of your understanding, rephrase the question until you can get on the same page. A great way to do this is to craft questions in terms of cause and effect: “When you do ___, what happens to ___?”
Staying focused on outcomes is also important— explain what you want to see in the final product and let your expert come up with the solution.
4) Embrace Your Level Of Expertise
Remember how in grade school there was always that one know-it-all kid? And remember how everyone felt working with that kid?
Don’t be a know-it-all. No one can be an expert in every domain, and it’s just going to hurt your business if you try. So, relax and let the experts do what they do best. If you’re open and humble enough to learn from their expertise, you’ll motivate others to learn and stay at the top of their game, too.
Hiring an expert has an incredible ability to take your business to the next level, so it’s critical that you bring on the right one and manage them well. If you follow these 4 steps, you can be confident you’re heading down the path to maximizing growth and unlocking your team’s potential!
5) When To Outsource
When work is keeping you so busy that it’s spilling into your personal life, you know you’re on track toward success! However, you’re also hopefully able to sense that it isn’t sustainable– something has to change if you want to maintain your productivity, and your sanity.
If you’re hemorrhaging money each month from employing in-house customer support, human resources, accounting representatives, or any staff that aren’t really essential, it’s time to take a closer look at your needs and consider outsourcing.
How Outsourcing Helps
Before you back away in horror at the thought of outside hands touching your sterile project, consider the incredible benefits of outsourcing.
Outsourcing can allow startups to function seamlessly by taking care of necessary ongoing tasks, like web support or customer service. Ultimately, this will enable you to focus wholeheartedly on your own goals, and help your team accomplish things they don’t currently have the bandwidth or expertise to do.
That said, choosing to outsource anything in your company shouldn’t be a snap decision. As business development specialist Alleli Aspili warns:
“Deciding to outsource, like any other business investment, requires effort before it gives returns. With proper assessment, a clear outline of work expectations, and alignment of quality standards, customer service outsourcing may become a company’s biggest asset yet.”
So when should a startup decide to outsource?
1) When Caught Off Guard By Rapid Growth
Maybe you knew your product was awesome, but you weren’t expecting the rest of the world to agree so strongly, or so quickly. Maybe a recent campaign brought in tons of new users that you weren’t fully prepared for.
In any case, if you’re caught off-guard by sudden growth, chances are there’ll be lots of slack to pick up. If cash-flow is still a problem and bringing in new hires isn’t an option for you, this is a great time to outsource specialized/nonessential tasks!
2) No Need For Full-Time Employees
Most startups have at least one area of work that’s essential but not substantial enough to invest in a full-time salaried employee. In this scenario, you might consider outsourcing these tasks to qualified individuals or agencies.
Being a business owner requires continuously making decisions about how to prioritize your own time. Knowing that your necessary-but-tedious work is taken care of can give you some peace of mind and make space for you to concentrate on your highest priorities.
3) You've Got Money, But No Time
If your startup is making money but you’re seriously strapped for time, you should reevaluate the way you’re delegating the work. Spend your own time focused on the tasks you’re best at or essential for and consider outsourcing the others. These could include customer support, human resources, server management or even executive positions.
4) When The Larger Financial Picture Is Fuzzy
If your startup is working through any of the issues above, it’s wise to consider outsourcing as a potential solution. Outsourcing may not be for every company, but if you’re working with qualified people/agencies that understand your mission, you’ll be able to trust that your ever-growing to-do list is in good hands. Remember, you don’t outsource to make a service disappear, but to reduce your cost structure and keep internal resources focused on your business.
6) Wrapping Up
From selecting the right candidate to managing all the paperwork, it’s obvious that the hiring process can be overwhelming. That said, if you keep all of the issues we’ve covered in mind you should feel decently prepared when the time comes to expand your workforce.
Take it from the experts—all the time and energy you’ll put into this process will be worth it in the end. Cheers!
This definitive guide to hiring employees was a collaboration between Debra Carpenter, Aaron Armour, and Liesha Petrovich.