6 Things to Know Before You Hire Your First Employee

Hiring your first employee is a big step as a business owner. It's great that you're ready to grow your business and delegate some responsibility in order to narrow your focus, but it's also natural to be nervous about the process. We've compiled a list of the most important things to bear in mind when hiring your first employee so that you can prepare and make the right decision for your business.

#1 - Payroll

When you hire an employee, you need to put a payroll system in place to make sure that employees get paid the right amount at the right time. Otherwise, your staff won't be with you for very long.

If you're based in the US you also become responsible for withholding and submitting payroll taxes. This includes federal income tax, Social Security tax, and Medicare tax. You'll also need to pay unemployment insurance taxes and possibly workers' compensation insurance premiums. Failing to withhold and submit these payments can result in significant fines and penalties.

If you are based in the UK, there is no payroll tax but you  will need to submit Employer National Insurance contributions.

#2 - Contracts

It's important to have a written contract in place with all employees. This document should outline the employee's job duties, hours of work, pay rate, and benefits. It's also a good idea to include an exit clause in case the relationship between employer and employee doesn't work out.

#3 - A Code of Conduct

When you're operating solo, you don't really need a code of conduct - you know how to behave. However, when you have employees, it's important to have a code of conduct in place that everyone is expected to follow.

This document should outline the company's expectations for employee behavior, both on and off the job. It should also include disciplinary procedures for employees who violate the code of conduct.

#4 - Management Skills

If you're not used to managing people, it's important to learn the basics of good management before hiring your first employee. This includes setting expectations, providing feedback, and creating a positive work environment.

This is an important part of your growth as an entrepreneur. Learning great management skills as early on in your journey as possible will set you up for success later on as your business grows and you add even more employees to your organisation.

#5 - Hire Based on Attitude

You can teach new skills and provide experience, but you can't change a bad attitude. That's why it's important to take attitude into account when hiring your first employee.

Look for someone who is positive and enthusiastic about their work, even if they don't have a lot of experience. Employees who are keen to grow and develop their skills will prove immensely valuable to you and your company.

Of course, you may well be keen to hire an experienced employee, but still be sure to screen candidates carefully and pay close attention to their attitude.

#6 - Ensure That You're Financially Ready

Hiring employees is a great way to grow your business, but you need to make sure that the timing is right.

In other words, make sure that you've got enough money in the bank before making this big decision. Once you have an employee on board, it's important not to let them down by being unable to pay their  wages on time.

If you're not sure whether your business is ready for its first employee, consult with your accountant or financial advisor to get their opinion.

Final Thoughts

When it comes to hiring your first employee, there are a few things you need to keep in mind. The most important of these is getting everything set up so that they get paid correctly and on time. You'll also need contracts for both the employer and the employee, as well as a code of conduct for all staff members who work with you.

If you're not sure whether or not your company is ready for its first employee, consult with an accountant or financial advisor who can help guide you through the process of hiring employees, managing all their associated responsibilities and ensuring that your operations remain cost-effective.