Know the Law
Understanding the laws that apply to the employee you hire, and to your specific type of business, is vital in avoiding the headache of legal troubles down the line. Some of the most important laws to study include:
- FLSA: The FLSA, or Fair Labor Standards Act, dictates the minimum amount of standard and overtime pay each employee must receive. It also covers how long minors are able to work in a standard week, and which jobs those under 18 may not work at all.
- OSHA: OSHA, or the Occupational Safety and Health Administration, provides guidelines for health and safety at the workplace. This is especially important for employees that do potentially-dangerous tasks, such as work with heavy machinery, warehouses, and production lines.
- Workers’ Compensation: Each state has its own program when it comes to workers’ compensation. The US Department of Labor makes it easy to find the program for your individual state with the breakdown found here.
Hiring a new employee may seem scary for many business owners, especially if this it is the first person you are taking on. Will the person work out? How can I can get them to stick around? Will I be a good manager? These, and many more, are questions that can run through the heads of many proprietors and cause unwanted anxiety.
In order to have the most success when it comes to hiring an employee, there are some basic points that are helpful to remember. Careful and frank consideration of each area can boost your chances of success exponentially.
When to Hire
Knowing when to hire an employee is a crucial step in getting things right the first time around. Hire someone too soon and you can run into cash flow problems. Hire someone too late and you could miss opportunities to really make your business flourish. As such, there are a few basic signs that it may be time to bring someone on.
- New Revenue Opportunities: One of the best ways to expand an online business is to increase what you offer to include complementary services or products. However, one of your best ideas may be something that you are not personally knowledgeable and adept at, making the services of someone with specific experience in it a worthwhile addition.
- Customer Complaints: If you are constantly receiving negative feedback from customers over things like timeliness or the quality of your work, it is an excellent sign you are spreading yourself too thin. Even if you just need to pick someone up to do basic customer service tasks, it is something you definitely do not want to put off.
- Turning Down Business: If you consistently turn down work, not only does it lose you money, you also might lose the trust of the customer. Figure out how much extra work you are being offered and hire someone for the necessary hours to complete it, as well as enough to make you some extra profit.
Who to Hire
Once you have finally decided it is time to hire yourself someone to help out around the shop, it is necessary to figure out who would best fit what you are looking for. A few things to keep in mind to ensure you find the best fit include:
- Never hire out of desperation. Making an important decision like who is best qualified is much tougher to do when you are pressured by a mountain of work you need help with. Always start the process before you get to that point, so you have a clear head when it comes time to decide.
- Know exactly what you want the new hire to do. Picking someone up to just “help out around the office” is too general to identify the exact qualities and skills you need in who you end up with. If you do not know exactly what you want your employee to do, chances are they will not know either.
- Look at your first hire as a learning experience. Given how much time and expense it takes to find and train a new employee, you want to get it right as quickly as possible. Even if your first hire does not turn out to be the powerhouse you had hoped for, identify and understand where you went wrong and adjust accordingly next time.
Type of Employee
There is more than one category of employee you can hire for an online business. Some types work better than others in certain situations, so it is important to know the differences between your different options.
- Standard Employee: This type of worker is actually employed by your company, and is usually paid either a salary or hourly wage. With this type of employee, you are responsible for things like issuing W-2’s, withholding taxes, and many times providing benefits.
- Freelance/Consultants: Freelancers and consultants usually work on a contract basis, or by specific project, many timeson a temporary basis. These are usually best if you need help with a specific set of tasks, but will be fine without them once they are finished. Freelancers and consultants are responsible for their own taxes, and usually receive no benefits.
- Local vs Telecommute: The aforementioned two types of workers can also be split into a pair of additional categories: local and telecommute. Telecommuters usually work from home or at a personal office, and communicate and work remotely, usually via the internet or telephone service. Local employee come into your place of business to physically work alongside you.
Where to Hire
There are many more resources available to find employees in today’s digital age than there were before it made its rise. The internet is an invaluable tool that both enhances traditional methods of locating the perfect employee, and opens up whole new avenues to explore.
Word of mouth and referrals from colleagues or existing employees is by far one of the oldest and most trusted ways to find a new hire. With the internet, this is taken to a whole new level, with a whole host of social media and networking websites designed specifically for this purpose. Top sites to use when networking with past and prospective business associates include:
Job Boards and Sites
Websites and message boards devoted specifically to matching a job seeker with prospective employers are some of the best and most popular resources to rise from the creation of the internet. Many sites offer tens of thousands of jobs, if not more, with an enormous candidate pool for employers to choose from. Some of the largest and most popular job boards and websites include:
You may, however, find that these websites require too much combing and searching to locate a good employee for an online business. These resources contain seekers and positions for virtually every segment of business you can imagine. Niche job sites are helpful in narrowing down the field, and giving you much more targeted prospects than the big ones.
If your decision is to hire a freelancer, there is an excellent array of sites that focus on this type of employment specifically. The best freelancing job websites include:
Once you have found the perfect hire, it is time to make sure they are managed correctly and completely. This not only bypasses the possibility of legal difficulties, it also is important in ensuring that your employee is happy with their job, and have the incentive to be as productive as possible. Remember, the cost can be high to continuously find new employees, and managing and treating your employees properly and thoroughly will cut down on that need considerably.
Making sure each employee is paid on time is one of the best ways to ensure that your workers stay happy. Managing your company’s payroll efficiently and properly in all ways eliminates both missed payments and errors in taxes and deductions.
Fortunately, there are many different software programs and services that are perfect for managing your payroll, no matter what type of pay structure or business size you have. These resources can handle virtually every aspect of the payroll process, up to and including actually sending the checks or direct deposits for you. The top software designed for this purpose includes:
Payroll information is not the only type of records and data you need to keep to manage employees sufficiently and correctly. The reasons behind proper record keeping are many, and include such important points as legal compliance, tracking specific employee details, and planning for the future. The primary types of records an online business will want to have handy include:
- Tax Information
- Performance Evaluations
- Hiring Documents
Giving your employees as many reasons to stick around will not only help you avoid extra hiring costs, but also give them a great reason to give you everything you have. A happy employee is a productive one, and it really does not take too much to accomplish this goal. While all choices may not work best as a whole, even adding certain elements can cause employee satisfaction to skyrocket.
- Benefits: While it is one of the most costly ways to retain an employee, offering an excellent benefits package to new hires is probably the most effective way to get a good employee to stick around. This includes things like health and life insurance, profit sharing, 401k, paid time off, and scheduled raises.
- Perks and Incentives: Sometimes all it takes is the little things to keep your employees happy. Offering things like contests, performance incentives, or even just free local dry cleaning can tip the scales in your favor if an employee receives another offer.
- Promote From Within: If you have a new opening, always look to your existing employees first. Not only does this give them an excellent chance to move up in the company, and make a better wage, it also shows them that they are valued and doing a good job.
- Be a great place to work: A friendly and satisfying work environment is one of the easiest and most inexpensive ways to keep your workers happy just where they are. Constant communication, praise for a job well done, and a helpful attitude help to relax a person, and make them feel comfortable coming in each day. Sometimes all it takes is a smile and a laugh to turn an employee’s day around, and make them feel right at home.
Finding the right employee, hiring them, and keeping them in your stable is a process that can take time to get just right. A good employee can spell the difference between business success and failure, so any time and effort spent in the process will more than make up for itself in the long run.