One of the biggest investments you will ever make as a small business owner is in your staff. Whether they are full-time or part-time, permanent or temporary, your employees not only provide the labor that runs your business, they are also salesmen (even if sales is not in their job description), and they can be a wellspring of creative energy, inspiration, and insight.
In order to capitalize on your role as an employer, you need to fine tune your hiring and training process. This guide is meant to get you going in the right direction by connecting you with the tools and resources you’ll need at every stage along the way.
To that end, each “step” includes a brief description, followed by a focused resource list. Go through the whole guide or jump only to those sections that you need:
One of the first steps in hiring is writing up a clear and thorough job description. This document is as much for you as it is for a prospective hire. When completed properly, you will have a set of guidelines describing the new position’s duties and responsibilities, defining the work environment and the equipment that will be used (and needed), and laying down the skills and expertise required to perform job. All of this will in turn help you to attract the right job candidates and will be a foundation for outlining any job training and performance expectations.
In addition to consulting the resources below, I highly recommend that you consult with a either a mentor, consultant, or business person involved in the industry who can go over your written job description before circulating it. In some cases, you may also need to show the document along with your employee handbook mentioned below to a qualified legal professional to make sure you are abiding by anti-discrimination and harassment laws, health and safety regulations, and other employment-related legal issues:
- An article on writing effective job descriptions by the SBA
- Nice, quick guide for writing job descriptions at Microsoft Office
- Access a collection of free, downloadable sample job descriptions and templates for small businesses at Growing Your Business
Step 2: Fulfilling Federal and State Regulations
When you hire employees for your small business, there is an extensive list of federal and state regulations that you need to be aware of and fulfill. These legal requirements include obtaining an employer identification number (EIN), paying payroll tax, reporting wages and taxes withheld for each employee, and fulfilling any obligations for workers’ compensation insurance, unemployment insurance, and disability insurance (which vary by state).
To receive an EIN (also known as a federal tax identification number), you will need to register with the U.S. Internal Revenue Service (IRS) as well as the state and local revenue departments. The best place to get information on an EIN is the IRS website. You can even apply for a tax ID number online for free.
For more detailed information on employer rules and regulations, see to the two resources below:
- Ten Steps to Hiring Your First Employee -A thorough guide for to employer regulations from the SBA
- A breakdown of various employment laws from the U.S Department of Labor.
Step 3: Creating an Employee Handbook
Your employee handbook is a valuable document that details your business’ policies, practices, and expectations and provides legal protection from charges of discrimination and unfair treatment. If you plan on hiring ten or more permanent workers then you should be providing this document to your new and current workers.
Since the topic of creating an employee handbook is quite complex and often involves numerous legal considerations, I have compiled a collection of informative resources that will give you most of the information you will need. Just keep in mind that an employee handbook is often considered a legal document, and as such, requires the assistance of a qualified legal professional.
- Employee Handbook Template by the SBA
- Article on what to include in your employee handbook by the SBA
- A comprehensive article and resources on employee handbooks for small businesses by Business Owner’s Toolkit
- Several resources on the sections to include in your employee handbook by About.com
- And here are a few creative ways to make your new employees actually read their handbooks at Allbusiness.com
Step 4: Advertising the Position
Once you are clear about what you are looking for in a new employee, and you have taken care of all the legal steps, you can now begin to promote the job opening in order to attract applicants. One thing you need to keep in mind is that you want to focus your hiring strategy as much as possible. You don’t want to be flooded with applicants who are inappropriate for the position.
To that end, aside from the more “traditional” hiring strategies, such as putting an ad out in the local classifieds or job boards, hanging up fliers, or even heading for a recruiting agency (the most expensive option), the Internet, and social media networks in particular, not only provide a cost-effective platform for spreading the word about a job opening, but they give you the ability to hyper-target your job openings so that the right potential candidates will see them. Here are a few suggestions on how to do this:
- Post your opening on an online jobs directory, such as SimplyHired, Monster.com, and Careerbuilder
- Alternatively, you could post the opening on any community-based, online niche sites. Many local organizations have websites that support job listings.
- If you already have a targeted following on sites like LinkedIn, Twitter, or Facebook (even if they are just your personal contacts), then you may want to send out a status update letting people know that you are hiring. Just make sure that your profiles on these sites are complete with relevant keywords and contact information.
- LinkedIn in particular has a professional Hiring Solutions arm that you may want to consider.
Step 5: Conducting Background Checks
Once you start receiving applications for your job opening, you owe it to your business to do your due diligence to weed out any candidate who may bring harm to your business or its customers. Common screening tactics include: reference checks, professional background checks, the presence of criminal records, and consulting credit reports. When conducting a background check, there are several points you should consider:
- Make sure you contact at least two of three references provided by the job candidate; you may also want to contact former employers.
- Many employers will do a simple Google search on a job applicant to see what comes up. You should, however, be familiar with the legal considerations. According to federal employment laws, employment discrimination is prohibited against qualified individuals with disabilities. They also ban discrimination based on race, color, religion, sex, national origin or age; even pregnancy comes under the definition of “protected information” and as a potential employer you are banned from asking about it in the course of an interview. Yet, much of this information may be available via social networks.
- Depending on the nature of the job, you may want to enlist the services of a professional background screening company. Be aware that any business in which the employees interact with or provide a direct service to customers, such as daycare providers, cleaners, and repairmen, are held liable if an employee does harm to a customer and it turns out that the employee had a previous criminal history.
Step 6: Conducting the Interview
After weeding out the job candidates, you will then need to focus on how you will go about interviewing them. There are several things to consider at this point: Will the interview be conducted in person? Over the phone? Online via webcam? Who will conduct and attend the interview? Will you conduct one interview or have follow up ones as well? Then, there is deciding which questions to ask.
Here are a few good resources to look at when developing your job interview strategy:
- Here is a good article on conducting a job interview by Bnet
- Take a look at the extensive collection of sample interview questions at About.com
- 100 Potential Interview Questions at Monster.com
- Oddball Hiring Tactics at CNN Money
Step 7: New Employee Training
Training your new employees is not something to just get over with. A significant factor in the success or failure of a new hire lies in the training process. With this in mind, here are a few tips to consider:
Spend time in the planning stage. Make sure that you clearly define the job responsibilities for yourself and your new employees. It may be a good idea to ask current workers for feedback, especially if the position is a new one and your current workers will be working in collaboration with the new hire.
Choose quality instructors, materials, and/or a Learning Management System (LMS). Who you select to conduct the training will make a major difference in the success of your efforts- whether it’s a professional educator or simply a knowledgeable staff member. Having the right training materials is also important, since these materials can become valuable resources for your new hires well after they have been brought on board. Finally, you may want to consider a software based training program or LMS (see below for a list of good LMS solutions).
Watch the pacing. Depending on the size of your company or the complexity of the job on hand there will be a lot of new details and ground to cover especially in the first few days. Make sure all the information is given over at a comfortable pace.
Pay attention to the results To get an idea as to how effective you are being with your training initiatives, you should have several performance measurements in place. You could consider the amount of time it takes the new hire to complete a specific task, the amount of waste or mistakes being made, or how successful the new employee’s input is.
Ask for feedback from the new hire. One of the most essential measurements of the success of new employee training is direct feedback from the new hire. There are two issues to consider before soliciting feedback: 1. Make sure your timing is right. You can’t ask for feedback too soon after hiring, but at the same time don’t wait till six months have passed. I recommend asking for feedback one to three months after hiring. 2. Where possible make the questions anonymous, since the new hire may be afraid to speak up. If the survey can’t be anonymous, then it’s success will depend on how much you as the employer will truly consider and value what the new employee has to say.
Free LMS solutions:
- Moodle LMS – Open-source learning management system that’s easy to learn, easy to use, and free of technical issues.
- Epignosis eFront LMS– Another great open-source option with an active support system and user community; there’s also a robust proprietary version.
Low-cost Proprietary LMSs:
- BizLibrary– This LMS geared towards small and mid-sized companies, has a brand new user interface and particularly good for video-based learning
- Totara– A low cost solution based on the open source LMS Moodle mentioned above, but chock-full of features
- Docebo– A robust SaaS elearning program
- Inquisiq R3 – Feature-rich with strong mobile capability
- Anewspring– A web-based LMS with an impressive set of add ons.
- Litmos – An easy-to-use and “lite” LMS.
Feathercap– Securely distribute, sell and track your learning content.
- Hiring Employees Tax Guide– Tax information about employee hiring, from the Internal Revenue Service.
- Employment Law Guide– Hiring policies, from the U.S. Department of Labor.
- Resources on Providing Employee Benefits– A comprehensive resource from the SBA
- Sample employment application 1– Generic application for employment at a small business.
- Sample employment application 2– Sample job application form, from Microsoft Office Online
- Glassdoor– Want to know what salary to offer for a new position, or how to conduct an interview for that new sales rep you’re hiring? Get information on company salaries, reviews, and interview questions, as well as job listings left by anonymous users.
- Wage Rate Calculator– A tool that figures the hourly wage of an employee, factoring in salary and benefit information, from HRWorld, a human-resources trade publication.
- Salary.com’s Salary Wizard– A database of salaries for a range of employees, with a free trial for three jobs.