How to make sure you’re ready for your first hire
A growing business will inevitably require a growing team and, for those business owners who have never done it before, making that first hire can be a stressful process – especially if you get it wrong.
That’s because, for a small business, employees can mean the difference between success and stagnation.
Getting the right help at the right time means you’ll have expanded capacity and, ideally, the opportunity to increase revenue.
On the other hand, mismanaging this process could put you in a financial hole that could even result in business closure.
So before you even get to posting a job ad, there are several things you can do to make sure you’re poised for success.
Complete a pre-employment business audit
Before you can even think of hiring someone into your business, it’s important to stress-test your thinking to ensure your first hire makes strategic sense. Employment must work with your business plans, rather than be left to reactionary, ad-hoc behaviour.
The following is a list of key questions to answer, either with your business financials or with market research. Treat it as a checklist that must be completed before taking your hiring plans any further.
Where’s the financial value and what’s the opportunity?
This question requires you to do some crystal ball gazing using your annual business revenue as a baseline.
Have a look at how your business has been performing with just one employee (you) and try to ascertain where a new hire could have the most impact.
Calculate how much more revenue they might generate as a result of their presence and give yourself a wide margin of error to account for high-performing candidates versus low performers.
What should you expect to pay an employee?
This is where a little market research comes in.
For every job on the market, there’s a relatively narrow band of salaries that will guide the expectations of anyone looking for work in that space.
Having said that, other factors can impact wage expectations such as locality and the experience of the prospective employee themselves.
A role that can be performed remotely by a junior worker, for example, would attract a lower salary than a similar role offered to a highly-experienced worker in a CBD office.
Can you afford to spend?
For this point, you’ll need to review your cash flow and factor in the impacts of additional labour costs.
If you’re carrying enough extra cash, is it enough for you to meet the market rate for the role you need and still leave enough left over for incidentals?
If not, you may need to consider taking on a part-time or casual employee while you scale your business.
In some cases, taking out an unsecured business loan may allow you to cover the shortfall temporarily.
Once you’ve completed the above assessment and you’re confident your business life will only be improved by hiring the right person, there’s just one major thing left to do.
Create an employment process
Fact is, hiring someone is only the first step in a long journey that describes a very specific type of business relationship.
Your employee will need to be onboarded, developed and, ideally, promoted as they continue to grow with your business.
They’ll want to have transparency into their pay, their leave entitlements and you’ll also want to be able to have access to all of this information at a moment’s notice.
For many of these things, you’ll want to create systems and processes, such as operations manuals or training documents.
But when it comes to pay, modern technology is here to do the work for you.
So, while you’re getting your processes in place and writing up a killer list of interview questions, you should also make sure you’re correctly set up with a good payroll solution.
If you’re using MYOB Essentials, you already have everything you need to set yourself up for payroll. Click here to read how.