Most start-ups start as one man shows, where the owner is doing everything from IT, to bookkeeping, sales and marketing and everything in between. The reason for this is that hiring employees costs money, money that a new company cannot to allocate to bringing someone new on board.
Reaching the point where you can delegate work to someone else is an important step in building a business. Hiring an employee as a full-time worker makes it possible to give them the lower-level work so that you, as the owner, can focus on making sales, building customer relationships and developing new products.
The role of your first employee will depend on the type of company as well as your individual needs.
Are you hiring the person to take on some of the more mundane tasks freeing up your time, or are you going to hire someone who possesses a skill your company is lacking. For example, you may need a graphic designer to work on your website, marketing material, etc or you may want to bring an accountant on board to assist with your financial management.
Building your employee team
Have you been thinking about how to build your team? Do you know the people you want to bring on? It’s time to start ironing down the team and the employees, and start the recruiting process. Depending on your specifics, you’ll probably need job descriptions, and you’ll need to place ads on the right websites.
Start thinking about your employee list.Who will you need to help you out when you actually open for business? Will it be just you and your business partner? Do you need to hire service people? Drivers? Designers?
To get started, take another look at the financial planning you did before starting your business, see who you can afford to hire and start looking
Before you hire your first employee ask yourself the following questions:
- What do I need my employee to do for me?
- How many hours per week do I need my employee to work?
- How many more sales do I need to bring in to cover my employee’s salary?
- What employee benefits can I afford to provide?
- How much time will I need to spend managing my employee?
Do’s and don’ts of hiring staff
Assuming that you do decide to hire an employee, keep these dos and don’ts in mind:
- Do write a clear and concise description of the position before you post your ad.
- Don’t neglect to scan the classifieds (either online or in your local newspaper) to get a sense of how much other employers are paying for comparable positions.
- Do interview at least three candidates for the job.
- Don’t hire the first candidate who walks in the door.
- Do call at least two references (preferably former employers) to check the candidate’s background.
- Don’t ask the candidate any questions about his age, race, gender, family or health.
- Do hire a candidate who has the potential to grow with your business.
- Don’t hire a candidate because you’re burned out and desperate.
- Do prepare an employee handbook and require your employee to sign it.
- Do give the employee an offer letter spelling out his duties and compensation.
- Don’t promise raises and benefits you can’t deliver.
Employee background checks
When hiring staff, you should place a lot of emphasis on honesty and integrity. You should be cautious of exactly who you are bringing into your company. Some of the checks you can do during the recruitment process include:
- Does the person have a criminal record involving theft or fraud?
- Verify that educational qualifications are from recognised institutions.
- Call at least two previous employers to confirm the applicant’s position, length of employment and their reason for leaving.
You as an employer can turn to risk mitigation and credit checking companies like Experian or Kroll to run certain checks on your behalf. Once an applicant signs a form granting permission to run a background check, you will specify which checks you wish to run and the company will send you a comprehensive report, usually within two days. Some of the checks include high school certificate, tertiary education, ID and physical address, passport, credit and criminal record checks. The cost of running these checks depends on how in-depth you want the screening to be, but is usually a small cost considering that you are receiving accurate information from accredited sources.
Legal compliance
There are certain legal obligations that you as an employer need to meet when hiring employees. You will have to register with SARS as an employer, and will be responsible for the collection of:
- PAYE
- UIF
- Skills Development Levies
Useful resources
- The Department of Labour: www.labour.gov.za
- Experian: www.experian.co.za
- Kroll: www.kroll.com
