Think it's time to hire? Don't do it! (Not until you're well prepared with this checklist.)
So, you're about to hire the first of what will hopefully be a long line of dedicated, talented employees. For that, you deserve a hearty cheers, and a big congratulations.
You also need to take a deep breath: Hiring isn't something to be taken lightly. Don't pull the trigger until you're fully prepared and informed. Otherwise, your plan may backfire. But remember, while hiring is a serious process for small businesses--especially those without an HR team--it's not rocket science.
I've put together a simple checklist for hiring preparedness. These are tips I share with my clients, and I'm hoping they can help a lot of you as well. Some of these tips seem intuitive, I know. But some aren't--so make sure you read, and work through, these steps before building your team.
1. Tally your major costs.
Get your financial house in order before bringing on a new hire. Having projections and profit and loss statements in place, and following them, is critical. Calculate the costs associated with each new hire and whether or not your projected revenue and existing profits will support these costs. Discuss this in further detail with your accountant. If you don't know how to read your reports ask your accountant to teach you. Don't drive the bus blindly!
2. Map out job descriptions.
Clearly plan for growth by understanding the specifics (as clearly as possible) of the jobs you are creating. Designate salaries and benefits if applicable. Also consider personality types, skills, and the experience you are seeking in your new hire. Be very clear about your new employee's responsibilities and get a training process in place. Gaps in communication are greatly responsible for failed attempts at building a great team.
3. Consider other costs.
The cost of an employee will exceed the cost of salary. You may need more equipment, space, and certainly time to train. Also be aware of payroll taxes, benefit laws, and unemployment taxes. Again your accountant will help here. Are you beginning to see a theme developing here? Yes, you and your accountant will become fast friends as you scale your company; choose a good one
4. Nail down your management structure.
If you already have at least one employee, or if there is a business partner in the picture, a reporting structure may be wise at the onset. As you grow, a reporting structure is critical.
Who will this employee report to? What process will you implement for progress updates, training, and support? If new hires report to another employee does it merit a raise or incentive plan for the newly appointed supervisor?
5. Know how you'll measure the outcome.
How will you know if you are receiving a solid return on investment from your new hire(s)? What measurements will be put into place to help you quantify the benefits, costs, and to check on performance satisfaction
6. Consider what will be unique about your hiring process.
Where will you place your ads? Which people in your network are most likely to have strong referrals for you? Will you conduct phone interviews to weed out your strongest candidates? Will you do group interviews? Will candidates be required to take a personality assessment or perform tasks or tests to qualify for the job?
7. Get the legal stuff covered.
What paperwork will your new employees be required to fill out? Is it wise to have non-disclosures or non-compete contracts in place? Get the appropriate tax forms from your accountant and consult your attorney if you are considering employment contracts.
8. Know how you'll measure performance down the road.
How will you track the employee's performance? How often will you meet to discuss their progress, or lack thereof? What period of time is appropriate for training? What measurements will you utilize for each job category to ensure that the employee is performing well? At what point will you release the employee if you are not happy with the results? Do you wish to have a trial period?
9. Get team communications in place ahead of time.
Team meetings boost morale, create camaraderie, inspire creativity, garner fresh viewpoints and ideas, and ensure stronger communication. How often will these meetings take place? Will everyone attend them? Where will they be conducted; online or in person? Who is responsible for the agenda?
10. Nail your company culture from the start.
What are the key things about your corporate culture that you will teach your employees? How will this be done? How will you know if your applicant is someone who shares the same or similar values and will fit into your culture?
Don't feel overwhelmed! Sure, there's an upfront time-cost here, but you will reap the benefits and save tons of time and frustration when you have processes like these in place.
MARLA TABAKA is a small-business adviser who helps entrepreneurs around the globe grow their businesses well into the millions. She speaks widely on combining strategic and creative thinking for optimum success and happiness. @MarlaTabaka