STARTUP HR: HIRING YOUR FIRST EMPLOYEE

Startup HR: Hiring Your First Employee

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Startup HR: Hiring Your First EmployeeStartup HR: Hiring Your First Employee: Starting up a company takes dedication, time, money and endurance.  Being a startup owner takes the commitment to push through obstacles, the knowledge to build quality services or products, the ability to learn new things that are outside of your comfort zone, the flexibility to make adjustment and so much more.  Since successful startup owners are juggling so many tasks, you will get to a point where your startup needs its first employee.   Assuming that you have your EIN, state registration and worker’s compensation insurance; this OUTLINE provides the information needed to find and hire your first employee.

I. Recruitment:

Do you have a Recruiting Process in place? A solid recruiting process will ensure that you attract and retain valuable talent. Quality employees are essential to a startup’s revenue. When properly recruited and onboarded, employees stay on board longer creating profit and eliminating costs of replacement.  Get the best talent for your startup now with this Recruiting Program Toolkit!

  1. Job Posting: Post your job opening with an application on your site.  Also use other free job posting sites. Share your job posting on social media.  If you can afford to, post the open position on paid job posting sites.  Include the title, job location, FLSA Classification (Exempt or Non-Exempt from Overtime), job summary, essential functions & physical requirements, required qualifications and preferred qualifications.  Future Tip: When your startup has 15 employees, you must also include EOE at the end of the posting to show that you are an Equal Opportunity Employer.  If any tests are required, you will have to add that requirement to the posting as well.  (EOE requirements are required for Federal Government and Employment Agencies, no matter how many employees they have.)
  2. Applications: Review resumes and applications to select the top applicants who best fit the qualifications of the job.
  3. Interviews: Interview these top applicants.
  4. Selection: Decide upon the applicant who best fits the position requirements.
  5. Offer: Send the chosen applicant either a Job Offer or a Conditional Job Offer. The main difference is that the conditional job offer requires pre-employment drug testing or background checks. Whichever avenue you choose, note that all hires will have to go through the same process.  As you grow, consistency becomes key to avoiding future discrimination claims.
  6. Document: Throughout the process, document your selections with reasons applicants are turned down.  It is best practice to create these processes for when your company grows to the level of required documentation from government agencies.
  7. Retention: Retain resumes or applications in a secure location for at least one year.  Ensure that resumes and applications are shredded.

Is this position Exempt or Non-Exempt?

II. Onboarding & Orientation:

Onboarding is a process that each new hire will go through in order to be properly classified and trained as an employee of your startup.  Onboarding usually last about 90 days.  Though some companies have extensive onboarding programs, they do not typically fit into the startup model.  Do you have an onboarding process and program established?  If not, here is why you need one.   Onboarding programs not only consistently promote the company culture,   but they also increase productivity (which leads to more profitability) by ensuring that every new hire goes through the same steps.   Everyone is taught consistently about your Startup, your products and services offered; which ensures that your clients receive the same great customer service experience. Also, when new hires are properly onboarded, they are more likely to stay with the company. 90% of employees decide within the first 6 months if they are going to stay at a company.  Good onboarding programs boost employee retention percentages by 50%.  “New employees who attended a well-structured onboarding orientation program, were 69 percent more likely to remain at a company up to three years. Losing an employee due to their experiences of being confused, feeling alienated, or lacking confidence is a sign of poor onboard programming.” (Sourced from the SHRM Foundation)  Not sure how to create an Onboarding Program for your Startup? Here is a tool that will help The Complete Onboarding Program Toolkit

A. Orientation

A startup’s onboarding process should include an orientation with the following:

  1. Hiring paperwork (Check out our Forms Library for these & other sample forms)

    • I-9 form with appropriate ID’s (must be completed within 3 days of hire)
    • W-4 form (Legal tip: Do not answer questions about with-holdings. Refer the employee to a CPA or the IRS site)
    • State Tax form (Depending on your state. For more information, check with your state’s tax agency; you can find links to each state’s agency at the website of the Federation of Tax Administrators at www.taxadmin.org/fta/link)
    • Direct Deposit Form with voided check
    • New Hire Information (address, personal email, phone numbers, emergency contacts, etc)
    • Provide a Worker’s Compensation notice to the new hire. Most states require this. Find your State WC Contact Info.  Worker’s Comp is two fold: (1) It provides employees benefits no matter who is at fault for an injury; (2) Employers are protected from employee lawsuits who are seeking monetary damages for pain and suffering or mental anguish.
  2. A job description – Startups need to be careful when it comes to creating job descriptions from templates online.  Companies with vague job descriptions get sued for grey areas not properly defined in job descriptions costing hundreds of thousands of dollars in some cases.  Get this do it yourself tool kit that will eliminate those grey areas in your job descriptions: Building Quality Job Descriptions with Custom Toolkit

    • Review job description with the new hire
    • Have the new hire sign their job description
    • Retain a copy of signed job description in the new hire’s file
  3. An Employee Handbook –  If you don’t have an employee handbook, here is a step-by-step to help: How to Create an Employee Handbook

    • Review the employee handbook, any policies or procedures
    • Have the new hire sign an acknowledgment that they received the handbook
    • Retain a copy of the signed job description in the new hire’s file
  4. Benefits Offered (if any)
    • Provide the DOL Notice of the Health Insurance Marketplace and other required notices (speak with your benefits broker).
    • Review all health benefits with the new hire
    • Give them required forms or a waivers to complete for health benefits
    • Send in the completed forms to your benefit broker for processing
    • Also review your in-house benefits (PTO, Holidays, Wellness plans, Sick Leave, etc).
  5. Schedules
    • Discuss and review the office hours, schedule, working from home (if applicable), annual reviews, casual Fridays, any new hire concerns and other specific issues related to your startup.

B. On the administrative side, onboarding will include:

  1. Creating an Employee File
    • A basic employee file will include their resume & application, offer letter, new hire form, payroll form (with rate, title, department, info needed by payroll company), tax forms and acknowledgments from orientation.
    • Keep medical forms in a separate file to comply with regulations and privacy. After submitting medical information to your broker, save the original forms in this file.
    • I-9’s cannot be filed with the employee file. They must be filed separately in a binder for auditing purposes and compliance.
  2. Processing Paperwork
    • Key in or Send tax forms and necessary information to your payroll company.
    • If you do not use a payroll company, be sure to process their paychecks in compliance with IRS regulations. You’ll need to withhold a portion of each employee’s income and deposit it with the IRS, and also make Social Security and Medicare tax payments to the IRS. For more information, get IRS Publication 15, Circular E, Employer’s Tax Guide from the IRS website.
    • I-9: If you are an e-verify required state, you must login to E-Verify to verify your new hire’s citizenship status.
    • I-9: If you are not an E-Verify required state, you can choose to E-Verify if you wish. The key here is to E-Verify everyone or no one. You cannot pick and choose who will or will not be E-Verified.  It will appear discriminatory.
    • File I-9 Separately
    • Submit via fax or email: State Reporting of new hire within 20 days of hire (each state has its own form. Go to the State New Hire Reporting page at the Administration for Children & Families website www.acf.hhs.gov.)
  3. Follow-ups & Reviews
    • Plan follow up meetings with the new hire. They can be weekly, daily, or somewhere in between.
    • Create SMART goals with your new hires.
    • Plan monthly or bi-monthly checkins to ensure that all goals are being met.
    • Review the new hire’s performance annually.
    • Keeping up with these tasks can become frustrating if you do not have the right tools. A Results Journal is the right tool to keep up with goals, performance, planning, CheckIns and more Get your Result Journal for Employees or Managers here.

III. Training and Direction:

After the orientation, the new employee should be given clear directives, goals, a place to work and the tools needed to complete the tasks and duties of their job. Career planning is important, even at the startup level. More to come in future articles.

Final Tips:

Required Postings

Ensure that all legally required postings are in a visible location to employees.  You can download posters from the DOL and OSHA websites provided here: dol.gov/elaws/posters.htm and www.osha.gov

Federal Unemployment tax:

IRS Form 940 must be filed each year that you paid wages of $1,500 or more in any quarter or year that an employee worked for you. This form can be found at www.irs.gov   Startup HR: Hiring Your First Employee


More Articles:   Compliance Articles        StartUp HR Articles        General HR Articles


CREATING AN EMPLOYEE HANDBOOK TOOLKIT

The most important HR communication tool for your business! How to create an Employee Handbook Guide & Toolkit!
The most important HR communication tool for your business! How to create an Employee Handbook Guide & Toolkit!

The most important Communication Tool For Your Company!  Employee Handbooks can be a valuable communication resource for the employer and the employee. This document offers employers the chance to share what the employer expects from and offers to their workforce. It provides guidance and information related to the company’s history, mission, values, policies, procedures and benefits in a written format.


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