Business Owner's Overview Of The Hiring Process

Your business has grown and you’ve made the decision to find people to help you manage things. Now, you just need to know how to hire.

Bookmark this page. Every business owner should follow this basic hiring process, whether adding the first employee, or the 100th:

Preplanning:

Are you really ready to hire? Make sure you do your due diligence first. Employees are expensive in terms of time and money, so make sure you truly have a need for a part or full-time employee. Be sure to look into other options such as outsourcing and temporary help first. If you need an employee, but your cash flow is somewhat unpredictable, you might want to consider hiring family members instead.

Once you decide to hire an employee you will first need an Employer Identification Number (EIN). You can reserve your EIN by calling toll-free 1-800-829-4933.

Employers must also obtain workers' compensation insurance coverage through an insurance agency.

You must have your employee complete and sign Form I-9 (from the Immigration and Naturalization Service) and retain that information in the employees' file.

Every new hire must complete a Form W-4 so that you can withhold the proper amount of income tax from each paycheck.  You must also withhold Medicare and Social Security (1.45 percent and 6.2 percent, respectively). It's important to remember, however, that you are just holding this money, and you must file IRS Form 941 (Employer's Quarterly Tax Return) and pay these taxes quarterly, so don't withhold this money and then spend it later!  You will also have to match the FICA (Medicare and Social Security) amount of 7.65 percent. Managing these processes can be made simpler by using a Payroll services provider.

Recruiting:

Prepare a job description. This document contains a brief description of your company, the duties of the job, the job type - part vs. full-time, required qualifications & certifications, compensation range, application deadline, and required checks (such as drug, credit, criminal and/or reference checks.) 

Select & post the job description to several advertising sources (such as monster.com, craigslist.com, local papers, professional organizations, etc.)

Review the applicant resumes. (Refer back to the job description to ensure that the resumes you tag for future contact match up with the qualifications you specified. Select the top five candidates for screening via phone.)

Complete phone interviews. (Select the top three candidates for in-person interviews.)

Complete in-person interviews. (Select the top candidate for checks.)

Complete required checks.

If the top candidate passes, extend a verbal & written offer.

Once the candidate accepts, notify the other candidates that the position has been filled. Retain applicant resumes for future job openings.

Retention:

Invest in training.
Offer bonuses or incentives for good performance.
Complete yearly performance reviews so the employee knows where she/he stands.

Important Documents:

Retain an official file on each employee that contains:
The job description.
The employee’s resume.
Results of checks.
The signed acceptance letter.
The signed I-9 & copies of accompanying documents.
The signed W-4.
Results of completed performance reviews.

Make sure you have an Employee Handbook, and that each new hire reads it.

So, that’s How To Hire in a nutshell. Good luck with all of your employee recruiting & retention efforts!