Hiring your first employee
For startups and small businesses, getting ready to hire your first employee is an exciting time.
Typically, this means that your business has grown to the point where you can no longer operate it entirely alone and are ready to bring another team member on board. But before you submit a job posting, follow these guidelines to make sure you’re ready to hire your first employee.
Determine a Salary
Can you afford your desired employee? This is an important question that any small business owner should ask his or herself. Do some research and find out comparable salary rates by title and industry. Additionally, take the time to run cash-flow projections for your business and budget in an employee’s salary. Make sure that you're financially able to hire someone before you commit to something you can’t afford.
Get familiar with payroll tax and income tax withholding
Any business with employees of any type must comply with federal and state payroll requirements. The major types of payroll taxes in Michigan are:
- Income Tax Withholding (federal, state and, if applicable, local)
- Federal Social Security and Medicare Tax
- Federal Unemployment Tax Act
- Michigan Unemployment Tax Act
Before you hire an employee, you must register for taxes at michigan.gov/business. Once you register, you will be provided with the appropriate forms and filing deadlines.
Register for workers’ compensation insurance
All states require employers to carry insurance for coverage for work-related illness and injury. Workers’ compensation benefits typically aren’t paid by the State of Michigan and are the responsibility of the employer. They’re paid directly by the employer or through an insurance company on behalf of the employer. Determine how you want to structure your workers’ compensation insurance when you plan to hire an employee.
Display the required posters
Did you know that Michigan employers are required to display particular posters in the workplace? These posters are usually available at no cost, through online download. Visit michiganbusiness.org for a list of required workplace posters and links to download them.
Write a detailed job description and develop a performance review system
Having a detailed and accurate job description will help you attract qualified applicants and will be an excellent asset as you determine employee responsibilities. As you develop the job description, also think about an appropriate performance review system. Having a performance review system in place gives you the opportunity to help your employees grow, address performance issues and celebrate successes.
Determine your interview questions
You’ve got a lineup of qualified candidates, and now it’s time to meet them. Go into the interview with a list of questions already prepared. Behavior-based interview questions allow the candidate to respond in a way that will give you insight into how they will react to a certain situation. Here are some examples of behavioral interview questions:
- Please give me an example of a goal you reached and how you achieved it.
- Tell me about a time when you were required to work as a team. What was the outcome?
- Share an example of how you were able to motivate employees or co-workers.
Asking your questions in this style will help you get a good feel if the candidate is qualified for the position you’re offering.
Hiring your first employee is a lot of work, but can be a huge factor in your business’s growth when done right. Set yourself up for success by taking the time to properly prepare.