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7 Steps to Hire Employees while Reducing Risk
Hiring employees can be a costly and extensive process, but the price of employee turnover can be double the cost of hiring. That’s why it's important for you, as a business owner, to take the time to find the right talent, and invest in onboarding and training. These practices will not only reduce your risks and stress but save you time and money in the future.
Here are seven steps to hiring, while reducing your business’s risk. If it seems overwhelming, that’s okay! We have Business Advisors who are here to help you through this process. Their services are complimentary as part of an SCCU business membership. Click here to schedule an appointment.
Step 1: Form your budget.
It’s important to establish a budget for your hiring efforts, including employees’ payroll, payroll taxes, benefits, and onboarding.
- Consider the market when determining what pay and benefits you will offer to retain employees.
- Work with a Payroll Specialist to determine your business’s cost for employee retention. If you do not have a Payroll Specialist to speak with, an SCCU Business Advisor can help.
Step 2: Decide whether or not to do a background check.
Imagine hiring an office assistant with a criminal record for credit card fraud, and they end up stealing your customers’ credit card numbers. If you had completed a background check before hiring, your customers’ information might not have been compromised.
Experts recommend hiring managers complete sex offender, criminal database, and Social Security verification background screenings. For a cost as low as $20 per employee, you could be protecting your business, employees, and customers from potential risks.
Step 3: Create and post a clear job description.
A great job post and description should be appealing to qualified candidates. Be sure the position’s job description:
- Includes the responsibilities and skills needed to be successful in the role.
- Is easy to read by using bullets versus paragraphs for job responsibilities and skills.
- Shares your business’s values and culture with candidates considering applying for the position through a short paragraph.
Once you have your job description ready, you can save money by posting on free job boards like Indeed.com. Depending on your position needs, social media sites like Facebook can also be a free avenue to help you find the ideal candidate. Of course, LinkedIn is a great social media resource as well, but there may be costs associated.
Step 4: Prepare and conduct hiring interviews.
Sure, you already have questions in mind you would like to ask your candidates, but creating an interview guide will help you stay focused on your interview goals. During the interview, be sure to relay essential information about the position and ask the right questions to get a feel whether the candidate is a good fit for the position.
- Before the interview, have the candidate read the job description and sign off confirming they can perform the job responsibilities.
- During the interview, be clear about roles and responsibilities, and set expectations.
- Prepare interview questions that will tell you whether the candidate possesses the skills and behaviors needed for the position.
- Also include situational questions to help you gain an understanding of how the candidate will handle certain situations.
Step 5: Set up payroll services and workers’ compensation.
Though some small business owners choose to handle payroll internally, a payroll provider can offer peace of mind when it comes to filing payroll taxes. They will be able to help eliminate errors that can lead to large fines. This alone is a great reason to look into using a payroll provider to manage your payroll.
- For your protection, when seeking a payroll provider, ask them to provide proof of their financial stability and insurance.
- A good provider will have a customer support line and an easy-to-use portal that can help you:
- Calculate payroll taxes and withhold them from employees’ paychecks
- Pay and file payroll taxes
- Deduct payments for benefits and wage garnishments
- Generate W-2s for your employees
Workers’ compensation is designed to protect your business from financial burden. If you have four or more employees or at least one employee who does construction for your company, you may be required by law to offer workers’ compensation.
We partner with FINSYNC for payroll services, accounting and cash flow, and so much more. Learn more.
Step 6: Create an employee handbook.
Creating an employee handbook can help protect your business and limit exposure to potential employee-related lawsuits. An employee handbook should not be confused with an employee agreement. An employee handbook includes information on your company’s mission, vision, core values, policies, dress code, employee benefits, and perks, while an employee agreement is more of a contract between an employer and employee laying out the agreement of the employee’s employment.
- When developing your employee handbook, make sure a lawyer reviews it to ensure it doesn’t violate employee rights.
Step 7: Develop a new employee onboarding and training plan.
Having an onboarding process is crucial to your employees’ success. Be sure to organize proper training so they feel comfortable, confident, and equipped to perform their job to the best of their ability. It will pay off later!
Here are a few things that should be on your first-day checklist:
- Have HR paperwork completed, and give employees an employee handbook.
- Business owners should introduce themselves and welcome employees.
- Have the manager set time aside to discuss business values and culture, set expectations, and introduce them to their mentor.
- Give employees a tour of the business and introduce them to the staff.
- Be sure to have a work area set up for the first day.
- Set up all logins and provide access to programs they will be using.
This may seem like a lot to sort out, but we have your back! One of our local SCCU Business Advisors can help you follow these steps. It’s free with your SCCU business membership!