How Do I Manage My First Employees?

Part of growing a small business is adding employees. But how can you effectively manage new employees if you’ve never done it before?

You’ll need to develop systems and procedures to help ensure that you’re setting up your employees for success while providing the type of workplace that will attract the right candidates and prepare you to manage and retain them for the long term — especially for temporary or seasonal hires.

For example, before considering tasks, you might need to consider compensation or workplace values, to help find someone who’s a good fit. If you plan to hire seasonal or temporary workers, you’ll need to weigh their needs, pay and recruiting differently, before you start structuring tasks.

First check with a professional who can advise on hiring for small businesses and consider these areas of focus for hiring and managing new employees.

Compensation

First, research the salary and rates your competition pays. Different salary levels for various occupations are specific to demographic areas, and researching them allows you to see what other companies nearby are paying for similar work. Many state Department of Labor agencies provide this kind of data.

In addition to considering competitor salaries, weigh the value of the employee’s position to your business. If the new employee will be doing work that will boost revenue, such as increasing sales or developing new products, for instance, his or her compensation may need to reflect that.

To determine whether your employee should be paid hourly or on salary, consult the Fair Labor Standards Act, which provides some guidelines on whether employees can be paid hourly or salary. Meanwhile, some states and municipalities have set minimum wage standards that exceed both federal and state regulations, so it’s important to make sure you’re compliant with local laws.

Benefits

In addition to compensation, offering other employee benefits may give you a better chance of recruiting and retaining good employees. For example, your business may be so small that it’s not required to offer parental or sick leave under the Family and Medical Leave Act, but if you can afford it, you might consider offering it anyway.

While many employees value health insurance and retirement benefits, lower-cost perks such as flexible hours, more paid vacation time and options to work from home can also be attractive. If you’re not able to spend a lot of money on pricey benefits such as a comprehensive health plan or a company fitness center, consider an assortment of lower-cost benefits such as flexible scheduling and extra days off.

Other benefits may be required by law, so you’ll need to factor in the costs for things like:

• Payroll taxes (Typically required for most businesses with employees)
• Workers’ compensation insurance (Required by most businesses with employees, although some requirements differ by state)
• Disability or paid family leave coverage.

Again, your state Department of Labor will have more information.

Employee morale

Employees are typically considered to be more productive when they are happy and satisfied with their jobs. If you’ve never hired employees before, think about ways to create a positive company culture that will foster employee engagement and job satisfaction.

Start by building a personal relationship with each employee. Take time to talk to them, listen to their thoughts or concerns, and support their ideas and goals in the workplace. Also, make an effort to recognize employees’ accomplishments and contributions.

Personalities and egos

Hiring a new employee means hiring a new personality, which may, in turn, change the personality of your business. While it may not be possible to keep the business the same as it’s always been while adding to your staff, you can look for employees who will be a good fit for your culture.

Don’t fall into the trap of looking for employees who are just like you, which is common for leaders. Before hiring the first employee, write down the key words you want to describe your company culture, and use those to drive hiring conversations. Consider your own skills and where you are weakest and could use the most help — the right hire to fill in those blanks could free you up to focus on your strengths. Ask interview questions that can help gauge how an employee handles feedback, and consider what they’ll add to the company.

Managing temporary employees

Temporary staffers can be ideal for ramping up during busy seasons or working on special projects. But, if you don’t manage the process correctly, that valuable temporary labor can become challenging.

For example, fiscal resources can play a large role, so get your revenue projections and hiring budget in tune early. And make sure you’re protected. Businesses of all sizes and cycles can face potential employee fraud and theft, but the shorter relationship timelines inherent to seasonal hiring might heighten concerns.

When you hire temporary workers, consider avoiding these common mistakes:

• Spending too much time on the hiring process. Hiring your own temps can take a lot of time away from other tasks. If your business isn’t set up to easily handle background checks and other hiring necessities, you might consider using an employment agency to screen for you.
• Not making job expectations clear from the beginning. Temp workers can provide great value if they know what to do, but they could waste a lot of time (on your dime) if they haven’t received clear instructions from the beginning. Make sure temps know what time they need to be at work, how long they have for lunch, whether cell phones are allowed, and other expectations. If possible, put in writing the tasks and outcomes.
• Forgetting that labor laws apply to temps too. As a business owner, you’re required to follow the labor laws that apply in your state, regardless of whether your employees are full-time or temporary. For instance, according to the federal Fair Labor Standards Act, you’ll have to pay overtime for eligible temp workers who work more than 40 hours per week.
• Not making them feel valued. Everyone works better if they feel valued. Try to make them feel part of the team. That means involving them in all-staff meetings and team celebrations. Hopefully feeling connected means they’ll be willing to return if you need them.
• Allowing too much access. Not every team member should have the same privileges. For instance, it’s probably not a good idea to allow a temporary employee access to your business credit card or bank information.
• Not considering future needs. Rather than viewing all temps as strictly temporary, work to build relationships with them. You never know when you may need to refer to your network of temp relationships to fill a full-time position.

After taking these steps and thinking through all the different aspects of being an employer, you’ll be ready to hire your first employee. By setting up systems and procedures in advance, you will have a workplace that is prepared to make all of your new employees feel at home.