Effective Strategies for Recruiting Employees for Your Small Business

Let’s be honest, hiring new employees can be a real challenge. It’s costly, takes up a lot of precious time, and often leaves you with someone who isn’t quite what you had in mind. But here’s the thing: sometimes the issue isn’t the applicants; it’s your hiring process. Don’t worry, there’s a way to fix that.

Hi, I’m AJ. I just sold my business for millions and have hired dozens of people along the way. I created this guide to help you master the hiring process and build your dream team.

First, make sure you have a business entity. If you already do, skip ahead. If not, a business entity is basically the foundation for conducting business, impacting your tax obligations and rights. Common types include LLCs, which are easy and affordable to set up. You can register through your state’s secretary of state website.

Next, get any necessary state or local tax IDs, which you’ll need to pay taxes on employee wages. Each state has its process, so make sure to research what’s required in yours. After applying, you’ll receive your tax ID by email or mail.

You’ll also need an Employer Identification Number (EIN). Think of it like a Social Security Number for your business. You can easily apply for one online with the IRS. Once approved, you’ll get it via email within a few days.

Now comes the tricky part: deciding how to classify your employees. Many business owners aim to expand their team but often end up over-hiring. My advice? Keep your business lean with independent contractors. Here’s a rundown of employee types:

– **Full-time employees:** Work 40+ hours a week and usually get benefits.
– **Part-time employees:** Work fewer than 40 hours and may or may not get benefits.
– **Temporary employees:** Hired for a specific period without benefits.
– **Seasonal employees:** Hired for peak times or specific projects.
– **Independent contractors:** Self-employed, not eligible for benefits, paid per project.
– **Interns:** Hired for experience, may be paid or get college credit.

Decide on pay periods: weekly, biweekly, or semi-monthly. Personally, I prefer paying employees twice a month—it’s simple, and everyone loves it.

You’ll also need a plan for holidays and vacation days. Most companies offer 10-15 days of paid vacation per year, though some offer unlimited vacation. If you’re hiring subcontractors, this isn’t something you need to worry about.

Next, create a position agreement outlining job duties and expectations. Show your company culture in the job description, including a brief company overview, qualifications, main responsibilities, salary range, and job location.

Post your job listing on popular job boards like Indeed, Monster, and LinkedIn. Specialized boards and college career centers can also be effective. Professional associations and freelancer websites like Upwork are other good options.

When conducting interviews, start by narrowing down resumes to five top candidates. Do a quick 20-minute phone call with each. Then, conduct more in-depth interviews (45 minutes) with the top two candidates, either in person or via Zoom, to assess their fit and skills. Finally, have an in-depth interview with your top choice to discuss technical skills, problem-solving abilities, and salary.

Consider having a trial period for new hires—one month followed by three months—to make sure they’re a good fit. Be clear about responsibilities and review the position agreement with them.

The final step is onboarding. This includes going through an employee handbook, introducing them to the team, and ensuring they have all the resources they need. A thorough onboarding process sets up your new hire for success.

Running your business lean with subcontractors can often be more profitable and less stressful. If you have well-written Standard Operating Procedures (SOPs), try giving them to a subcontractor first. You might be surprised at the results. Only consider hiring a full-time employee if you find yourself spending more on a contractor than a regular employee’s salary.

Hiring doesn’t have to be overwhelming. With the right approach, you’ll find the best candidates for your business. Take your time, ask the right questions, and make careful decisions. Good luck!