7 Common Hiring Mistakes to Avoid with Your First Employee

Mar 20, 2020 3 min read

Business is booming! When you are working to get your business off the ground, it might be a one-person show in the beginning stages. When your business turns a profit, you may be ready to expand and hire your first employee. This is a big step for your business. The person you hire will be an extension of your business and will help you implement your vision. You’ll trust the person you hire with great responsibilities, so it’s important to choose the right person. These are seven common hiring mistakes to avoid if you want to get the best hire.

1.  Failing to Think About Your Vision

When you are developing the job description for the position, think through the day-to-day responsibilities that you want your new hire to accomplish. Do you want this person to be a strategic partner, or do you want them to focus on day-to-day operations while you implement your strategic vision? Your vision for the position will dictate what sort of qualities you will be looking for. Make a list of qualities that your ideal candidate will have, and a few things that would be a nice bonus.

2. Ignoring Your Budget

Whether you are looking for a clerk for your storefront, or a strategic partner for your growing operation, you will need to determine what salary you are willing to pay. Use online salary tools to ensure that your salary aligns with similar positions with local businesses. Factor in costs for insurance and retirement benefits (if you plan to offer), and any expenses you may have up front (like uniforms, technology assets, etc.). Create a budget that you can stick to and allow room to grow.

3.  Not Advertising the Position

It’s true that you can find great employees through your network, but searching in this talent pool alone is a common mistake to avoid when hiring. While your network may provide some great leads, your ideal employee may not be in your network, so think about how you want to get the word out. Create a job description that outlines what your employee will do, what skills you would like them to have, and a little about your company. It’s a good idea to make the job description appealing and not too specific: You can train for specific responsibilities. You can post the job on a career networking site (like LinkedIn or Glassdoor), work with a recruiter or simply network with you existing contacts. If this is an entry level position, consider contacting the local colleges or technical schools — they may be able to refer young professionals that have the skills you need.

4.  Flubbing the Interview

When you have found several candidates that meet your qualifications, schedule interviews. Think through the types of questions you may want to ask: behavioral, skills-based or situational questions are most common. Your goal is to get the interviewee to open up about their skills and experience. Remember that you are building a relationship with a potential employee, so set a positive tone from the beginning. Understand which questions you can and can’t ask. You will want to ask each applicant the same questions, so it may be helpful to jot down a few questions you would like to ask. Be sure to give the applicants the opportunity to ask questions about your business. Create a dialog from the beginning.

5. Failing to Extend an Offer

During an interview, outstanding candidates leave a lasting impression, but a common hiring mistake is waiting too long to extend an offer. Don’t delay or they will be snapped up by another employer — call them to extend an offer. They may ask that you follow up via email with the terms of your offer. Your terms should include things like salary and benefits information, vacation time, perks you are willing to offer and potential start dates. Your future employee may wish to negotiate some of the terms; plan for this ahead of time. Decide if you have wiggle room for salary, can throw in additional vacation time or if you have flexibility in other areas. When negotiations are complete, ask that your employee accept the terms in writing so that you can keep this information on file.

6.  Not Thinking Through Payroll

With a first employee, this is an often-overlooked step: Establish a payroll system that will ensure regular paychecks for employees. Consider implementing software that integrates with your accounting books or outsource a bookkeeper or accounting firm that will help you manage payroll needs.

7. Failing to Plan for Taxes

When you take on an employee, you will need to keep track of their yearly income and file withholding taxes. First, you will need to file for an Employer Identification Number (EIN) from the Internal Revenue Service (IRS). You will need to complete a W-4 and a W-2 form on each employee.

Hiring your first employee is a huge step for your growing business! Make sure you have your bases covered. Talk to your local Farm Bureau agent about expanding coverage on your growing business and consider adding workers compensation coverage to protect you and your new employee.

Want to learn more?

Contact a local FBFS agent or advisor for answers personalized to you.