7 Common Hiring Mistakes to Avoid with Your First Employee

When your business is in its beginning stages, it might be a one-person show. But once it really starts booming, it might be time to think about hiring some employees. 

If you’ve reached that stage, congratulations! These are exciting times for you and your business. You’re probably turning a profit and ready to expand — this is a big step. 

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 acquaint yourself with mistakes hiring managers should avoid when making decisions about new employees. Knowing how to avoid hiring mistakes will help you expand in ways that will benefit you and your business in the long run.  

Before you post your job listings and start interviewing candidates, take a moment to think about what kind of person you’re looking for and how you’ll conduct the process of hiring. 

We’ve compiled seven common hiring mistakes to avoid if you want to get the best hire. Remember, if you want to talk through these mistakes or anything else about your business with a professional, reach out to Farm Bureau. 

Mistake 1: Failing to Think About Your Specific Needs 

Developing the job description is often the first step in hiring a new employee. Doing it well is how you’ll begin to attract the right candidate for your needs. When you are coming up with your description of the position you need to fill, 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 the qualities you’ll be looking for — both the qualifications and other skills, such as organizational abilities or experience with ideation. Make a list of qualities that your ideal candidate will have and a few things that would be a nice bonus. 

Mistake 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 and able to pay to your new employee. 

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 or are required by law to offer them), as well as any expenses you may have up front (such as uniforms, technology assets, and so on). Create a budget that you can stick to and allow room to grow. 

And keep in mind that in some regions of the country, you may be required to advertise the salary range with the job listing, so look up pay transparency laws in your state and municipality. 

Mistake 3:  Not Advertising the Position 

It’s true that you can find great employees through your network. But searching only in the talent pool you’re directly connected to is a common mistake you want to avoid. While your network may provide some great leads, your ideal employee may not be in your network! 

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, since you can train for responsibilities that may be particular to your company. 

You might want to post the job on a career networking site (like LinkedIn or Glassdoor) and work with a recruiter. If this is an entry level position, consider contacting local colleges or technical schools with programs pertinent to the job function you’re filling — they may be able to refer young professionals that have the skills you need. 

Mistake 4: Fumbling 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 and situational questions are most common. 

Your goal is to get the interviewee to open up about their skills and experience, as well as getting a feel for how they’d fit into the culture you’re hoping to develop in your company. Remember that you are building a relationship with a potential employee, so set a positive tone from the beginning, and understand that there are 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’ll repeat with each candidate. Be sure to give the applicants the opportunity to ask questions about your business, too — they’ll certainly want to know something about your company. (If they don’t, that’s probably a red flag!) 

Mistake 5: Failing to Extend an Offer 

Outstanding candidates leave a lasting impression during the interview. But one common hiring mistake is waiting too long to extend an offer. Don’t delay, or they may be snapped up by another employer — call them to extend an offer as soon as you’ve made a decision.  

It’s likely that they’ll ask you to follow up via email with the terms of your offer. Your terms should include salary and benefits information, vacation time, perks you are willing to offer and potential start dates. 

Your future employee will likely wish to negotiate some of the terms; plan for this ahead of time. Decide if you have wiggle room for salary, additional vacation time, other benefits or additional flexibility in benefits. Negotiations are a way for both employee and employer to feel like they’re making the right decision. 

When negotiations are complete, ask that your employee accept the terms in writing so that you can keep this information on file. 

Mistake 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, including tax and benefits deductions. 

Mistake 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. Be sure to consult with a financial expert if this is unfamiliar territory for you. 

Protect Your Business 

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