July 18, 2013

3 Things to Consider When Hiring your First Employee in 2013

young businessman scratching his head, hard decisionIn several recent articles I have been charting the rise of the contingent worker, so I know there are plenty of you out there (contingent workers, that is) and that the numbers of you working in this manner are increasing. Research from Randstad revealed that a 8.3 percent of you are now working in a contingent capacity, which means working as either temps, part-timers, interns, consultants, contractors and/or outsourced workers. Even if you are not working in this way now, there is a good chance that you may be working in this way soon as the use of contingent workers by companies is growing and has been increasing by 25,000 jobs a month (in the U.S. at least) for the last year or so, with 21 percent of companies planning to increase their usage of contingent workers in 2013.

This has made me realize that as more and more of you are beginning to move from unemployed or employed to consultancy/contractor capacity many of you will soon be (if not already), facing the challenge of hiring your own first worker.

Now is a good time to develop several tips on hiring your first employee – and you can find these below.

1. Engage with clients flexibly so you can subcontract, outsource and/or delegate if needed.

I admit this step should occur before you decide to hire your first employee – in as much as this is possible – as it is a necessity for growing a business. When engaging with clients, where possible, try and engage with them as a business entity and not a named individual and/or where you have permission to outsource, subcontract or delegate work to other people. Not all clients will allow this. But, it is crucial that you negotiate as many contracts as possible in this manner in order that you can legitimately pass your client work on to other workers under you control and grow your business. It’s a crucial step.

2. Decide what level of help you need.

Ask yourself whether you actually need to hire an employee at all, at this early stage. For example, do you have long-term stable, rolling annual contracts, which means that there is good predictability in your flow of work over the next one to two years? Or are you busy, but with a very unpredictable work flow? If the latter is the case, you may be better off developing some strong relationships with some reliable contractors/consultants who are more flexible and more suited to the unpredictability. You can use resources like elance, Guru, or O-Desk to find this kind of help or simply Google it. The advantage of using these organized resources like elance as opposed to going direct to the contractor is that they have very sophisticated payment technologies which  streamline the fee management process, especially for international workers. If work is predictable and intense then you may find that hiring an employee is a more suitable option. Then you’d need to focus on jobs boards, referrals and social media as a means of recruitment.

3. Follow best practices during the hiring process.

Even if it is your first employee, try and follow all the hiring best practices. Why? Because research shows that good hiring practices will be lead to you hiring better quality employees who perform well, stay longer, and give you a greater return on investment. There is an abundance of great hiring advice available on the web and on this site in the areas of: attracting talent, writing job descriptions, interviewing, negotiating offers of employment, onboarding, training, and much more. So, make sure you take full advantage of all the hiring advice available to ensure you recruit the most suitable and effective candidate possible.

And finally, one of the most important areas that you should consider when hiring your first employee is cost. There will be some additional costs that you need to take into account, such as tax, social security, hiring costs, training costs, new hardware and software. Your overheads will increase, which will mean that you may need to increase both your prices and, of course, work volume in order to maintain healthy profit margins.

If you do decide that 2013 is the right time to hire your first employee then good luck and come visit this site for more tips and advice on effective hiring.

Read more in Hiring Process

Kazim Ladimeji is a Chartered Member of the Chartered Institute of Personnel and Development, and has been a practicing HR professional for 14 years. Kazim is the Director of The Career Cafe: a resource for start-ups, small business and job seekers.