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When Your Business Should Hire Its First Employee

Posted August 5, 2015 by Jacob Donelly in Hiring and Onboarding
At some point, you'll need to hire your first employee. Learn when to do it and why you might want to make that leap.

Running a business by yourself has its perks. You're (most often) the sole decision maker and can drive your business forward at your own pace. And often, the idea of finding, hiring and managing employees can be daunting. But it shouldn't be. Growing your team at the right time can catapult your business to the next level.

“Fast forward to today and we have an amazing executive leadership team. This has allowed me to shift my focus from 90% tactics (doing) and 10% strategy (planning) to 100% strategy. This more than anything has made a huge difference in the trajectory of the business, which has grown well over 1,000% in the last 3 years,” said Mitchell Harper, the co-founder of Bigcommerce, in a blog post about when they started hiring. 

And he’s right. When you are starting out, you have to do everything from execution to strategy. It's easy to get stuck in the weeds, which interferes in thinking about the company's future and success. And as a business owner, you need to be thinking five steps ahead.

So When Should You Hire Your First Employee?

First thing first: determine why you and your company need to expand. Are you looking to grow your team to hit business goals? Build company culture? Help with administrative tasks? 

Asking yourself "why" will help you bring structure to your hiring needs. The proverbial “when” question can be boiled down to a very simple answer: when it is right for your business.

But to expand on that, answer these four questions to determine when you should hire your first employee. 

1. What Kind Of Work Will This Role Focus On?

First off, identify the exact role you plan to fill. Will this role focus on strategy or execution? Are you looking for a seasoned veteran or a recent college graduate? Ensure that the new hire's responsibilities will help grow your business. Don't hire someone that you'll need to load up with busy work, just to fill 40 hours per week of time.

2. Do I Have Enough Work?

Take a look at the talent profile you've compiled. Will this role be challenged and busy? Does this role have enough responsibility to fill a full-time job? 

Learn how to attract and retain top-notch employees.

Win the Talent War

3. Can I Afford It?

Employees cost money, from compensation to benefits and perks. Does your compensation budget match up with your talent profile's experience level? Another cost consideration is the compliance that goes along with having an employee. And lastly, consider the cost of a computer, desk, chair, and other necessities should be factored in. 

4. Will I Be A Capable Manager?

Bringing on new hires requires onboarding and continual training. And since you're hiring your first employee, you'll need to build that onboarding and training process. Do you have the time and resources to excel at this? And will you make yourself available to help guide your first employee to success?

To summarize, the time when you should hire a new employee is if you have the work, have the discipline to train that employee, and you can afford to pay that employee. Once you have that information figured out, you know when you should start hiring your first employee and what kind of employee you’re going to need.

Part-Time and Freelance

You don’t have to hire a full-time employee immediately.

If you don’t have enough work or budget to justify bringing on a full-time designer, perhaps you only contract out to a few that you know when you need to.

Or maybe you only have that person work part time for you. Even a part-time employee can help to take care of some of the less enjoyable work so that you can focus in on the other aspects of running your business.

Confused as to what makes an employee an employee? Check out our breakdown here

Don’t Be Dissuaded by Paperwork

One reason that some people might not want to hire an employee is because of all the work that goes into bringing that employee on board. There are all the compliance forms, tax forms, and payroll to deal with. Fortunately, Justworks can help you with all of that. We’ll ensure that all the correct documents go to all the correct places, we’ll handle payroll through our system, and when tax time comes, we’ll make sure your employees get their W-2. And when the time comes that you want to offer benefits, we can help with that as well.

Don’t let the fear of paperwork get in the way of you growing your business. We’ve got you covered.

This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, legal or tax advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor.