How to Hire Your First Employee

Do you need help managing your small business? Depending on your type of business, the demands of the market, and your skill set, you might find it overwhelming to do everything on your own. This is a great time to consider hiring your first employee.

When expanding, it’s important to include human resources (HR) management in your business plan. Hiring your first employee is a milestone for any business, and you should get it right the first time.

An Investment in Your Business

HR is a significant investment for most companies. Having the correct number of employees with a good variety of skills, abilities, and drive is critical to success.

But, hiring employees can add to your overhead. The addition of HR might not show immediate financial return and must be cost-effective for financial success. You should ensure that you have a real need for more employees. Otherwise, you may face an unfortunate downsizing situation down the line.

HR can also represent a significant potential liability to your company. Labor laws have become stricter, and employers frequently find themselves restricted when hiring, promoting, disciplining, and terminating employees.

Evaluating Your HR Needs

Hiring permanent employees is one way to fulfill your HR needs. You can also meet these requirements by:

  • Reviewing your work processes and workload.
  • Working with contract freelancers for temporary or skill-specific projects.
  • Hiring temporary workers.

If you determine that a permanent employee is the right decision for your business, you’ll need to:

  1. Determine who you need – The better you understand the position you’re interviewing for, the better you’ll be able to evaluate applications and choose the best candidates.
  2. Create job descriptions and expectations – These tools will help you evaluate candidates and give potential hires the information they need to make an informed decision. Both the employer and candidates must understand the position and its expectations. This ensures that you’re hiring an employee properly suited for the position.

Recruiting Options

The job market has become more competitive in recent years, with qualified candidates in high demand. Factors such as population, age demographics, regional economic conditions, and recruitment competition challenge companies to look at new and creative ways of staffing.

Several recruiting options are available to you. Each offers unique advantages and disadvantages and requires a slightly different approach.

1. Recruitment Services

Use personnel agencies, executive recruiters, headhunters, or other organizations to find, screen, and recommend candidates for a position. When choosing a specific agency for the job, you must look at reputation, experience, success, warranty, and cost.

  • Advantages
    • Use the agency’s knowledge and contact network to find qualified candidates.
    • Save time and the expense of advertising, screening, and conducting preliminary interviews.
    • Maintain confidentiality in the recruitment process.
    • Be assured that sourced candidates are qualified for the position.
  • Disadvantages
    • Fees can be expensive, ranging from five to 25 percent of the candidate’s starting salary.
    • Unfamiliarity with the use of recruiting services.
    • You or your peers might have had negative experiences with recruitment services.

2. Internet

You can use online recruiting sites or your website to create career pages to advertise and accept job applications.

  • Advantages
    • Recruit candidates from a much broader market.
    • Save time and money.
  • Disadvantages
    • Requires flexibility, creativity, and a willingness to consider new methods of interacting with potential employees.
    • Unfamiliarity with the use of online recruiting methods.

3. Other sources

  • Newspaper and trade journal ads
  • Campus or school recruiting
  • Job fairs
  • Recruitment open houses
  • Recommendations and referrals
  • Walk-ins and unsolicited resumes
  • Job hotlines

You’ve Made a Hiring Decision, Now What?

When you hire employees, refer to the following organizations to ensure you are meeting your legal obligations as an employer:

  • BC Ministry of Labour, Employment Standards Branch – Information on the current employment standards that you, as the employer, must meet under the Employment Standards Act.
  • Canada Revenue Agency (CRA) – To open a Payroll Deductions account under your existing Business Number (BN) or obtain a BN if you don’t already have one. And for information on necessary forms, calculating deductions, and remitting them to the CRA.
  • WorkSafeBC – Register for workers’ compensation coverage or if your business is incorporated.

Payroll Requirements

As the employer, you are responsible for ensuring you understand and follow each step involved in the payroll process.

  1. Register and maintain a Payroll Deductions account.
  2. Ask employees for their social insurance number (SIN).
  3. Have each employee complete a TD1 Form.
  4. Make payroll deductions for Canada Pension Plan (CPP) contributions, Employment Insurance (EI) premiums, and income tax. Keep these deducted amounts in a separate bank account.
  5. Remit payroll deductions with your share of CPP and EI.
  6. Report employee deductions on T4 or T4A slip by the end of February each year.
  7. Complete a Record of Employment (ROE) upon employee departure.
  8. Maintain all records.

See the Canada Revenue Agency’s Payroll Information for a New Small Businesses video series for more information.

Managing Your HR Process

Finding, training, motivating, and developing employees are among the highest priorities for many businesses. While establishing a well-functioning staff may take some time, don’t forget that it’s a linear process.

You have the ability to select and nurture employees to fit your company’s culture and performance requirements. While hiring new employees may seem daunting, these tips will put you on the right path to managing HR more effectively.

How Small Business BC Can Help Your Business

SBBC is a non-profit resource centre for BC-based small businesses. Whatever your idea of success is, we’re here to provide holistic support and resources at every step of the journey. Check out our range of business webinars, on-demand E-Learning Education, our Talk to an Expert Advisories, or browse our business articles.

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