Your First Employee: A Milestone for any Business

If you are self-employed, hiring and developing employees might appear to be unnecessary. If you intend to grow or expand your business, however, you should include HR management in your business plan. Depending on your type of business, the demands of your market, and your skill set, you might find that you simply cannot do everything on your own. It’s time to consider your first employee

An Investment in Your Business

Human resources (HR) are a substantial investment for most companies. Having the right numbers of employees with the right mix of skills, abilities, and drive, is critical to the success of any company.

Hiring employees can add significantly to your overhead. Moreover, the strategic addition of the right human resources might not show an immediate financial return, but must be cost-effective for eventual financial success. Unless your need for additional resources is real, you may find yourself facing an uncomfortable downsizing or layoff situation.

Human resources can also represent a significant potential liability to your company. Labour laws have become increasingly stringent, and employers frequently find themselves restricted when it comes to 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 your HR requirements by:

• Reviewing your work processes (do you need to do it all?)
• Working with contract freelancers for temporary and/or skill-specific projects
• Hiring temporary worker(s)

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 for which you’ll be interviewing, the better you’ll be able to evaluate applications and choose the best candidates.
2. Create job descriptions and expectations. Not only will these two tools help you evaluate potential candidates, potential hires will have the information they need to make informed employment decisions. It’s important that both the employer and candidates clearly understand the position and expectations. Otherwise, you might be faced with having hired an employee who isn’t suitable to your position.

Recruiting Options

In recent years, the job market has become increasingly competitive, with qualified candidates in high demand. 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 your company, each offering unique advantages and disadvantages, and each requiring a slightly different approach.

1. Recruitment Services.

Use personnel agencies, executive recruiters, headhunters and other agencies that perform the function of finding, screening, and recommending candidates for a position. The selection of a specific agency is like the procurement of any service provider; you must look at reputation, experience, success, warranty, and cost.

• Advantages
  • You can take advantage of the agency’s knowledge and contact network to find qualified candidates.
  • You can save time and the expense of advertising, screening, and conducting preliminary interviews.
  • You can maintain confidentiality of the recruitment process.
  • You can be assured that sourced candidates are qualified for the position.
• Disadvantages
  • Fees can be expensive, ranging from 5% to 25% of the candidate’s starting salary.
  • You might be unfamiliar with the use of recruiting services.
  • You or your peers might have had negative experiences with recruitment services in the past.

2. Internet.

You can use online recruiting sites, or you can use your own website to create careers page(s) to advertise and accept applications for employment opportunities.

• Advantages
  • You are able to recruit candidates from a much broader market.
  • You can save time and money.
• Disadvantages
  • Online recruiting requires flexibility, creativity, and a willingness to consider new methods of interacting with potential employees.
  • You might be unfamiliar with the use of online recruiting methods.

3. Other sources:

• Newspaper and trade journal ads
• Campus / 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 for information on the current minimum requirements that you, as the employer, are required to meet under the Employment Standards Act
• Canada Revenue Agency (CRA) to open a Payroll Deductions account under your existing Business Number (BN) or to obtain a BN if you don’t already have one, and for information on the forms required, how to calculate the required deductions, and how to remit them to CRA.
• WorkSafeBC to register for workers compensation coverage for your employees, 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 each employee for his/her social insurance number (SIN)
3. Have each employee complete a TD1 Form: Personal Tax Credits Return
4. Calculate and deduct Canada Pension Plan (CPP) contributions, Employment Insurance (EI) premiums and income tax, and keep 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. Keep all records

For more information, see the Canada Revenue Agency’s Payroll Information for a New Small Business video series.

Managing Your HR Process

For many businesses, finding, hiring, training, motivating, coaching, disciplining, and developing employees is one of the highest priorities. While establishing a well-functioning staff might not appear to be straightforward, it’s a linear process.

From hiring, through orientation and development, you have the ability to select and nurture employees to closely fit your company’s culture and performance requirements. Human resources management is a process that can be effectively and productively managed.

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