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27 October, 2020 14 min read

recruiting your first employee – a guide for start-up owners

Beginning your start-up venture is exciting, stressful, and downright scary. There is a vision to be achieved, pressure to achieve it, and plenty of work to be done to get there.

 

So once you’ve finalised your business plan, getting another person on board to help take your business to next level is a good idea. You want the right person, with the right skills, who you get along with.

If you’ve worked in organisations where there are HR departments and processes, you may not be aware of all that’s involved in recruiting your first employee. Here is a 6-step guide to help you.

  1. Define your business’ needs
  2. Determine the cost of hiring someone
  3. Advertise the position
  4. Create your selection process
  5. Prepare your onboarding process
  6. Let the ATO know you're recruiting

    Step 1: define your business’ needs

If you need help with a one-off task then you don’t necessarily need a permanent employee and a freelance or contract gig might be a better option. Sign up here for nextmile’s on tap talent.

You need to identify the skills gap in your business based on what tasks you already do, and what you need done. It’s a good idea to write a list.

Use the list to create a job description that includes a summary of the business, an overview of the role’s purpose, a list of the key responsibilities, essential criteria like education, qualifications and skills required, and a job title. Don’t try and copy another organisation’s job description with the same title – they will be looking for someone completely different.

Make sure you’re being realistic and not looking for a unicorn. Someone with sales, accounting, graphic design, and IT skills with previous experience in a start-up might not exist. Prioritise the type of skills and experience you need to drive your business.

Step 2: determine the cost of hiring someone

The salary is a major consideration so determine if the person’s employment status is full-time, part-time or casual. Whilst salary is the biggest expense, there are other costs that need to be factored in like: superannuation; payroll tax; advertising and recruitment costs; equipment (like computer, phone, desk and chair); and other materials like business cards and uniforms.

Non-financial costs include your time throughout the hiring and induction processes, and ongoing management that comes with being a people manager.

If you crunch the numbers and the costs of hiring someone are out of budget then you might need to reassess. Cutting the salary in half isn’t going to get you the desired result. If you pay peanuts, you’ll get monkeys as they say, so you may have to consider limiting the responsibilities or decreasing the days per week.

Step 3: advertise the position

Time to get the word out there and start attracting talent! Consider word of mouth and your networks as a starting point. If you know a particular person who could be a good fit then it’s always worth making contact to see if they would be interested in the opportunity. Make sure that it’s ethical to approach them, and that the job is equally as appealing from their perspective as it is from yours. For example, most people won’t leave a stable job to take a pay cut unless there are dividends down the track.

But until someone has accepted an offering unconditionally then you should cast a wide net and keep your options open.

You could brief a recruitment agency but with permanent placement fees of 15-30% of the candidate’s salary (as a fee, not taken out of the salary) the may be cost prohibitive, and it still takes up your time. Seek and LinkedIn are popular job websites but you’ll have to pay to play on both and in today’s candidate-rich market you may receive high volumes of CVs that are not a match for you.  

You can register with nextmile as an employer to save yourself time and money. Sign up for free, create your selection criteria, and you will receive an anonymised shortlist within 48 hours. Find out more.

When it comes to advertising first impressions count and you’re competing with other businesses. Go in hard with key selling points that will pique a prospective candidate’s interest. Things like location, flexible work arrangements, and being able to bring your dog to work might seem trivial, but they can be life-changing and exciting to a jobseeker and can set you apart from other employers.

Include information about the business, benefits of the job, key responsibilities, desired experience, and salary.

Step 4: create your selection process

Reviewing the CVs is important but don’t let it take up more time than it needs to. Each one of your applications will need to be evaluated. Be open-minded. Push any biases aside of organisations, schools, universities or photographs you may be drawn to.

Call the suitable candidates to arrange an interview. Lock in the time and location, who they will be meeting with, what the interview will involve, whether they should bring anything, and how long the interview will take.

Prepare your interview questions beforehand. Make the candidate feel relaxed and comfortable and make notes throughout the interview. Use the time to find out why they’re looking for new opportunities, briefly go through their work history, and how they’ve handled particular scenarios before. You want them to be specific in their answers here, not using general sweeping statements. Look for potential, not just a retelling of past successes.

Once you’ve established the best candidate, it’s wise to conduct at least 2 reference checks. You should confirm the dates and titles of previous roles, as well as obtain comments on past performance and hypothetically, how they would handle the new role. Get the candidate’s permission before you contact the referees.  

Now comes the exciting part – making the offer! You can make the offer verbally and accept a verbal acceptance until the letter of offer and contract is signed. You may even wish to make them a conditional offer prior to the ref checks.

Once you have secured your new starter, let all unsuccessful candidates know the outcome of their applications - even those who were completely unsuitable and didn’t get an interview. They could be a prospective customer one day so make sure the experience is as pleasant as possible

Step 5: prepare your onboarding process

A well-prepared, well-structured induction process will give your new-starter the confidence that they’ve made the right decision, as well as set them up for success.

At the start of their first day you will need to cover the basics – where they will sit, where the toilet, kitchen, and emergency exits are, and most importantly, where they can get coffee.

Provide them with information about the business such as your business plan, reports, strategy, or brand guidelines, and any processes you may already have in place.

Take them through what is expected of their role and how this will have an overall impact. Discuss and document their Key Performance Indicators and how often these will be reviewed together.

Assign some tasks and deadlines to ease them in. Getting through the preliminary reading they need to do could be a good start. Or finishing any training modules they may need to undertake for their role.

Set up meetings for them such as contractor or vendor introductions, and a series of one on ones with you to discuss their progress, performance, and probation.

A coffee, morning tea, or beer during the first week always goes down well. This new recruit is a huge deal for you too so congratulations are in order for both of you!

Step 6: let the ATO know

You need to notify the ATO that you have hired your first employee. You do this by registering for pay as you go (PAYG) withholding. This is how you pay the ATO the tax from your employee’s wage so they don’t get hit with a giant tax bill at the end of the year. Like death, paying taxes is unavoidable, so this is non-negotiable and must be done before your new starter’s first pay day.

Visit the Australian Taxation Office’s website for more details on what your obligations are and what paperwork you need such as PAYG Withholding, Tax File Number (TFN) declaration, superannuation account details and payroll tax on business.gov.au.

We hope this guide helps you find the right person and take your business to the next level.

 

It could be the time to try nextmile for your next hire.

No cost to post jobs, guided job description creation and a shortlist of matched talent in 48 hours. Free to get started. Find out more.