Small Business Hiring Tips
If you own a small business, chances are you have already faced the tough task of hiring (and even firing) employees. When you run a small business, getting it right the first time is extremely important. Unlike larger companies that can afford to take a few hits, there is little margin for error in a small business and hiring the wrong candidate cost you everything. Tackling the hiring process can be a daunting task. Here are a few small business hiring tips for owners that will help you with such an endeavor.
- Making the wrong decision is costly
- Understand employment law
- Hiring family and friends
- Record keeping
Making the Wrong Decision Can Be Costly
So you read through a list of resumes and feel you have the right candidate. After a few short interviews you decide to hire that “perfect” person and get them started. Months down the road, you are rewarded for your excellent choice by filing for bankruptcy. Hopefully you read the sarcasm in the post, as bankruptcy is something you want to avoid as a small business owner. However, one statistic to keep in mind is that 1 out of every 3 business bankruptcies is the result of employee theft. That means that 33% of businesses that go belly up do so thanks to their employees. A background check can expose prior theft or any other conduct that you do not want around your customers. When doing background checks, make sure that you keep employment law in mind. Which brings me to the next topic.
Understand Employment Law
As a small business, chances are you do not have a human resource department. In fact, you probably are the human resource department as well as the CEO and marketing department. Since you are taking on the responsibility, you need to make sure that you are aware of employment law, both federal and the state in which your business operates. Violating employment law can be as costly to you as hiring the wrong employee.
In 2014, the Equal Employment Opportunity Commission investigated 88,778 charges of workplace discrimination. That means that employers either didn’t know or understand workplace laws, or willing violated them. The result was $22.5 million in settlements with the EEOC. This figure is just settlements for penalties, not the amount won from civil lawsuits that followed. If anything, you need to make sure that your employees receive any benefits they are entitled to such as breaks, lunch, and minimum pay. You may think that you know everything about employment law from being a worker yourself, but the fact is there are a number of minor details that you need to follow when you employ someone at your business.
More Small Business Hiring Tips: Hiring Friends and Family
This is always a tough topic to take on and may be the most controversial of my hiring tips. If you are looking for a definite answer to hire friends and family or not, then you need to look for a different post. The ultimate decision to hire friends or family is up to you. However, there are a few benefits and negatives to keep in mind that you will hopefully help with your decision.
First, hiring friends and family takes a lot out of the background process. This does not mean that they are not going to steal from you or otherwise be bad employees, but you do know their background and hopefully their work ethic enough to hire them. Another benefit is the trust level that you will not have with a stranger. You can feel more relaxed with a friend working at your business than you can with someone you only know on paper.
However, there is a downside to hiring friends and family. It can be very difficult to manage them in a work environment. After all, they are family. This makes it tough as you may not always be as strict with them as you would another employee. This can cause your business not to be as productive as you want because you fail to make them work up to your expectations. In addition, you are less likely to fire them because you know them. If they turn out to be bad employees, chances are you are going to continue letting them be bad employees instead of doing something that could mess up Thanksgiving dinner.
This is one of our small business hiring tips that cannot be stressed enough. Keep records of everything. Make sure that you have all the necessary paperwork to comply with state and federal laws (tax paperwork, I9, etc.). In addition, document everything from pay increases, workplace injuries, call-offs, and everything else that you may need to refer to in the future. Make sure that you comply with all mandatory record keeping required by law and that you only keep records that are allowed by law.