by Matthew Brooks

Created on: December 28, 2010   Last Updated: December 31, 2010

How to hire your first employee as an Entrepreneur

For many entrepreneurs, starting their own company means living close to the bone early on and doing all the work themselves in the beginning stages of their new company just to help them breakeven. The reason many people do this is to save money on additional personal costs, and sometimes they feel that they can't trust anyone but themselves to do it. As with anything when their hard work starts to pay off, their company grows. As a result, a decision has to be made by the entrepreneur to either hire additional help so the company can continue to grow due to the increase workloads or not to hire someone and see the growth of the company plateau or even decline.

Some of the “do’s and don'ts" on the hiring process so that any legal or ethical dilemmas arise. When the decision is made to hire additional help to run the company, the entrepreneur runs into a new myriad of legal red tape and ethical issues to deal with. Some of these issues included are the legal responsibilities, an average costs to hire of $4,000 per new employee, detailed paper work, and of course, the liabilities that come with hiring a new employee. All these factors must be taken into account because on top of the upfront issues with hiring someone comes the issues of having someone work for you like theft, absenteeism, workplace violence, additional health and tax costs that can all affect the company's reputation and its operations.

To help mitigate theses issues when having someone work for you, it's best to be very meticulous in the hiring process so that you know who you are hiring. Some of the steps mentioned in the article that can help the entrepreneur in the hiring process are doing background checks, drug tests, requiring them to list personal and professional references, and completing a personality assessment. Doing these types of things do require a delicate finesse so no ethical or legal lines are crossed. It is important that when doing these things you make the prospective employees aware of what you will be doing and why and then get permission from them. It is also important to not ask any types of questions that would violate the person's federal and civil rights. Some of the questions not to ask are their age, sexual orientation, marital status, religion, or race. Pushing the ethical line and asking or even implying any of these questions can infringe on their legal rights setting you up for trouble.

Once the hiring process is over, there are a few things that have to be done before the new employee even starts to work. One factor to consider is their work status; are they full time, part time, or temporary? Documents need to be kept on file that meet the US Department of Labor's criteria. Hiring someone can be a challenging process, so entrepreneurs need to know when to hire and how to hire the right person.

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