When you’re ready to expand your team, you’ll need to get everything in place to hire employees legally, create a job description, and find qualified candidates.

You’ll also need to provide a job offer, run a background check, check employment eligibility, and onboard new employees. That’s a lot to accomplish when you’re still a one-person business.

We talked to Brianna Rooney, the CEO of TalentPerch, to understand how she helps businesses hire employees with her recruiting agency. Today, TalentPerch makes more than $2.9M in annual revenue.

Brianna explained the strategies and best hiring practices she uses, and we’re passing them on to you. You can either keep reading or click on any of the links below to jump to the section that interests you:

What Do I Need to Hire Employees?

You’ll need at least the following before you hire your first employees:

• Employer identification number (EIN)
• Department of Labor (DOL) workplace posters
• Tax withholding capabilities
• Workers’ compensation insurance
• Payroll software

Employer Identification Number

You’ll need an EIN if you don’t already have one. You’ll use this number to pay income taxes and employees’ Social Security.

Apply for your EIN on the Internal Revenue Service (IRS) website during normal business hours.

Get Department of Labor Workplace Posters

Employers are required to display workplace posters at every location. Use the FirstStep Poster Advisor to find which posters you need before you hire workers.

Tax Withholding Capabilities

You’ll need to set up the ability to collect employee tax information, file employees taxes, and document that you’ve met the following tax requirements:

• Federal income tax withholding: Every new employee needs to complete a W-4 (Employee’s Withholding Certificate) to let you know how much federal income tax to withhold from their paychecks. You’ll need to submit the form to the IRS and store it in a secure location for at least six years.
• Federal wage and tax statement: You have to provide every employee with a W-2 each year to document their earnings, taxes withheld, and other deductions. The employee must receive the form before January 31st to document the previous year’s earnings. The Social Security Administration also needs Copy A of the W-2 before February ends. Learn more about how to handle W-2s.
• State taxes: Check with your state for additional filing requirements.

You’ll need to set up a system to manage all this, store the documentation securely, and access it during tax time. You can either manage it yourself or work with a professional to keep your employment tax records.

Purchase Workers’ Compensation Insurance

You’ll definitely need workers’ compensation before you hire new employees. This protects you if they get hurt on the job. Check with your business insurance provider; they should offer workers’ compensation.

If you don’t have business insurance yet, get a quote from Simply Business.

Implement a Payroll System

Hiring your first employee means that you’ll need a payroll service. Many systems offer more than just payroll.

Choose a payroll system that supports the entire interview and onboarding process. Some platforms document reviews and help with new hire paperwork. You can learn more about payroll providers in our blog about the 15 best HR companies.

Case Study: Brianna Rooney

Brianna Rooney was a rockstar recruiter working for someone else. The company did something she didn’t like, so she quit. She celebrated over the weekend.

Then her stepfather asked her an important question:

The answer was NOTHING.

Brianna took her credit card, created an LLC, and bought all the software she was using at her previous work. From there, she created a database of skilled workers, then started looking for clients.

She grew her first business and sold it to a tech company to become their human resources department. Then she started TalentPerch. Today, it’s making more than $240K each month.

We’ve talked to her about how to start a recruiting agency, but the advice she provides applies to any business that’s hiring employees. Check out our interview with her below:

Want to Learn How to Find the Best Employees?

Brianna’s recruiting course shares:

• The tools to find and close qualified candidate
• How to evaluate candidates
• How to approach ideal employees
• How to offer an employment opportunity
• How to sweeten the deal (Without committing to paying more money for all eternity)

Master the art of hiring by signing up for her recruiting course in the UpFlip Academy.

The Hiring Process: How to Hire Employees

You’ll want to follow the hiring process below once you decide it’s time to hire employees:

1. Create a job description.
2. Find qualified candidates.
3. Conduct interviews.
4. Choose the best candidate.
5. Provide a job offer.
6. Run a background check.
7. Check employment eligibility
8. Report all new hires to the state employment agency.
9. Onboard new employees.

It’s best to work with a human resources professional as you learn the hiring process. There are many laws and regulations, and violations can result in fines, lawsuits, and other issues.

Step #1. Create a Job Description

The first step of the hiring process is to create a job description. First, you’ll want to figure out what type of employees you need and the job requirements for each role.

How to Establish the Type of Position

There are six main ways you can hire people to complete jobs:

• Full-time employees: These employees are on payroll and work more than 30 hours per week. You’ll have to contribute toward payroll taxes and any benefits.
• Part-time employees: This includes employees who are on payroll but work less than 30 hours per week. They don’t normally qualify for benefits.
• Temporary or seasonal employees: Temporary employees are only on payroll for a set period of time. They’re good for filling short-term needs, but you need to be aware of the minimum employment durations for unemployment and other benefits.
• Independent contractors: Freelancers and contractors aren’t on your payroll. Be careful during the hiring process because you can face big fines, back pay of overtime, and other consequences if you misclassify an employee as an independent contractor.
• Interns: Interns are students who work to gain experience on the job. They normally qualify for lower pay rates. In some situations, you can have unpaid internships, but don’t push your luck.

You might also want to consider if you need on-site employees or if the candidates can work remotely. You’ll have more options for candidates with remote work, but that also comes with new challenges.

Make sure to consult with an employment law specialist before trying unique hiring strategies.

How to Identify What Roles You Need Filled

Next, think about what the employee will do each day. Think about what knowledge and skills you need to run your business. Who will supervise them once they start work?

It’s also important to define any physical requirements employees will need to do the job well.

How to Create a Job Description

You’ll need to create a job description to share with potential candidates. Make sure to include the following:

• Information about your company
• The official job title and salary
• Job responsibilities and core skills
• Essential and preferred qualifications
• Performance metrics
• Location

Build your post based on search engine optimization best practices. This will help your job descriptions reach a larger audience. If you don’t fill in things like the salary when you write a job description, some job boards will automatically fill in an estimated range for you.

Remember to be transparent. You don’t want to waste your time or anyone else’s.

Keep in mind that employees want to work from home at a rate that’s three times higher than business owners want to allow. When you can, let them work from home.

Step #2. Find Qualified Candidates

When thinking about how to hire employees, pay close attention to where you’re looking. Some of the most popular ways of finding new employees include:

• New hire referral programs
• Social media
• Job sites
• Recruiters

Brianna explained that she likes to have a list of potential employees ready to go by using LinkedIn Recruiter. She creates her own private database so that she can go right to her list when a job posting appears.

Try Referral Programs

When hiring for a small business, many employers start by asking employees for referrals. In fact, when an employee refers new hires, the candidates are:

• Four times more likely to be offered the job
• Five percent more likely to accept the job offer
• Nearly twice as likely to stay for over four years

Best of all, the hiring costs are normally $1,000 less than other recruitment methods. However, this strategy creates high retention, but referral programs often hinder diversity efforts.

Offering a $400 bonus to an employee who refers a new hire can go a long way. You give half upon employee onboarding and the other half after the probationary period. Alumni programs also work well.

Post on Social Media

Hiring remote employees is easy on social media. Just ask your employees where they spend time online and post there.

TikTok is one platform that doesn’t have a ton of competition looking for new hires. Your marketing team will also love the opportunity to post jobs because it’s something different. Check out Chili Piper’s TikTok videos for inspiration.

It doesn’t cost anything except time to create videos for job postings. Ask employees to share your posts too.

Post on Job Boards

Job boards like Indeed and state employment agencies are great places to seek job applications. These platforms can also help you with other tasks while hiring a new employee.

For instance, Indeed’s skill tests are written by industry professionals. They get a team of people who have managerial experience or three years of field experience to write the questions and then have other professionals review them.

They even have people without experience in the industry take the tests to get a baseline of what the score will be when someone guesses. I’ve participated in all the different roles used to develop surveys because of my diverse job history and educational background. These surveys really will help you find the most qualified individuals.

Work With Recruiters

Collaborating with recruiting staff can be challenging, but recruiters know how to hire employees for a small business. They do it every day. Brianna told us:

Recruiters are normally for higher-paying jobs, but if they operate as a staffing agency, they may handle other roles like:

• Performing a background check
• Reporting to each state’s labor department
• Withholding taxes

Don’t write this option off just because it’s more expensive to hire qualified candidates.

Step #3. Conduct Interviews

As a small business owner, you’ll probably perform the steps in the hiring process on your own until you grow enough to need a hiring manager. Since you’ll be conducting interviews, you need to know how to hire an employee without breaking labor laws.

Someone should be available to greet each job candidate at the beginning of the interview. It will lighten the mood and help the interviewer get a better feel for whether the potential employee is a good fit for the company.

Make sure to note when each person arrives. That will tell you whether they tend to be late or early.

During the interview, questions that get a job candidate to tell a story are more insightful than yes-or-no answers. Open-ended questions allow candidates to share their values, beliefs, communication styles, and more.

Sometimes, they’ll even provide information that immediately disqualifies them as a candidate. Jessica Miller-Merrell, the founder of the HR company Workology, told us:

Check out our interview with her below:

Avoid Questions That Get Sent to the Labor Board

Have you heard the term equal opportunity employer?

It means you don’t discriminate “because of race, color, religion, sex (including pregnancy, gender identity, and sexual orientation), national origin, age (40 or older), disability or genetic information” when you hire.

New employee questions should avoid asking about:

• Race
• Age
• Marital status
• Sexual orientation
• Transportation (except for a reliable way to get to work)
• Health conditions

Thoroughly read the Equal Employment Opportunity Commission’s prohibited practices before interviewing people so that your first hire doesn’t turn into a lawsuit.

Step #4. Choose the Best Candidate

You’re unlikely to find the perfect new hires. You’ll either have no candidates that meet your exact expectations or multiple that seem equally good. In these scenarios ask yourself:

• Who has the most relevant experience?
• Who can bring more value to the team and company?
• Which person seems to be the best cultural fit?

Some companies have potential employees do a ride along to get a feel for what a day in the company will be like. This gives you and your hiring managers eight hours to get to know the potential new employee.

Step #5. Provide a Job Offer

When you are ready to make a job offer to the most qualified candidates, it’s normally best to do it in writing. You’ll want to include:

• Job title: This should match the job title on your hiring advertisements.
• Start date: The first day of work is when the employee starts the job.
• Pay: Specify the amount and pay frequency. Make sure you’re paying employees over minimum wage.
• Type of employment: Specify whether the offer is hourly, full-time, part-time, or contract.
• Benefits: List any additional employee benefits like paid time off, health insurance, etc.
• Intellectual property (IP) guidelines: Specify how intellectual property is used. Who owns it, and how can previous IP be used in the company services? This part mostly applies to tech-related jobs.
• Non-disclosure agreement (if applicable): Use a form to prevent employees from sharing insider information. Disclosing this information could be a violation of security laws. It also can harm the company. Asking employees to sign one of these is a fairly standard practice.

Brianna told us:

She also explains that about 42% of people will attempt to negotiate an offer. That means you need to be prepared to negotiate if you want to get the employee. In that scenario, you need to understand why they aren’t accepting your initial offer.

It could be money, perks, or competing offers. Make sure you understand competitive pay data and job posting information to evaluate whether you want to hire employees quickly or go back to the recruiting process.

Step #6. Run a Background Check

Many jobs will require a background check. Consider whether customers or regulators will want background checks. Use a professional service to perform the appropriate checks for your customers and industries.

Step #7. Check Employment Eligibility

You need to check employment authorization to avoid fines or criminal charges. There are two ways to check whether a person can legally work in the United States:

• I-9 form: Submit an I-9 form to the federal government to prove employment eligibility.
• E-Verify system: Verify employee eligibility in the U.S. without any paper by using the E-Verify system.

Both systems will require providing either:

• Proof of passport
• Driver’s license and Social Security card

You’ll need to keep photocopies of the documents for a minimum of three years or a year after employment ends, whichever is longer.

Step #8. Report All New Hires to Your State Employment Agency

States require business owners to report when they fill job openings. Check the Department of Labor’s state law resources to learn more about how to do this in your state.

Step #9. Onboard New Employees

At this point, you’ll want to provide each new employee with these documents:

• Employee handbook: An employee handbook provides guidance on internal policies the employee needs to know.
• Tax forms: Employees fill out a W-4 form to specify how you should withhold taxes. Form W-9 is for tax purposes for independent contractors. These are necessary to calculate payroll taxes and income tax and send employment taxes to the federal government.
• Direct deposit form: You need this to pay employees electronically.
• Benefit forms: These are necessary to provide employees with company benefits like insurance.

Besides providing all the necessary documents, employees may need hands-on training or physical tools. Some companies offer a shadow program where new hires work with experienced employees for on-the-job training.

You’ll also need to ensure that employees have access to any internal systems.

How to Hire Remote Employees and Maintain Engagement

Hiring remote employees is a great way to expand your company’s talent pool, but these employees have their own unique needs and challenges. Before hiring work-from-home staff, remember to check if there are any special state laws or tax implications for your area.

You’ll need more technology to support these employees. Make sure to provide cybersecurity training to help remote employees recognize online risks.

Most remote personnel rely on Google Meets or Zoom to coordinate with other team members. Offering real-time chat is also helpful. Given that employees can’t just walk over and seek help from others, the team needs to be accessible through different methods.

Building a workplace culture is more difficult with remote employees. Encourage people to get to know each other.

Closing

Hiring your first employee can be intimidating, but using the strategies in this guide and Brianna’s course in UpFlip Academy, you’ll be prepared to navigate the world of human resources.

Have you hired employees before? What did you find to be the most challenging?