Checklist for How to Hire Your First Employee

January 29, 2012, by HR à la carte | Recruitment

The good news is your business is booming.  The bad news is you can’t keep up.  Thinking about hiring your first employee is exciting.  All the hard work has paid off and you find yourself in the position of having too much work to take on.  You need help. 

There are several questions you should ask yourself before taking the plunge and hiring that first employee:

• Is there any way you can continue to do the work yourself, by potentially finding ways to work smarter versus harder? 
• Are there inefficiencies in your current systems and processes that could be tweaked and thereby free you up to take on the extra work?
• Does the work add value to your company and your bottom line? 
• Do you have the budget and/or cash flow to afford to hire additional help?

If the answers to the questions above still point you towards hiring help, use the following checklist to navigate your way through hiring your first great employee.

1.  Determine what kind of help you require.

Do you need occasional help in the form of a casual contract arrangement, or do you need a set number of hours, be they part-time or full-time?  Either the workload, your budget or both will determine the answers to those questions.

2.  Things to set up before you hire.

• Set up payroll:  you need to register with the Canada Revenue Agency to obtain a Payroll Deduction Account at  http://www.cra-arc.gc.ca/tx/bsnss/sm/menu-eng.html
• Determine your payroll responsibilities:   http://www.cra-arc.gc.ca/tx/bsnss/tpcs/pyrll/menu-eng.html
• Refer to your province’s Employment Standards  to determine wage payment guidelines, vacation pay rules, and guidelines for work hours, breaks and overtime pay.
• Register for Workers’ Compensation coverage, if applicable.

 3.   Write a job description.

One of the keys to effective hiring is to determine up front the objective and purpose of the job, the tasks associated with the role, along with the skills required to do the job.  Without this, the recruiting process is similar to looking for a needle in a haystack; particularly as you haven’t defined the size, shape or use of the needle let alone what haystack in which to go looking!

4.  Determine the salary range for the position.

Many hiring managers wait until the offer stage to figure this out.  However, it’s important to know right from the start what the market pays for the skill set you need to hire.  This ensures you are not wasting time on candidates that will in the end turn down a job offer that may be beneath their salary expectations.  Resources such as Payscale.com, Monster.ca, your business networks and professional associations are helpful in determining an appropriate salary range.

5.  Post the job where your target candidates will find it.

There are many options for sourcing candidates, including:

• Advertising on your company website
• Newspaper advertising
• Professional associations
• Outplacement services
• Colleges & universities
• Recruitment agencies
• Local technical schools
• Job boards such as Monster.ca and Workopolis.ca
• Your own professional and personal networks

6.  Use the same interview questions for each candidate.

The aim of an interview is to collect enough data to be able to make an objective decision.  In order to compare candidates, you need to ask the same questions of each candidate.  Ensure the questions are based on bona fide job requirements and avoid questions that only illicit yes/no answers.

7.  Always check references before making an offer.

Ensure you get the candidate’s written permission before doing so, and ensure the references provided are professional references, e.g. former supervisors or co-workers.

8.  Ensure the offer is in writing.

You are offering the candidate an employment contract, so be sure to have a contract for them to review and sign.  If there was a negotiation in the process of making the offer, ensure that the results of the negotiation are captured in the offer letter.

9.  Follow the payroll process

• Register and maintain a Payroll Deduction Account
• Ask the employee for his/her social insurance number (SIN)
• Have the employee complete a TD1 Form: Personal Tax Credits Return
• Calculate and deduct Canada Pension Plan (CPP) contributions, Employment Insurance (EI) premiums and income tax, and keep deducted amounts in a separate bank account.
• Remit payroll deductions with your share of CPP and EI
• Report employee deductions on a T4 or T4A slip by the end of February each year
• Complete a Record of Employment (ROE) upon employee departure
• Keep all records in an employee file

10.  Tips for retaining your new employee

• Have a 30/60/90 day plan for your new hire
• Set goals that are aligned to your business strategy
• Ongoing coaching
• Get to know your employee, not just in a work context
• Celebrate successes, even if you are a team of just two!
• Professional Development opportunities – find out what your employee is interested in learning to further his/her skills and see if there are ways of making this happen within the context of your business, whether  it’s via attending seminars, learning new skills on the job, etc.

Congratulations on growing your business and hiring your first employee!