NCET Biz Tips: Starting Your Nevada Business: Part 10 – Hiring Your First Employee

Lindsay Bradley

Lindsay Bradley

Depending on the type of business you’re going to launch, you may be able to handle things on your own for a while, but the odds are you will need to hire an employee(s) at some point to help with day-to-day operations and service your customers.  

Before you bring on your first employee, it is important to consider three key factors:  

  • What can I afford to pay?

  • How will they know what I need them to do?

  • Where will I find candidates?

 1.       What can I afford to pay? 

The cost of an employee is more than just their hourly wage. You will want to consider the other expenses, such as payroll taxes. As an employer, you will have an obligation to pay your portion of payroll taxes, including Social Security and Medicare (FICA). In addition, you will also be subject to federal unemployment (FUTA) and state unemployment (SUTA) taxes. These payroll deductions need to be paid and filed in a timely manner to avoid hefty fines. A good rule of thumb to determine the average cost of an employee is to calculate between 1.25 and 1.4 times the employee’s base salary. For example, if you hire a position that pays $15.00 per hour ($31, 200 annually), you will want to budget approximately $39,000. While this formula will offer you a good baseline, it does not account for other factors, including internal recruiting costs, market conditions, or additional benefits you may decide to offer such as health insurance and paid time off.

 2.       How will they know what to do?

I cannot stress enough the importance of understanding the position you need to fill by creating a formal job description. This step is often skipped, and by the time you realize it, it will have already come back to bite you in the form of turnover and financial consequences. According to ContractRecruiter.com, the average cost of replacing an employee is between 16% and 20% of an employee’s salary, so you can’t afford not to be proactive with the hiring process.

A solid job description should include a minimum of the following: a brief summary of the role, a detailed outline of the essential job functions, a list of required and beneficial skills (certifications/technology), environmental factors (noise/temp), physical demands (lifting/standing/sitting), and FLSA status (salary vs. hourly). Not only will a job description come in handy when you start recruiting and interviewing, but it will also give you a basis for communicating what a good job looks like. Defining performance expectations upfront and complementing the process through regular check-ins for understanding and healthy, two-way feedback is the foundation for success and creating an environment of trust.

3.       Where will you find candidates?

Now that you have a job description put together and know what skills you need in your first employee, it’s time to start recruiting. Gone are the days of placing an ad in the newspaper and waiting for resumes to be mailed in. These days there are many great (and affordable!) ways to find candidates. Indeed.com has quickly become the go-to for job seekers, so this is a great place to start. They make it easy to post jobs, track candidates, and you can control your budget. Depending on the type of role you are trying to fill, other great ways to find candidates are local college job boards, Facebook (including your business page and local job seeker groups), and Linked In. These platforms all offer free options for posting jobs, and of course, word of mouth is always an option and a great way to recruit.

As the company owner, it is important to understand the huge commitment that comes with employing others. You must be willing to put in the time and effort to set yourself and your new employee(s) up for success. The benefit? You have the help you need; your employee(s) will feel empowered and supported, and your customers benefit from excellent service. Talk about a win-win-win.

Lindsay Bradley is Vice President of Administration at LeisureQuip, Inc. (www.leisurequipinc.com) and owner of Guided Arrows (www.guidedarrows.com). She is passionate about optimizing business operations, elevating organizational culture, and unleashing employees’ potential through human-centric strategies.

Please join us next month as we discuss how to open new accounts with suppliers and vendors.

NCET is a member-supported nonprofit organization that helps people explore business and technology. (www.NCET.org)

Dave Archer