Achieving success in a new business sometimes brings the pleasure of hiring new employees. Often though, the temptation is to skimp on creating a proper Human Resources (HR) structure and begin hiring, with the intent to double back later and fill in gaps. To avoid pitfalls that can later cripple an otherwise successful company, here are five things a new employer should think about when hiring.
Review the Position
First of all, make sure it is really necessary to hire the employee instead of meeting the business demands in an alternate way. For instance, could this task be more economically performed by a contractor? Is the task at hand a permanent one, or could a temp be used? Is technology available that would fill this need? Make sure the work cannot other wise be spread out more among existing staff.
Check the Paperwork
Once the decision to hire has been made, be smart and hire the best employees. Run background checks and investigate references. Background checks are easy to do online or by a third party, and can avoid a mountain of trouble later on. Ask the applicant to sign a form authorizing the background check and don’t consider anyone that refuses.
Create a Payment Plan
Establish and document an appropriate pay structure in order to avoid complaints and lawsuits down the road. The pay structure needn’t be elaborate, but it should clearly explain the rationale for paying one employee more than another. For example, employee A earns more than employee B because A has more experience, or supervises other employees.
Outline the Job
Clearly articulate what is expected of the employee. Job descriptions are good, but if these are not available, spell out in a written letter the exact nature of the job, where and when to report, working hours, and tasks to be performed, along with physical requirements of the job. Be sure hiring practices meet federal and state laws, such as the Americans with Disabilities Act (ADA). This is where talking to a good disability lawyer or labor attorney can be worth your time.
Talk About Termination
Think ahead to when the employee leaves or is terminated. Protect trade secrets in advance by executing a Nondisclosure Agreement (NDA) that includes confidentiality, and non-compete clauses.
Hiring employees can be a very rewarding experience if done right. Done incorrectly though, it can be a new company’s worst nightmare. Take the time to establish a few fundamental procedures that become an integral part of the hiring process and you’ll be glad you did.