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Hiring New Employees: A Comprehensive Business Guide

Hiring New Employees

Is your business growing and expanding? Then you know hiring new employees is a must. Adding more employees is a significant milestone for your company.

Unfortunately, most small business owners don’t know how to hire employees. Sometimes, the hiring process can be pretty hectic, especially if you’re not experienced.

Before starting the hiring process, you need to consider essential things, such as whether to recruit yourself or outsource the job. You also need to consider the type of employee you need, their job description, and how to find the right candidate.

If you choose to take the responsibility of hiring the new employee, read on below for tips to help you know the right steps to take before, during, and after the hiring process.

What to Do Before Hiring New Employees

Before hiring an employee into your company, there are important steps you should consider. These steps will help you prepare your office for a new hire:

Ensure Your Business Have an Employee Identification Number (EIN)

Before bringing in new employees, you must register your business with the relevant state and federal authorities. Today, the Internal Revenue Service requires that every business with employees have an Employee Identification Number.

An EIN is a nine-digit number unique to each employee used for tax identification purposes. It’s similar to a Social Security Number (SSN), but it’s only for businesses. If your business entity is a partnership or corporation, confirm if you already have an EIN. However, if you don’t have it, you can apply for one online.

When considering getting an Employee Identification Number, remember that each state has its own application and registration process. Therefore, ensure you contact your state’s labor department or check out their website for up-to-date information. Most states offer the service online, making it easier for businesses to get the EIN within minutes.

Set-Up Documents for Withholding Taxes

If you are looking to employ your first employees, it’s essential to consider withholding taxes. After filling in the right documents, businesses should keep employee’s tax records for six years and more based on the state’s recommendation.

Keeping employee tax records will help your workers support their tax filings. To do this, you can invest in an excellent system to help you keep organized files and track your business’s health with time. A good system will also help you prepare business and employee tax records, keep critical financial statements and track your deductibles.

Before you start conducting interviews or hiring an employee, it’s essential to fill out the proper documents for withholding taxes. Below are the three types of withholding taxes you should take into account:

Federal Income Tax Withholding

Every new employee is required to complete the Employee’s Withholding Certificate or W-4 Form. This form helps the IRS know how much federal income tax an employer withholds from the employee’s pay. After the employee fills the W-4 Form, you will submit it to the IRS.

Federal Wage and Tax Statement

For every employee you hire, you are responsible for filing their Form W-2—this form details employee’s annual withheld taxes and earnings for the year. After filling out the form, you should share a copy with your employee before January 31st, with details of the previous year.

Additionally, you should also send Copy A of the W-2 forms to the Social Security Administration before the last day of February the same year. However, if you are hiring an independent contractor, you should file Form 99-MISC.

State Taxes

Numerous states also require businesses to file state withholding taxes forms. Before getting a new employee, it’s essential to consider your state’s withholding taxes. Check out your state’s requirements and fill out the appropriate forms.

Define the New Employee’s Role and Job Description

Do you know why you are looking for an employee? If you don’t know why you’re hiring, how will you find the right employee to fill in the position? Before starting the employment hiring process, it’s important to figure out the kind of work you need the new hires to do.

What support do you need in your business? Write down a list of what you need to be done and the most urgent and essential tasks you need help with.

Do you require a new employee to help you with email marketing, cake baking, inventory management, or SEO marketing? Then, consider the responsibilities you’d like this individual to take over while in this position.

Before deciding the pay for the job, ensure you consider the amount and kind of work they will be doing. The salary will also depend on your budget and the position’s seniority and rank.

Next, determine the type of skills and educational background that would serve the position best. You should also consider the level of experience needed to handle the role effectively.

Additionally, you can also use a hiring tool to help you through this process. Sites such as help employers find the right candidate, making the hiring process easier.

What to Do During the Hiring Process

Once you complete all the pre-hiring legwork, it’s time to start looking for the right candidate. Use your job description and the roles of the new employee to look for a fit candidate.

Below are essential steps you should take during the hiring process:

Find the Right Candidates

Talk to your current employees and share with them your wish to hire a new employee. Tell them about the position and ask for their input on the right candidate for the role. You never know; they might know someone.

Direct recommendations will save time and money that would otherwise go to marketing and advertising for the position. When your employees vouch for a candidate, it will save you time, and stress sorting through batches of resumes and cover letters.

However, a downside of relying too much on employee recommendations is that your workplace may be less diverse. That’s because most individuals often associate with others like them. However, diversity is more than just a political movement.

Research has shown that racially diverse workforces outperform non-diverse teams by 35%. This statistic clearly indicates that the more diverse a workforce is, the better for your business. If you’re looking for diversity, ensure you cast a bigger net to find the right candidates.

You can do this by posting a job advert on job sites such as Craigslist, Linked In, and Indeed. On your advert, ensure you also include an announcement that identifies your company as an Equal-Opportunity-Employer. In the statement, ensure you encourage every qualified candidate to apply.

The candidates could be of any gender, race, ethnicity, sexual orientation, and religion. You can also encourage people with disabilities to also apply for the position.

To promote a diverse workplace, you should consider blind recruiting. This is where you hide applicant’s names and even the schools they attended to avoid unconscious bias.

Start Conducting Interviews

After choosing a list of qualified candidates, it’s time to conduct interviews. You should consider recruiting a team of employees to join the interviewing panel. This will give you a more balanced and fair assessment of the candidates because everyone will approach the candidate with different questions and goals.

If your business is bigger, determine if having an interview panel of specialists is the best option.  In the panel, every interviewer will focus on specific areas during the interview. While one interviewer is looking for technical skills, the other could focus on teamwork.

This is a great approach to interviewing. That’s because your team will feel like a part of the process, and you will get a balanced assessment of every candidate’s skills.

Once you know who will be conducting the interviews, it’s time to consider the right questions to ask. Ask every member of the panel to write down their questions and go through them. Ensure the questions help you understand the candidates’ educational background, work history, and technical skills.

You will also want to understand how the candidate interacts with people and their teamwork skills. You can ask them questions such as “How will you approach a problem A, B, or C?” Or “How well do you perform under pressure?”

Conduct a Background Check

After the interview, ensure you choose the most qualified candidate based on your standards. After settling for a candidate and giving them an offer, you should run a background check on them. A background check is considered a pre-employment screening to help you keep your company, clients, and employees safe.

Conducting a background check is also a great way to get to know more about the employee. It’s also the only way to know if they were honest about who they say they are. Applicants should understand that your company will be running background checks on them once selected.

However, before digging into the new employee’s history, ensure you check your state’s restrictions on background checks. Different states have different qualifications and restrictions, especially when employers are looking for an employee’s criminal records.

If you don’t know much about these requirements, it’s advisable to use a third party to conduct employee background checks. They will be better positioned to do a better job while remaining within the state’s rules and regulations.

Ensure Your Employees Are Eligible For Employment in the U.S.

As an employer, you are responsible for ensuring you hire individuals who the government legally permits to hold employment status in the U.S. Hiring individuals who aren’t eligible to work in the U.S. could lead to criminal penalties and fines.  

To avoid hiring people who aren’t eligible for employment, ensure you take the below steps:

Get Employees to Fill Form I-9

Before your new employee starts working with you, ensure that they fill out section one of the Form I-9. This will give you information about their employment eligibility status. That’s because they need to fill in their Social Security Number and contact information.

Ask for Proof of ID

Before the end of the week, ensure that the new employee shares proof of their ID with human resources. You should also make sure the documentation, such as employment authorization and ID, is valid. The ID document can be from List A, a Permanent Resident Card, or a U.S. Passport.

The documents could also be from List B, which is the U.S. driver’s license. Additionally, you should also ask for a List C document, which is their Social Security Card.

Keep Form I-9 Safe

After your employee fills Form I-9, you don’t need to send it to the federal government. Instead, you should keep it in a safe place for three years from the date of the hire.

You should also keep it for one year if the employee stops working for you before the three years are over.

What to Do After Hiring New Employees

The hiring process can be quite daunting if you’re not a professional. However, once the new employee has reported working, the difficult job is behind you. Below are two last things you should do after hiring a new employee:

Report To The State’s Employment Agency

Any rehired and newly hired employees should be reported to the state’s employment or labor agency. But different states have different requirements and steps for employers to follow. Ensure you check with your state’s labor agency for the proper steps to follow when reporting your new employees.

Get Workers’ Compensation Insurance

Employers need to purchase workers’ compensation insurance for their employees. This insurance helps your employees cover medical bills and compensation for losses associated with workplace injuries or illnesses caused by chemical exposure.

Before purchasing a policy, ensure you check out your state’s workers’ compensation requirements and find the best policy that suits your employees. You can also check out the National Federation of Independent Businesses (NFIB) for helpful information on workers’ compensation insurance.

Are You Ready to Hire New Employees?

Hiring new employees is not an easy process. You need to consider the new employee’s roles and duties, job description, and qualifying requirements.

You will also need to determine their pay, advertise the position and find the right candidate based on your business needs. Thankfully, with the above guide, the hiring process will be easier for you.

Did you enjoy the article? Check out other posts on our site for more informative tips. 

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