How do I take on an employee?

Image source: AdobeStock

Image source: AdobeStock

There will come a time, as your business grows, when you are no longer able or willing to handle everything on your own. Hiring your first employee is a BIG STEP that comes with many responsibilities (some of which you may not even be aware). You will undoubtedly have more questions than answers:

  1. Is this the right time?
  2. How do I actually do it? 
  3. Are there any legal hurdles I have to overcome? 
  4. Does hiring a new employee right now even make sense?

These are all good questions, and you need to ask them to yourself before placing the WANTED ad. Below, you’ll find some tips on deciding the right time, and how to go through the process of employing. We’ve split this into two blog posts, so after reading this, make sure you look out for the next blog to learn more!


Do I need an employee?

Firstly, do you even need an employee? For many small businesses hiring a first employee is an essential step to business growth. But how do you know when it’s time?

There are two big red flags that pop up when it’s time for you to take the plunge:

  1. You’re losing business because you can’t keep up with demand
  2. You need/want to focus on certain aspects of your business rather than struggling to juggle everything

Those critical red flags may not be easy to spot because as a small business owner you’re used to having a heavy workload and carrying everything on your shoulders. That’s why it’s essential you step back and examine your business from a neutral perspective.


The Cost (Versus Reward)

The cost of an employee goes far beyond their salary. I recommend completing a detailed cost versus reward analysis before you hire your first employee. 

Step one is to write a job description because it will help you estimate the cost of all aspects of the job both tangible (new equipment, facility upgrades) and intangible (insurance, extra expenses associated with payroll and taxes).

Writing a detailed job description also clarifies in your mind the scope of the job and your expectations of the employee. It should include all legal aspects associated with the job such as remuneration, leave entitlements, probationary periods, etc. It’s also an important document to have in hand at job interviews and upon the appointment of a new employee.

Once you have estimated the cost, now it’s time to calculate the reward. Your new employee can generate efficiencies in the following ways:

  • Increased productivity - completion of more work in the same amount of time
  • Increased capacity - more customer orders, etc
  • Increased customer’s perceived value of your services

 You shouldn’t underestimate the value of lightening your own load.

Stay tuned for our next blog, where we’ll talk about the hiring process, and how taking on your first employee will alter your workplace. We’ll also cover your legal obligations as an employer.


With you in every success,

Athol Bailey


Business Strategies for Tradesmen, Ph:0418 177 947

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