Preparing to Hire Your First Employee
Hiring your first employee is a huge milestone for any business.
It means you’ve reached a point where you are shifting from ‘DIY mode’ to being able to share the workload and reach more of your goals. Yay for you! As a business owner, it’s a time of exciting possibilities and also, very possibly, a ton of overwhelm.
While an employee will ultimately bring new skills and bandwidth, there’s a lot that goes into getting ready before they even come on board.
Knowing where to start and what you need to do can make all the difference in the world.
Lighthouse Advisory recently went through the process of preparing for our first hire here in New Hampshire, and I want to share with you the steps I took and the insight I gained so it might make your process just a bit easier.
This resource is for educational purposes only. Make sure to be up-to-date on your specific state policies, procedures, and laws, as well as any changes to federal employment laws, before bringing a new hire on board. It’s important to set yourself up properly from the start. Now, on to the process!
Steps for a New Hire
Preparing Company Property
Company property can include things like computers, phones, software, and even basic office supplies that will be used by the employee but belong to the company. For Lighthouse Advisory, we focused on getting a new computer loaded with all relevant software and licenses for programs we use. This also included various laptop accessories and ensuring we secured the laptop to protect our clients. To hand it all off, I prepped an Acknowledgement of Receipt of Company Property our new hire will sign when they start.
Background Check Notice
In the hiring process, you'll probably want to run a background check on an applicant. A background check helps verify the applicant’s identity, work history, and education and can reveal any past criminal activities or traffic violations. If you choose to do a background check, the applicant will have to be notified of the areas you will be checking, and they will have to provide their consent.
Confidentiality Agreement
Confidentiality agreements are agreements that detail the conditions under which an employee can use the information they have access to during their time at your company. The contents of a confidentiality agreement will vary depending on your industry and how much sensitive information is within the work you do. However, some basic elements should be included in any confidentiality agreement:
A list of what types of information will be covered by the agreement (e.g., financial data; marketing plans; customer lists)
The duration of time during which this confidentiality applies (i.e., until either party terminates employment)
I9 and W4 for Taxes
You'll need to complete the I-9 form for each person you hire, and then have your new employee fill out a W-4 form. The W-4 is where an employee tells you how much tax to withhold from their paychecks. You can find instructions for completing both on the IRS website.
Notifying NH Employment Security Office
In New Hampshire, this step is 2-part. First, you set up an account with the NH Employment Security Office. Second, once the hire is made, you must report the hiring within 20 days. This will, of course, vary from state to state. Be sure to check with your state employment offices and local government to ensure you’re following the correct procedures for where you are.
Setting up Payroll
This is one of the most important parts to have set up smoothly from the start. After some research on different applications and software, I decided to use QuickBooks (QB), so the interface was easier with timesheet recording, running payroll, and integrating with other financial records. Once I had that selected, I had to figure out how everything works in QB, from setting up the pay periods to learning how to approve and actually run payroll. Quickbooks has its own requirements to keep you compliant with Federal, State, and local taxes, so I had to check back frequently to make sure there were no pop-ups requiring my attention.
Employee Handbook
An employee handbook is a guide for your employees on what is expected of them and what they can expect from you. It's a great resource for new hires and, in the future, can become an easy-to-find reference for existing employees. Employee Handbooks often include information about policies and procedures, company culture, employee benefits, and organizational structure.
New Hire First Day Checklist
Once you've found someone who seems like they'll be a great fit, you have to make sure all the paperwork is signed, and they are set up for their first day. To help me with this, I created a New Hire Checklist to make sure everything will be signed and handed over on our new employee’s first day!
As I mentioned, hiring your first employee is such an exciting time for a business and can be really overwhelming if you, the business owner, are also stepping into the role of HR, Payroll, and Manager. If you’re feeling a bit stressed, you’re not alone! I hope this checklist helps, and remember, once you find the right person to fill the role, the possibilities are endless!
PARTNERING WITH LIGHTHOUSE ADVISORY
If you need help determining if your business is financially ready to support a new hire, or could use some additional strategic guidance around hiring, take action now by scheduling your free consultation! Lighthouse Advisory supports clients across the USA of all shapes and sizes to achieve better profitability through a holistic approach to their business finances. We’d love to see if we’re the right fit for your business.
