Is your business now at the stage where you need to start hiring employees? If so, here are five crucial things you need to know.
1. You Need an EIN
First off, if you are hiring employees for the very first time, you need to obtain an Employer Identification Number. The nine-digit number is unique to your business. You can obtain it from the IRS. Basically, your EIN is used for reporting information about your employees to state agencies and reporting taxes to the IRS.
2. Providing Your Employees with Their W-2 Forms
The W2 Form is used to report wages, compensation, and taxes annually for each of your employees to the federal government. Copy A of the form needs to be sent to the Social Security Administration. And employers must send employees their W2 forms before January 31, for wages and taxes paid the previous year. The W2 Form is pretty simple to complete and there is HR software that can help you with the process. You will enter information that is already available in your payroll records and need some additional information like your State ID Number and EIN. Check out this insightful guide on how to complete a W2 to make sure you get it right. You will also need to complete Form W4, which is used for federal income tax withholding.
3. How Much to Pay?
Before you start hiring employees, you need to know how much you can afford to pay them. If you are working in an industry with clearly defined pay scales, then you should stick to those rates. Otherwise, the amount you pay needs to be calculated in relation to your other business finances. You also need to decide what benefits and insurance packages you want to provide. Hiring employees can be a lot more costly than you think, so make sure you work out the costs and create a budget before you start advertising for roles.
4. Defining the Position and Writing a Job Description
Once all of the background nuts and bolts of hiring someone are out of the way, you can focus on finding the right employees. Quite simply, to find the right workers, you need to clearly define what you are looking for.
Begin by clearly defining the available position and break it down into the tasks and duties the role involves. Next, make a list of the skills the ideal employee should have for your available position, and consider whether the applicant should have experience and/or qualifications. You also need to consider other attributes. For instance, if the role involves customer service, you will need to ensure the candidate is friendly, outgoing, and can handle angry customers in a calm manner. When you know precisely what you want out of your employee, you will be much better placed to find the right person. You will also better know what questions to focus on during the interview process. But before you get to that, you need to write a job description. Use all of the above information about the role to create a job description and do not forget to include a little about your company so you can ensure the right candidates apply.
5. Background Checks Are Crucial
You could find an applicant who seems to be the ideal person for your role after reviewing his or her resume and meeting the candidate in person at the interview. But unless you perform a background check, you cannot be sure that the person is right for the job. An effective background check is one of the most important steps when considering who to hire. You should check work references, educational credentials, and criminal history (learn more here). If you do not, you could regret it.