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How to Hire Employees: The 12 Components to a Good Hire

Leading your business is easy . . . until people get involved. They’re your greatest asset and greatest challenge. That’s why investing the time and energy to hire well is so important—and so freaking hard! But here’s the thing: Just like the Kentucky Derby, you can’t win in business with a team of donkeys—you need thoroughbreds.

Look, we’ve all been tempted to cut corners here. The pressure is real trying to figure out how to hire employees for your small business. Maybe you’ve even used the mirror system (if the candidate can fog up a mirror, they’re hired). But the only way to build a strong teamwith high morale and low turnoveris to take more time. Learn how to hire employees the thoroughbred way, following the components listed below, and you’ll be set for business success.

Related article: America's Labor Shortage

12 Components to a Good Hire

  1. Pray.
  2. Get referrals.
  3. Do a 30-minute drive-by interview.
  4. Check the resumés and references.
  5. Use testing tools.
  6. Ask yourself, do you like them?
  7. Look for passion. (Do they light up?)
  8. Review their personal budget.
  9. Discuss compensation.
  10. Create a Key Results Area (KRA).
  11. Go on a spousal dinner.
  12. Implement a 90-day probation.

Why Time Is Powerful When You Hire

Before you explore the details of the 12 Components to a Good Hire, it’s worth repeating: Take. More. Time. Here’s why:

You’ll also want to take plenty of time to create the job posting for your open position. A well-crafted description will attract the personality, skills and character traits you want. Give enough detail to help candidates rule you out if you’re not a fit for them. Check out this example post for a copy editor position that’s clear on what the company wants and doesn’t want:

Attention, grammar geeks! We’re looking for a highly skilled, detail-obsessed, professional copy editor with a great attitude and high work ethic. We want someone who has at least three years of experience in professional copy editing (i.e., not just editing your college roommate’s papers). We’re not looking for a writer who can edit. We’re looking for a copy editor who loves to edit copy—period. Is that you?

Free KRA (Key Results Area) Template

Want an easy way to create KRAs for your team members? Grab our free template, plus get a couple examples of completed KRAs for reference!

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The Nitty-Gritty: 12 Components of a Good Hire

Once you’re clear on what you’re looking for and have an awesome job description, you’re ready to build out your hiring process. These 12 steps will help you keep out the donkeys and bring in the thoroughbreds.

1. Pray.

Ask God to send the team members you need to do the work He’s given you to do and keep out the crazy. If that’s not your thing, at least take some time to nail down the type of person you want (and don’t want) to work with every day. Reflection brings clarity.

2. Get referrals.

Thoroughbreds run with thoroughbreds, so ask your team members to refer people from their circle who they’d want to work with. If their referral is hired and completes the 90-day probation period, give the referring team member a cash bounty—and hand it out in front of the whole team. Nothing like a little cash to inspire great leads!

3. Do a 30-minute drive-by interview.

Never—never—hire someone after just one interview. Start with a 30-minute “get to know you” conversation where they do most of the talking while you ask questions and listen. And be sure not to go over the 30 minutes. You’ll be amazed at what you learn in that call, and you’ll be clear on whether to set up a second interview.

4. Check the resumés and references.

A resumé gives you an overview of the candidate’s formal training, skills and certifications. Use it as a conversation starter, but don’t lean on it (or on their references) too much. People can say anything. Occasionally when you check a reference, you’ll find a candidate didn’t tell them to expect a call or email. The candidate may even include someone who doesn’t have nice things to say. These are often signals to run in the opposite direction.

5. Use testing tools.

You need enough relational intelligence to know who to bring on, but the right tools can also help you figure out if someone would be a good fit in the role. You might give assignments in writing, copy editing, presenting, or web development, with hard deadlines, to test the chops of candidates whose roles require those skills.Another fit indicator is the DISC personality assessment. It’ll give you a quick look at how the candidate’s personality fits the team and the work you need done. For example, if you need someone great at crunching numbers, you should see high scores in organization and details on their assessment.


6. Ask yourself, do you like them?

Hire people you like. It’s that simple. You run a small business and probably spend a lot of time with your team, so relationships matter. Skills alone aren’t enough.  If someone’s good at the task but they’re a jerk or have a vastly different value system, you won’t like working with them (and they won’t like working with you either).

7. Look for passion. (Do they light up?)

Look for passion when they talk about the position and your company’s mission. Lack of passion is the easiest way to spot someone just looking for a J-O-B. If all they want is a paycheck, you’ll never keep them happy. You want employees who are excited about what they’re doing—construction workers who want to build homes for families to make memories in, writers who want to inspire hope, web developers who want to create an easier experience for customers. Look for fired-up people who love their work and own the why behind it.

8. Review their personal budget.

Can the candidate afford to live on the salary you provide? If not, sooner or later, they’ll blame you for “not paying enough” even though they accepted your offer and should know what they can and can’t live on. When people are worried about their bills, they’re distracted and can’t give their best. So serve your top candidates—before they join you—by making sure they can care for their family and meet their obligations with what you pay.

9. Discuss compensation.

It makes sense for people to want to know what the compensation package is, so share it with them a few steps into the hiring process. But if their first question is about what you’re going to do for them, they’ll leave you for 10 cents more an hour. They’re takers, not givers. You want people excited to add to your organization. If they’re preoccupied by the benefits, don’t hire them.

10. Create a Key Results Area (KRA).

This is a job description that shows what winning looks like in the role you’re filling. A KRA can be as simple as defining the number of calls and sales volume required of a sales position or the maximum time a customer should be on hold. Operating without a KRA is like taking people bowling and turning out the lights. They’ll make a lot of noise but won’t really know what they’re doing. That’s why you need to be clear about the role you’re hiring for—otherwise, the person you bring could leave when they find out what their job really is.


You probably thought running a business sounded fun—until you realized it would actually run you. Discover the EntreLeadership System—the small-business road map that takes the guesswork out of growth.

Related articleHow to Create Role Clarity Using Key Results Areas

11. Go on a spousal dinner.

This may be the best advice on the list. A spousal dinner is your chance to get to know the candidate and their spouse and share your company story in a casual restaurant setting. It’s a game changer. As the spouse hears about your culture and the job role, they’re usually eager to share whether they think the position fits. One more bonus: You’ll discover if your candidate is married to crazy. If they are, stay away.

12. Implement a 90-day probation.

Once a person is hired, put them on probation so everyone can make sure the fit is right. This is a low-obligation period where they can walk away if they choose. But if they decide to leave, discuss what went wrong and try to fix it first. You’ve invested a lot to get here. Every quarter or so, celebrate all your new team members who made it through their first 90 days. This is the perfect time for you and your leaders to pass the baton to them as protectors of culture and make it what they want it to be.

Bonus Tips for How to Hire Employees for Your Small Business (and Develop Winning Team Members)

Are you seeing why some company cultures tank and how bad processes create a revolving door of frustrated employees? That’s good! You’re getting it. Resist the urge to keep doing what you’re doing if it’s not working. That’s the definition of insanity. And you’re better than that.

Also remember: The cost of churning through team members is high. (You’ll pay the equivalent of six- to nine-months’ salary to replace a team member alone.) So, have the courage to do the right thing the right way for your company’s sake. Then, go to battle early and often to care for, connect with, and keep the team you’ve built. That’s called great leadership!

These additional tips will guide you too.

Look for team members who are motivated by opportunities and your company’s philosophy.

If they only care about opportunity, sure, they’ll grow and add to the bottom line, but they’ll miss the greater mission of serving people. If they only care about your company philosophy, they’ll care about mission and culture but potentially miss business objectives and fail to operate at the speed of your business. You want excellence plus integrity from your team members.Thought leader Patrick Lencioni puts it this way: “The kind of people that all teams need are people who are humble, hungry, and smart: humble being little ego . . . hungry, meaning they have a strong work ethic . . . . smart, meaning not intellectually smart but inner personally smart.”

Never sell a J-O-B.

Always have an opportunity available, an adventure, a disrupter. Sell the idea of doing work that matters and invite candidates who are the right fit to climb on board. People want to be part of something bigger than themselves. Help them see how your mission offers that.

Don’t forget the paperwork.

You’ll jump through a mind-numbing number of hoops as you document and report on your hiring process. These are among the most common:

  • An I-9 form and supporting documents to make sure the candidate is eligible to work in the United States. The form includes their contact details, Social Security number and employment eligibility.
  • A background check, once you’ve made the job offer, to keep you, your team and your customers safe. Once the applicant authorizes this, you’re free to use a third-party agency to run the check.
  • A W-4 form completed by your new team member for federal income tax withholding.
  • A W-2 form you’ll complete to detail their earnings and taxes withheld. If your state has a state withholding form, you’ll need to complete that too.
  • Other details, like reporting new hires to your state employment agency, getting the right insurances, setting up payroll, and onboarding.

Related article: How to Create an Onboarding Plan Your New Employees Will Love

How to Keep the A-Team You Build

Hands down, your largest business investment is your people. So, once you’ve got the right ones in the right seats, you’ll want them to keep thriving. One way Ramsey Solutions stays connected with team members regularly is through Weekly Reports—a tool delivered through the EntreLeadership Elite system.

Weekly Reports give you a weekly one-page snapshot from every team member so you can see (and respond to) their highs and lows, morale, stress, and workload. It’s a game changer for trust, care and communication!

So now that you have the knowledge, go out there and hire your A-team!


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About the author


Ramsey Solutions has been committed to helping people regain control of their money, build wealth, grow their leadership skills, and enhance their lives through personal development since 1992. Millions of people have used our financial advice through 22 books (including 12 national bestsellers) published by Ramsey Press, as well as two syndicated radio shows and 10 podcasts, which have over 17 million weekly listeners. Learn More.

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