Whether you are considering hiring your first employee or thinking about expanding your existing team by adding a new member, you need to consider several factors before you take that step and make that commitment. First, you need to make sure you’re actually ready to hire someone. And then you want to consider different options for getting the help that you need. Only then are you ready to decide which type of hire you are going to make.
How to Know You’re Ready to Hire
You’re ready to hire a new team member, whether that’s your first or your fifteenth, when three things are true about you and your business.
1. You are maxed out.
Remember this is your business so you get to decide what your version of maxed out is. Maxed out for you might be 70 hours a week or it might be 25. You get to decide when you’re at max capacity and you’re ready to bring on another person.
2. You have the money to pay them.
This is a big one! Many people think that you should hire someone first and then hope that they earn their keep. Of course, they should make you more money than they cost you, eventually. But that doesn’t happen overnight. The first few days or even weeks, your new team member is learning the ropes. They may not produce a return on your investment in them within the first month or more in many cases. However, they are working during this time and it’s your responsibility to pay them. That’s why you need to already have the money to pay them for a few months before you hire them. Because they will expect to get paid on Friday—just like you would!
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3. You want to lead another person.
This is also important. Just because your demand is growing and you know that you need help doesn’t mean you have to hire help. Believe it or not, you can still make more money and grow your business without hiring. You might not grow in the same way, but you can still grow.
Bringing on another team member is like having a child in some ways. You’re no longer just the business owner, product creator or service provider. You’re a leader. You’re responsible for hiring, training and leading this person or this team. And don’t take this responsibility lightly! You’re entrusting them with your brand and business, so it’s important you do a good job at this.
This is of course in addition to everything else you’re already doing. Hiring help can allow you to grow your business and reach your goals in new ways, but be careful that you don’t unrealistically think this person is only going to take responsibility off of your plate. Because in many ways, they also add a different responsibility to it as well. So if you have the desire to lead, that’s awesome. But if that isn’t how you want to grow, that’s perfectly fine too. Remember: This is your business and you can chase your version of success!
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If you are maxed out, have the money to pay another team member, and have the desire to lead another person, then it may be time to make your first or next hire. However, before you take that important step, I also want you to consider your options for getting the help you need. I want you to baby step your way into things because when you do that, the risk is lower and the mistakes you make are smaller.
Hiring doesn’t have to be an all-or-nothing thing. You don’t have to choose between sinking with no help or taking a giant leap to bring on a full-time team member with all of the cost and commitment that that involves. You have several options for getting the help you need, so let’s look at each of them.
Types of Employment to Consider
There are many ways for you to get the help that you need to grow your business and reach your goals. Here are four of the most common positions for you to consider in order to make the decision that’s right for you and your business.
When you hire someone full time, you’re making a commitment to that person that they have a permanent position in your business on a full-time basis, which is usually defined by 36–40 hours a week every week. You can structure their pay however you want to, but the most common is based on an hourly rate or an annual salary, not including commission-based structures. This type of hire typically has the highest commitment level and the highest cost in payroll and benefits, such as health insurance or paid time off in sick or vacation days. For these same reasons, if it doesn’t work out, letting a full-time employee go can be more complex with legal ramifications to consider.
The expectation from this team member will also be very high because you’re bringing them into your business full time, so they are now a reflection of your brand, your business and your values. They need to not only be a fit for the position but they need to be a fit for your culture. Because of this high level of commitment that you offer the team member, this type of hire also has the potential to give you the greatest loyalty and commitment in return. A full-time team member is almost always more committed to you and your business than a part-time team member. Turnover (when an employee quits) for full-time positions is usually much lower, which is a good thing!
The next level of hire that you can make is a part-time team member. This is where you hire someone on a permanent basis that works in your business less than 34 hours per week most weeks. The schedule and hours can vary, but if they are categorized as a part-time team member for tax purposes, they need to work less than 34 hours each week.
A part-time team member requires a lower level of commitment and cost than a full-time team member. Commission-based pay aside, part-time team members are usually paid hourly, and that hourly rate is often less than what a full-time team member would expect to make. Because of that, many businesses structure their entire company based on only part-time team members. They want to avoid paying more money in payroll and for full-time benefits.
However, it’s important to point out that when you offer less money and a lower commitment, you will often get that in return. Part-time team members are almost always less committed than full-time team members. In my experience of leading hundreds of part- and full-time team members, part-time employees don’t take the job as seriously, and as a result, turnover is much higher.
Now that doesn’t mean that you can’t get outstanding team members for part-time positions, because you can. There are great examples such as Chick-fil-A, which hires teens for part-time jobs and trains them to be outstanding, mature employees. However, when compared to full-time team members, part-time team members not only require a lower level of commitment from you, they often bring a lower level of commitment to the role as well.
When you hire someone on a contract or project basis, it means that you bring someone in to help you for a particular project or period of time. You might have a new product you’re launching or a large event you’re planning, and you need help pulling off that particular thing. When you hire someone on a contract basis, you can structure the hours, schedule, and pay any way that you want to. You can pay them on a project basis, hourly basis, or some other option altogether.
The most important thing to keep in mind for hiring contract employees is that you are crystal clear in your expectations on the front end. That’s where the term “contract” comes into play. You want to draft a contract or agreement that spells out exactly what you’re hiring them to do, the results they are expected to achieve for you, what you will pay them for what period of time, what schedule and hours they are required to work, and so on.
Baby step your way into hiring by starting with a contract employee.
Though the commitment level is lower for you to hire this type of team member, you could get very high-performing and committed team members. Here’s why: Contract employees might want to do a really great job in order to prove their value to you so that you might consider hiring them on a more permanent basis. Hiring on a contract basis can be a great solution to baby step your way into hiring without the cost and commitment. You can prove that you have the work load and revenue to support another team member before going all in, and you can also begin to experience what it’s like to lead another person.
Similar to a contract employee, a temporary employee is someone that you bring in specifically for a period of time or season. For example, if you have a paddle-board or swim-lesson business, you might want to hire seasonal employees for the summer. You would need to make it clear on the front end that this position is only for the summer months of May through August. Or if you have a retail store or other product-based business, you might bring in extra help for the busy Christmas season.
The pay for this type of position is usually exactly like part-time employees, where team members are paid on an hourly basis. Their schedule during this “season” can be part time or full time, and you would set their schedule to fit your needs for that period of time. Regardless of if you hire a temporary employee for a part-time or full-time schedule, you just want to make sure that you’re clear with expectations before offering that person the position in your business. Temporary help can be a great solution to get you through crazy seasons without taking on the commitment and cost of bringing someone on board on a permanent basis.
Each of these options—full time, part time, contract and temporary—are the most common types of hires that you can consider for your business. But just because you pick one doesn’t mean you can’t change it if you want to.
Changing the Type of Position After Making a Hire
As I mentioned before, I am a big fan of baby stepping your way into things. So just because you decide to take a baby step to hire a contract employee doesn’t mean that you have to stay there. You can always change the type of position after the fact and continue to baby step your way to a higher level of hire and commitment as you’re ready to.
For example, let’s say that you are a wedding planner and you land a huge client. The scope of this wedding is more than you’ve ever done before, and you know you need help. You decide to hire someone to assist you with this particular project and you bring on a contract employee. After a few months of working on this project together, you see what a rock star this person is. Remember what I said at the beginning of this article: If you are maxed out, have the money to pay this person, and want to lead them on a more permanent basis, then you can bring this up with him or her and renegotiate their position. If you both agree on what that change would look like and lay out all of the new specifics about it such as pay, hours, schedule and so on, then you can change their position from contract to part time.
And then fast forward another six months, and let’s say that your business is taking off and you need more help. You can always go through the same transition process to change their position from part time to full time if you want to.
A Word of Caution When Hiring: Never Go Backward
Here’s a word of caution for you if you decide to make changes to a position after you’ve made the hire: avoid going backward. If a team member is a good fit for your business and the position is a good fit for them, then you can always increase the level of the position from either temporary or contract to part time, or part time to full time. However, making changes that move backward can be demoralizing, defeating and discouraging for the team member. It’s essentially a demotion, which no one likes!
Unless it’s something that they ask for, such as a mom that wants to work less hours to have more flexibility to be with her family, steps backward feel like exactly what they are—a step backward! It can damage the trust between you and them and have other negative consequences. That’s why I don’t want you to hire someone for a position with a commitment level that you can’t keep.
Instead, like we’ve covered, baby step your way into it. Only commit to what you can follow through with and only hire for positions you know you really need and can pay for.
How to Find Good Employees
You can be the most inspirational leader in the world and have the most motivational mission around, but you can’t make someone else care. People care (or don’t care) because of who they are.
You can’t make someone else care. People care or don’t care because of who they are.
But what you can do is go fishing for the ones who care. And if you want to find rock-star team members, you have to attract rock stars! That starts by having a job posting that is so targeted that anyone who doesn’t align with your vision and values doesn’t even apply. The purpose of the job posting is to attract great people who would be a good fit for your business and weed out people who would not be a good fit.
Making the Decision That’s Right for You
If you’re maxed out, have the money, and are ready to lead another person, hiring team members is a fantastic way to grow your business. Of course, building your business is rewarding, but there’s a completely different satisfaction you can find in leading and investing in other people on your team as well when you take this step.
Consider your options for hiring and choose the one that best matches the level of commitment you are prepared to offer, as well as the pay, hours and schedule that fit your particular business and goals. And remember, when in doubt, take baby steps. If you’re not sure where to start, start by hiring someone on a temporary or contract basis. This will allow you to dip your toe in the water of building a team without the risk and cost of jumping in the deep end.
Once you’ve decided to hire someone, you need to take the right steps to actually make that hire. Step one is to create a very specific, targeted job posting, like I talked about earlier.