For the first time ever, you are ready to hire at your startup. You have revenue, or maybe you raised some funding. Now, you need some additional hands to get things done. That’s great! Right?
Now look, I am not claiming to be an expert in hiring. But, I definitely made some mistakes that I can help you avoid. I’ve managed to hire over 50 people, and clear well over a quarter million in revenue with my neat little cleaning service, Utah Maids.
Maybe you have hired people in previous job experiences, or maybe you’ve never conducted an interview in your life. Either way, hiring employees when you are a startup is a totally different ballgame. Let’s get to it.
1. Startups are Risky
Is the employee worried about you making payroll in the future? Are they already worried that the company might not be around in a year? Do they have the risk tolerance for a startup? If they don’t, then it might not be a good fit. They have to show you that they are eager to join the craziness. Your own optimism about the future will help, but you shouldn’t have to completely sell them on it to get them to join.
2. You’re Entering Uncharted Territory
Does your startup have a detailed two-year plan? Nice. Might as well throw it in the trash now. Everything will be changing, always. Is this applicant agile? How well will they operate when nobody knows what they’ll be doing 6 months from now? Let’s face it, you’re also not going to have management skills like Jeff Bezos in the beginning. Will this employee survive when mistakes are made? Are they resilient?
3. Startups are Different Than Tradition Corporations
A job’s roles and responsibilities totally vary at a startup versus at a traditional corporation. Some people are just meant to jump into a job that has clear set roles where they follow tasks that have been done for years, and they will no doubt succeed at their job with a reputable company. With a startup though, they really need to be a jack of all trades. Maybe you’ll hire them to do mobile app development, but the more skills they have outside of that then the more useful they’ll be when it’s time to get scrappy and creative.
4. Follow the Law
Jumping through all the state and federal hoops to hire your first employee can be big pain at first. There is software to help, but there’s still a big learning curve. I definitely can’t cover it all here, but I encourage you to spend the time up front. If not, it’ll be a big headache when it catches up to you. Keep records of everything. Make sure you’re following all the rules with Dept. Workforce Services, state withholding tax, federal taxes, unemployment insurance, W2s, 1099s and more. Keep track of your deadlines. Mark your calendar for what needs to be filed monthly, quarterly or annually. When in doubt, call and ask.
5. Employee or Independent Contractor?
This is not legal advice, and I am no lawyer. Do some research into requirements before making any decisions. What I will tell you though is this:
- Independent contractors are cheaper but have legal restrictions.
- Employees cost more in taxes but you have more control.
Do some research to find out if you can or even should hire this individual as a 1099 independent contractor or a W2 employee. Both options have pros and cons for each party involved.
6. Don’t Ask Common Questions in Interviews
I’ve learned a lot when it comes to interviews. If I could have a crystal ball and read somebody’s mind, it would be simple. Interview questions are all you’ve got to try and reach the truth. Before interviewing for a position, know exactly what kind of qualities and skills you need in an employee. It’s hard to discover if somebody is reliable or has grit in an interview, but it’s not impossible. Get creative, and ask situational questions that cannot be answered by a pre-canned response.