Hiring your first employee: practical steps for small businesses

HIRING your first employee is a defining moment in your small business's story.

- Ilana Bouwer

Although this big step could help you to accelerate growth and improve profitability, it also comes with some risks. Finding the right person will help you reach your business goals, but the wrong hire could sap your momentum, strain your resources or even cause financial losses.

There is a lot to think about, especially if you don’t have a background in human resources. In addition to the financial and compliance aspects of becoming an employer, you'll need to think about how your first hire will help you advance your business plan. Let’s run through some of the basics:

As a small business owner, you're probably running on a tight budget. Think carefully about which tasks and priorities you would want an employee to handle for you, be it income-generating work, handling internal tasks to free up your time for sales and billable work, or a mixture of the two.

For example, if youre running a software development firm, would you benefit from someone to help with sales or someone to share the client workload? Do some market research to find out how much you’ need to pay such an employee and check whether you can afford to pay a market-related salary. If the pay is too low, you may struggle to find someone capable or retain them long-term.

Your next step is to write a job description, where you detail the personal qualities and qualifications you are looking for in an employee as well as the responsibilities of the role. This job description will form the basis for your job advertisements as well as the contract you eventually sign with your new employee.