Everything You Need to Know About Hiring
Episode 638: Show Notes
As most of our listeners at Boss Project know, Abagail is our CFO and sits in HR as well. She has worked hand in hand with plenty of amazing people in HR to learn about the hiring process for a company. She has single-handedly shifted her team from just Emylee and Abagail, to exploring contractors, part-time employees, full-time employees, and pretty much everything in between! Inside the incubator, she has started to have conversations about hiring, and she has plenty of wisdom to share from all of this experience.
Most business owners struggle with follow-through. The reason why Boss Project has been successful is that where Abagail struggles to see things through, Emylee excels! This formula, along with having the team to support it, has been a winning recipe for us. If you’re a solo business owner, you could be leaving money on the table for this reason. That’s where the magic of having help, even for ten to fifteen hours a month, comes in.
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The difference between contractor vs. employee
When you are hiring a contractor, you are, in fact, their client. There is a contract in place which stipulates what your relationship is for, what the nature of the work is, how it is handled, and what the schedule looks like. When you take on an employee, you are creating an at-will relationship, where you are both agreeing to be in the relationship within a set schedule, set hours, and set expectations by the company. The company is in charge of what the relationship looks like and has way more control over how training is done, and more.
There are different tax and legal implications, and they operate really differently. If you’re looking at the bare bones of it, an employee has a lot more complication on the setup, but a lot more freedom in what the relationship could evolve into in the future. When you’re working for yourself, your time is your hottest commodity!
The role you shouldn't hire first
Most people’s first hire is a marketing or social media manager, and we don’t think that’s the best choice! We’re not saying that social media and marketing aren’t important! There is no right answer to who you should hire first, but what you really need to be thinking about is what is taking you the most time but requires the least possible skill to complete. For us, that was a lot of administrative work; answering emails, responding to customers, and calendar management. We were shocked at how much time we freed up by outsourcing this to an employee.
People are so overwhelmed by the idea of hiring! Being on the other side of it for a significant amount of time, we can assure you that it gets easier. For the first few hires you make, it’s really important that you have done the work you’re hiring for. If it’s a core part of your business, it’s critical that you take the time to learn. There are some things you don’t need to do, where you can pull in subject matter experts, but when it comes to day-to-day operations, you have to know how it works.
If you’re thinking of hiring as a growth mechanism, rather than just freeing up your time, what you have to decide from a structure perspective, is what you can afford. Sometimes what you can afford is only what is going to free up your time. If that’s all you can afford, then you are the growth mechanism!
When you should hire part-time vs. full-time
There are a few misconceptions about the administrative burden of hiring support for your business. Because of the nature of the work, contractors are responsible for the tax implications on their people, you just have to file paperwork that you pay them. When you are hiring internationally, the thing to keep in mind is the time zone. However, with contractors, you can’t dictate when they do the work for you. If they are only available on nights and weekends, they’re fully allowed to work that into their schedules.
When it comes to hiring an employee, you have to be registered in the state where they reside, but the state-level paperwork only needs to be filed once you have paid them their first salary. A lot of people are intimidated by paperwork, but you don’t need to be. There is so much help when it comes to paperwork! And there are payroll providers out there to help you simplify the work. We count on the fabulous, easy-to-use software Gusto Payroll and HR to manage our payroll.
For most employees, you can budget 20% over their wages, and handle all your personal taxes, and some basic benefits. When you start to add more benefits, you’ll need to look at budgeting a bit more for healthcare. We are at the point where it’s about 25 or 30% above their salary. We have a way to predict what it costs the company. When it comes to dollars and cents per hour, an employee is a much more affordable coverage than you might realize. You’re paying a premium because you’re paying for far fewer hours of their time.
Anything under fifteen hours a month is likely going to be a VA who is dividing their attention between loads of other business owners vying for their time. This isn’t someone who can be fully invested in your mission as a business. The benefit of working with one person on a much larger package is that you’re more likely to be a bigger portion of their time and thus a bigger priority. You’ll get more attention, more buy-in, and more willingness to sit within your value system. However, at the end of the day, a contractor is still operating their own business and considering their own business interests all the time.
When you get started, our recommendation would definitely be to start with one employee to put your systems in place, instead of starting with two in different roles. Don’t be afraid to market for a part-time position! There are plenty of people who are willing and interested in taking on that position. You’ll be their only job or one of two to three maximum. And definitely look into a service like Gusto Payroll and HR to streamline your payroll & keep you compliant.
Quote This
There is some magic in having help for even ten to fifteen hours a month. If I hadn’t experienced that, I wouldn’t have seen the value in what having an employee could do for me.
Highlights
The difference between contractor vs. employee [0:09:55]
The role you shouldn't hire first [0:15:32]
When you should hire part-time vs. full-time [0:27:18]
ON TODAY’S SHOW
Abagail & Emylee
The Strategy Hour Podcast
We help overwhelmed and creative entrepreneurs break down their Oprah-sized dreams to create a functioning command center to tame the chaos of their business. Basically, we think you’re totally bomb diggity, we’re about to uplevel the shiz out of your business.
KEY TOPICS
Contractors, Employees, Hiring, Structure
