Steps to Hiring an Employee

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Are you thinking about the steps to hiring an employee or are you looking for ways to improve your current hiring process? Whether you are a new business hiring employees or established company, you will be aware that hiring employees is an essential but challenging aspect of operating a business. Hiring unsuitable employees can result in reputational damage, loss of business and have a negative effect on your profits. You need to use proven techniques and tools, when considering how to find the best employees for your business.

If you’re a new business hiring employees, then keep in mind that hiring the best job candidates will have a positive effect on your business. Firstly, you will be able to create a constructive work culture with increased productivity. Additionally, good employees will represent your business in the best light, which may result in repeat sales. Overall, your business will gain tangible and intangible benefits from hiring the best employees.

The following guide gives you 12 fundamental steps to hiring an employee.

1. Set up your EIN (Employer Identification Number) if you’re a new business hiring employees.

If you are a new business hiring employees, you will need to apply for your EIN, which is also known as a federal tax ID number. Your EIN is a unique nine-digit number to identify your business in relation to your tax obligations. You can apply for your EIN online, via the IRS website. You need to check with your states’ labor department to find out how to apply for a state EIN as this is essential before taking on additional steps to hire an employee.

2. Contact your labor department before hiring employees for your small business

It is important to comply with both state and federal requirements when taking the steps to hiring employees. You must contact your state department to find out what your obligations are before and after hiring employees for your new business. The U.S Department of Labor website has a list of contact details for every state so you can start taking the steps in hiring employees effectively.

3. Create the necessary records for collecting taxes as a new business hiring employees

Withholding the right amount of taxes for different classes of employee is a basic requirement when you’re a new business hiring employees. For example, gig workers and permanent employees are subject to different tax rules. You must set up records for the following three types of income tax:

  • Federal income tax - You will need to provide your employees with a Form W-4 so that you can withhold the correct amount of tax.
  • State taxes – As your state will have additional requirements in terms of withholding taxes, you should familiarize yourself with the necessary forms and filing dates.
  • Federal wage and tax statement – You are required to complete a Form W-2 for each employee you hire. This form details your employees’ gross earnings and the amount of tax that has been withheld. A Form W-2 must be completed annually for each employee.

It is recommended that you retain your employees’ tax records for at least six years. This is because the IRS can make a request to inspect records in relation to your employees’ tax for up to six years.

4. Producing a clear definition of the role is one of the first steps to hiring an employee

After you have prepared your business in relation to tax requirements, you can now turn your attention to the practical aspects and steps to hire an employee. Figuring out how to select a new employee starts with a clear focus on what you are looking for.

Ask yourself the following questions to describe the role as you think about how to select a new employee:

  • What are the most crucial tasks that your business needs?
  • What are the employees’ immediate responsibilities?
  • How do you anticipate that the role will change in the future?
  • How much are you willing to pay your employee?
  • What is the level of experience you expect the employee to have gained?
  • What are the most important skills required for the job?

After you have taken this step to hire an employee and defined the role for the first time, you should make continuous updates even after the employee is in the role. This keeps the job description dynamic to reflect any changes to the role. 

5. The next step in hiring employees effectively is to create a job description

Defining the role makes it easier to write a job description and to make a decision for how to select a new employee. A job description will only be effective in attracting the best employees if it is written in a clear and focused way.

Here are some tips for writing  effective job descriptions:

  • Conduct research – After you have defined your role, you should carry out some research into what your competitors have included in job descriptions for similar roles.
  • Formulate a coherent title – Avoid ambiguity when naming the role is a key step in hiring employees effectively. Using buzzwords, like “rockstar” and “unicorn ” could be a turn-off for candidates. Also stay away from titles that only have an internal company meaning, for instance “Chief Happiness Officer.”
  • List the duties - Explain exactly what the employee is expected to do on a day-to-day basis to ensure you’re hiring employees effectively.
  • Set performance standards – These are essential requirements that could be used as an assessment tool when making a determination about the employee’s performance.

6. Source your candidates after you make your job description to ensure you’re following the correct steps to hire an employee

When you are satisfied with your job description, it is time to post your job openings on appropriate sites for a new business hiring employees. With so many job sites available it can be difficult to know which ones to choose for a small business hiring employees. Additionally, it can also be challenging to find the time to manage listings on multiple jobs sites.

When deciding on the next step to hire employees, it is important to think about how to streamline the process without compromising on the quality of the candidates.

With Fountain’s new Boost feature, the headache and wasted time associated with posting to job boards and sourcing candidates is eliminated. You simply have to let us know how many hires you need and we will do the rest. We suggest a budget and post your jobs on the most suitable job boards for your business.

Boost makes sourcing candidates smooth and easy as you:

  • Have access to more applicants with just one click.
  • Save time because there is no need for you to post to different job boards.
  • Have convenient access to your candidates since you can view them in one place.

Get your easy guide on sourcing candidates and an into to Fountain's Boost feature for hassle-free sourcing.

7. Pre-screening your candidates is an essential steps to hire an employee

Your pre-screening process will help to determine whether the candidate's responses on the application form will translate into a good fit

One way video interviews are an ideal way to pre-screen applicants because you are able to see how the candidate communicates.

Fountain provides the functionality for candidates to record interviews to help you to decide whether they will move on to a face-to-face interview. Recorded video interviews saves time and resources as there is no need to coordinate facilities and staff members for in-person interviews unless there is a strong likelihood that the candidate will fit in well with your existing teams. This is an essential step to hire an employee as it can save your team hours of time and money by reducing the time wasted interviewing.

8. Be aware of illegal questions when hiring employees for your small business

Although it is important to get to know as much about the candidate in order to make the best hiring decisions, there are some questions that are illegal to ask. Some inquiries are considered to be discriminatory in nature and may negatively prejudice the candidate. The U.S Federal government has identified some attributes and characteristics that are off limits in interviews.

Some of these characteristics include:

  • Disability
  • Religion
  • Pregnancy
  • Race or color
  • National origin
  • Familial status

9. Scheduling interviews is a critical step to hiring an employee

After you have pre-screened your applicants, it is time to invite shortlisted candidates to an in-person interview. Depending on the number of candidates you are planning to see, scheduling interviews can become a logistical nightmare. Arranging interviews the traditional way typically involved sending emails with the proposed date and time then, waiting to hear whether the candidate could attend. If the candidate is unable to accept the proposed time, the whole process can be thrown out of alignment, as hiring manager struggle to find new slots.

With Fountain, the question of how to select a new employee is made easier by reducing back and forth messaging associated with traditional interview scheduling. Our interview scheduling toolkit allows you to send a link via email or SMS to schedule interviews. The candidate selects an available time slot and your calendar is automatically updated. The candidate receives a notification that the interview has been scheduled via an SMS message.

10. How to select a new employee? Conduct interviews

The interview panel will be dependent on the size of your business. Ideally, you should have at least two people interviewing the candidate to ensure you select the right one. The panel can consist of the hiring manager and a Human Resources representative to ensure you’re taking the right steps in hiring employees effectively. Your questions should be geared towards finding out how the applicant deals with real life scenarios. Therefore, you should ask some behavioral questions to get an insight into how the candidate works through issues that may come up in the role.

You should also include questions where the candidate can provide examples of how they solve problems. As well as having an aptitude for completing the required tasks, you also need to find out how the candidates work with colleagues. So, questions about how they handle difficult situations with team members will give you a good insight into the type of team member they will be.

11. Background checks are one of the final steps to hire an employee

A candidate may have impressed you in the interview, however, you need to run background checks before going further. You may need to consult a labor lawyer before running a background check. This is because different states have various stipulations about what you can ask when doing a background check. For instance, there may be a ban or limitations in relation to asking about criminal histories.

Background checks must include work references to confirm the candidate’s work history and their responsibilities. You can use background check vendors to undertake this process on behalf of your company. To create a seamless employee hiring process, you should ensure that your background check vendor integrates with your recruitment tool. Fountain seamlessly integrates with different vendors to optimize how you hire employees. This enables you to create an efficient workflow that takes the candidate from the application stage to the job offer.

12. Verify work eligibility to wrap up your steps to hiring an employee

A vital check when hiring employees is to confirm whether they have the legal right to work in the U.S. You may be liable to pay fines and could face criminal charges if your employees are not eligible to work in the U.S.

The following will help you to hire candidates who have the correct eligibility for employment:

  • Your employee needs to complete section one of Form I-9 before they start (or on the first day). The information required on this form includes, Social Security number, employment eligibility and contact information.
  • You will need to see official documentation that confirms your new hire’s ID and employment authorization, by the time they have worked with you for three days. The relevant documents can include a U.S. passport or driving license.
  • There may be occasions when the completion of the Form I-9 and reviewing the relevant document is insufficient to confirm work eligibility. In these instances, you may need to enroll in and use the E-Verify program.
  • It is a legal requirement that you retain the Form I-9 for three years from the date you hired your employee. If the employee leaves your company, you are required to keep the Form I-9 for one year after their leaving date.

Final thoughts: Steps to hiring an employee

Hiring employees can be an exciting time because your company is growing. However, it can also be daunting as the stakes are very high if you employ the wrong person. You should make every attempt to reduce the uncertainty from the hiring process by using recruitment software that makes sourcing, screening and onboarding of candidates seamless.

Whether you are a brick and mortar or on-demand business, Fountain has a plan that will suit your business.

Try Fountain for free today to find out how we can help you to effortlessly expand your workforce.

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