Small Business Talk
The Podcast to Grow your Business Faster
Tips on Employing Your First Employee with Jo Alilovic
As an employment lawyer with over 17 years of experience, Jo assists employers grow and scale their businesses using her EQUITY model. She helps them put in place the foundations needed for solid employment relationships – contracts, policies and procedures, and training – and helps them resolve conflict when it arises.
3D HR Legal won the Service Award in the Business South West Awards and was a finalist in the Lawyers Weekly Australian Law Awards in 2018.
Jo also has a keen interest in diversity initiatives. On International Women’s Day 2018, Jo launched her podcast “The Juggle”. It provides professional career women with the tools and support they need to successfully build their career whilst also managing family demands. Since then, Jo has been a regular presenter on topics such as ‘The 6 keys to managing the juggle’, and ‘Implementing flexible work practices’.
When not practising law, Jo can be found reading, running, podcasting on “The Juggle”, dreaming about past and future travels and spending time with her family.
Tips on Employing Your First Employee
What do you find are the biggest pitfalls that employers or prospective employers make when they go to start their first hire?
3 Things to Do When You Want to Hire Someone
- Job Description
- Do I need an Employee or Contractor?
- Pay Rate
1. Job Description
The first thing would be a job description.
Sit down by yourselves or with the key player in your business and decide “What is it that this person that I’m going to hire is actually going to do?”
Generally, Jo finds that people will say to themselves…
“Well, I’m just going to hire someone for a day a week, ’cause that’s what I can afford and then I’ll just kinda make it up as I go along. I’m sure that once I’ve got someone is sitting in the seat.”
The risk of taking that attitude is that you won’t actually be mentally prepared to give the new hire the work or you might end up finding that they aren’t the right person to do that kind of work you need them to do.
Very much… The first thing is to have that job description.
2. Do I need an Employee or Contractor?
Once you have worked out the skills that they need, the experience and so on, then you ask yourself, number 2 question is “Do I actually need an employee or perhaps I only need a contractor”
There are big differences when you take someone on as a contractor to an employee. There are a lot of rules around whether they actually are a contractor. You might think you’re taking on a contractor and then find out later on that they are an employee so that’s definitely a big number two.
3. Pay Rate
The 3rd thing is what you are going to pay them?
You need to work out what legally you’re obliged to pay them and then from there, you need to look at what you can afford to pay them. It may be that the bottom line of what you have to legally pay them, is not something that you can afford; in which case you need to go back to the drawing board and wait a little bit longer before taking on that first in employee.
Or it may be that you just want to know what the bottom line is, and then you have a room above that, to pay them a little bit higher, but you can make sure that you get the right kind of person.
Find that sometimes people think that they employ or their first higher should be able to do everything and they want them to basically replace themselves.
What Do You Want Your New Employee To Do?
What is it that you’re going to get someone to do when you hire them?
You need to define the job and articulate the key requirements of the job. Make sure it is only one job and not lots of little bits of many jobs that require different skill sets.
“Yeah, there’s a real risk that you want them to do everything and that you haven’t properly articulated, what the key things that you need them to do and if you have that idea it’s very common for a first hire to be someone in an admin that role.” Jo said.
If you think they are going to the bookkeeping plus answer the phone, plus they are going to do some social media marketing. These are all different skills sets and 3 three different jobs. As small business owners we all do all of these jobs, so we think our hire will too and this is not an effective strategy for successfully hiring someone.
Now You Have Your Job Role Sorted What Next?
The recruitment process is next. Have a recruitment process outlined and then before they start work have a contract in place.
Difference between Employees and Contractors
The simplest way to look at it is that an employee is working for you in your business to grow your business and to work in your business. Whereas a contractor is someone who has their own business, and who is ultimately aiming to grow their own business and they’re doing that by doing some work for you.
An employee for example, a position where someone is only working for you, then they more than likely in majority of cases be an employee. If, however, there’s someone who’s working for multiple people, then there’s more likelihood that that’d be found to be a contractor.
This question about are they running their own business, or are they benefiting… My business?
That is a really good starting point.
If you’re getting a bookkeeper come in for a few hours a week and they have multiple clients, then they would be a contractor. If you’ve got a part-time somebody coming in and they only work for you and on the off time they’re a mum or a student or they just work those hours, then that way, they would be more likely to be employed.
Of course, you will always have those odd situations. For example, they might be someone who’s a bookkeeper who has two part-time jobs. It really does come into that idea of, are they running a business, is that bookkeeper running a business or are they just working in your business?
What Can You Ask For In Your Employment Ad?
When it comes to advertising, this is another reason why it’s so important to have you have done that job description because it’s really hard to write an advertisement asking to find to someone if you don’t know what it is that you actually want them to do. Having that job description right next to you is very, very helpful, and you can kind of tease out the key parts of the job description and make sure that you’re making that really clear when you’re advertising.
What employers need to be really careful about with an advertisement is not to be misleading about what the role is because you don’t want to have people applying, who aren’t actually suitable for what you’re looking for.
You also need to be careful that you are not discriminatory in any way,
that would include things like not saying something like
You want a young person
or you don’t want an old person
or you don’t want someone who has kids.
This means in all communication including face-to-face or telephone interviewing.
The way to handle situations where you need a specific type of person is to describe the role not the person eg advertise it as a junior level role where you’re hiring someone who’s under that sort of 21 year age you’re looking for someone who’s got a very limited experience.It’s an introductory role, perfect for a junior and a pay rate range.
The next thing is hoping that you get some applicants, and of course then you need to short list them. Go back to your job description and make sure that you have got someone who’s a applying who’s ticking all the boxes when it comes to the application.
To listen to the rest of Jo’s tips go to the On Small Business Talk Podcast with Cathy Smith Episode #009 for all the details.
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