This article is for educational purposes and does not constitute legal, financial, or tax advice. For specific advice applicable to your business, please contact a professional.
Maybe you’ve taken the initial steps to start your business — from solidifying a business idea to writing a business plan to coming up with a name — and now you’ve decided you’re ready to hire employees. Or maybe you’re looking for better ways to evolve your existing team. Where do you start? And what can you do to recruit and retain top talent in a challenging and evolving labor market?
Here’s a guide through the process. It includes necessary forms, tips, and tools to succeed and grow your business while taking care of your team.
Before you start hiring
Check out How to hire employees: A checklist and consider completing the following tasks:
- Establish an Employee Identification Number
- Set up records for tax withholding
- Define roles
- Find candidates
- Conduct interviews
- Run background checks
- Report new hires to your state employment agency
- Obtain workers’ compensation insurance
- Go through a full onboarding process
- Choose a payroll method
- Display workplace posters
Some additional tasks and steps to consider:
- Check out the IRS’ employer tax calendar
- Familiarize yourself with the following tax forms: Form 941: Employer’s Quarterly Tax Form, W-2 Forms: A guide for employers, 1099-MISC: Forms for hiring independent contractors
- Creating and implementing a paid sick leave policy.
Setting salary and benefits plans
How much should you pay your team? Here are some steps that may help you determine the right figures:
- Write a solid job description
- Do market research
- Check your budget
- Decide on a range for salaried or hourly employees
It’s also helpful to have a payroll system in place for when your team is hired. Here are some basic tasks to consider when setting up a payroll system:
- Set pay periods and paydays
- Determine how you will collect employee and employer taxes
- Pay and file taxes
- Consider relevant federal, state, and local laws, including relevant minimum wage requirements
- Determine how you will implement timekeeping for hourly, nonexempt employees
Optimize your labor costs and simplify your payroll process with an easy POS integration.
Remember that offering benefits is a key part of building a good team. While they can add additional costs, they can also potentially benefit your business in multiple ways, including:
- Improving employee recruitment and retention
- Improving wellness and productivity
- Providing potential tax advantages in some instances
- Contributing to a positive work culture
According to a survey conducted by Ramsey Solutions, the top 10 most common employee benefits typically offered by businesses include:
- Health insurance
- Paid time off (PTO)
- Retirement savings plans
- Life insurance
- Dental insurance
- Vision insurance
- Health and wellness programs
- Disability insurance
- Employee assistance programs
- Mental health and emotional well-being services
You can also consider more out-of-the-box benefit options. Get some ideas here.
Recruiting and hiring
Best practices for recruiting top talent
There are a few important ways to set yourself up for recruiting success and find the right people, including:
- Defining your roles clearly
- Knowing what you’re looking for
- Searching in the right places
- Writing clear job descriptions
- Asking the right interview questions
- Bringing in multiple opinions during the interview process
Need to hire quickly? These tips can help you speed up the process while still prioritizing fit:
- Reconsider your red flags, such as gaps in work history
- Rehire former staff members or target former co-workers
- Hire for skills over experience
- Get referrals from your team
- Promote from within
- Get creative with working interviews, in which candidates are paid to come in and do some of the responsibilities of their potential role
The application and interview process
When you’re ready to field candidates, here are some ways to get the most out of your employee application forms:
- Make applications readily available in person and online
- Acknowledge each application with a thank-you email
- Compare each application against the job description
- Compare favorites side by side
- Email candidates who don’t move on to the next stage and thank them for their interest
- Keep application forms on file for future openings
Here are some typical application components to include:
- Mailing address
- Email address
- Phone number(s)
- Which position they’re applying for
- Available start date
- Employment history, with names of companies, job titles, duties, dates of employment*
- Contact information for professional and/or personal references
- Place for applicant’s signature to certify that everything is accurate
Here’s a list of interview questions that may be helpful in assessing new hires:
- How would you make a meaningful contribution to this business?
- What motivates you?
- In which types of work environments do you thrive the most?
- Which types of work environments hamper you?
- Who was the best manager you ever had? Why?
- If I were to contact your references, what do you think they’d say about you?
- What’s the toughest work situation you’ve ever been in? How did you resolve it?
- What’s your work style? How do you collaborate with others?
- What interested you about this position and this company?
- Why did you leave your last job?
- What are the three most important skills or traits you’d bring to this job?
Types of workers for your business
Understanding the difference between employee types not only impacts the taxes you pay and the benefits you offer, but it may also help you figure out who you need to bring on. There are a few different types of employee classifications, including:
- Full-time employees: These employees typically work a predetermined minimum amount of hours per week and are frequently eligible to receive health benefits.
- Part-time employees: These employees typically work less than the full-time hours and are usually paid hourly. They may or may not be eligible to receive health benefits.
- Temporary or seasonal employees: These employees are typically brought on for a specific amount of time or to help fill specific staffing gaps.
- Interns: These are people looking for more work experience by trying out an entry-level role.
- Apprentices: These are participants in paid job training programs, learning the ins and outs of their field through instruction.
- Independent contractors: These are self-employed individuals.
- Consultants: Typically these are experts who provide advice in a particular business area.
- Freelancers: Similar to contractors or consultants, these are self-employed individuals. This term is used more in the creative field.
Get Started with Square Payroll in minutes
Easily pay your employees and contractors
Tips for how to onboard and train your employees
A smooth, considered onboarding and training process is integral to long-term success after you’ve officially hired employees. Here’s how to get started with onboarding:
- Handle administrative tasks, such as adding your employee to internal systems, completing new-hire paperwork, and sharing your employee handbook.
- Provide the tools they need, including physical equipment.
- Start a shadowing program.
- Send a reference guide with internal lingo, a team directory, and where to find things.
- Write out role-specific goals.
- Help build connections.
- Set up regular check-ins.
Being thoughtful about your training process can also contribute to more productive and satisfied employees. Have a plan in place to build up the technical and the soft skills necessary for the role. And having an easy-to-learn, all-in-one ecosystem of tools, such as Square Shifts for scheduling connected to your Square POS and payroll, can help facilitate that process for both employees and employers.
How to grow your team and optimize your staffing
An essential part of running a business with employees is learning how to get the most out of your team while you prioritize their well-being and remain mindful of labor costs. Research shows that employee retention and engagement are top problems faced by companies. Focusing on these employee development steps is a good way to start building a strong, satisfied staff:
- Make coaching and mentoring a priority.
- Chart a clear course for development and advancement.
- Offer development programs tailored to each individual.
- Lead by example.
- Become a listener.
- Know when to say no to the wrong opportunities.
- Be flexible.
- Communicate clearly and frequently.
- Treat staff well-being as a success metric.
- Make sure your wages remain competitive.
Technology such as Square Shifts can help you keep track of schedules and time-off requests. It can also empower your team to manage their schedules and view hours and pay in real-time. Here are more ways to retain top talent:
- Quick, reliable payments, including instant payments with Square Payroll
- Flexible schedules
- Remote work options
- Strong vacation policies, benefits, and perks
- Recognition for good work, a transparent review process, and clear career paths
Automation and optimizations are also useful tools here. Relying on multiple companies and software solutions to run your business can be a pain. Having an all-in-one system makes the busywork easy, giving your staff more time to focus on the work they love. The Square ecosystem of business solutions helps cut out the time-consuming tasks, from data management to tip tracking and shift scheduling. This can give you more time to invest in your business and your team, and it frees up employees to do more meaningful work.
From inventory management to payroll and email automations, here are some examples of how businesses optimize their operations.
Staffing tools and solutions
As you choose or switch payroll software for your business, consider the amount of time spent working across multiple tools or making fixes and tweaks across the board manually. Square Shifts provides POS-integrated time tracking, team member scheduling, and wage management to optimize your labor costs and simplify your payroll process. It connects to key business reports in your Square Dashboard so you can stay on top of your labor costs and scheduling needs — from overtime and break tracking to early clock-in prevention — all while keeping your data in one place.