Nurturing your startup requires hard work and intense focus, so you understandably may feel a sense of gratitude or accomplishment as you watch it grow. Hiring your first employees is a milestone event that may be necessary for your company to reach the next level of success and profitability. However, there are numerous requirements and ramifications that must be considered before taking this step. These are some of the important factors to research as you prepare to interview applicants and extend a job offer to the right individual.
Taxation Requirements
As an employer, you are required to report wages for all in-house employees, including part-time workers, to the IRS. Quarterly reporting and required IRS payments for withholdings are required. These requirements affect your responsibilities for each pay period as well as on a quarterly basis, and they also affect your business’s finances.
Workers’ Compensation
In most states, employers must purchase workers’ compensation insurance regardless of the size of the company or the industry that they are involved in. Before purchasing this insurance, consider utilizing workers comp attorney services to learn more about your requirements as well as the steps to take if an employee is injured on the job. A consultation is also a great way to learn about your exposure to liability in this area.
Local Wages
The wage that you offer to new hires impacts your budget as well as the quality of talent that you attract and their desire to continue working for your company. Consider your need for highly-skilled or experienced professionals versus your desire to train the right person. Research local wages to ensure that the salary or hourly rate offered as well as available benefits are in line with what other companies are offering for similar positions. Remember to perform annual reviews and to offer raises as needed to ensure that your employees continue to be offered fair, competitive compensation as market conditions change.
Regardless of whether you intend to hire a part-time assistant for basic administration work or a team of highly-skilled and well-educated experts, these steps apply. Remember to adjust your business budget to accommodate for taxes, insurance and compensation as well. It is also smart to establish a reserve fund to cover payroll for at least a few months before extending an employment offer. By doing so, you can ensure that you can afford to keep your employees under your roof even during slow periods.