Taking On Your First Employee

A one-man shop owner has more work than he can handle, and needs advice on starting to staff up. November 26, 2007

I have been in business just over 10 years and I am still my company's only employee. I have always subcontracted all my labor, but that doesn't seem to be working anymore. I am running myself ragged between being in the field and in the shop. I am in an area that is booming and I don't want to miss the big rush. I have been hesitant to hire any actual employees because I just don't have any experience with employees. Has anyone been in my position, or does anyone have a solution to my problem?

Forum Responses
(Business and Management Forum)
From contributor W:
Everyone that has started a business by themselves has gone through this, so you have come to the right place. The answer is not short or simple. Hiring a first employee is a painful learning experience for most people.

Start writing down all the tasks that your job entails. Include everything, from drawing plans to scrubbing the toilet. Keep a notepad with you so as you do things, you can add it to your list. As you get this list close to 90% complete, start identifying which tasks both take significant amounts of time, and can be done without much training. Put an ad in Craigslist and say you want an entry level person to do these tasks (but not in extensive detail like in your list; be succinct).

Contact a payroll management company such as Administaff and tell them you are about to hire your first employee. They will charge more than you could hire someone for on your own, but the advice and peace of mind they can provide is priceless. This is very important. They have lawyers and human resource people that now work for you. They will tell you most of what you need to know about hiring (what questions you cannot ask, for instance), how to do performance reviews, and what to do when the employee doesn't act the way you want them to.

Hire slowly, fire quickly. The staffing company will tell you how to fire properly, to keep your butt out of trouble.

Look for stability in their past work history. Look for someone with a good attitude and work habits. All else can be taught. You may have to go through several hires to get the right person. Since they are entry level and you don't want to break your bank in the process, start them at $9.00 to $10.00 with a performance review and opportunity for wage increase after 30 days, 85 days (because of the 90 day probationary period), 6 months, and annually. Starting wages are higher in inflated markets, maybe lower in extreme rural markets. Most employees really appreciate the constant performance feedback and pay recognition.

Be a leader: share your vision of what you want your company to become. If you don't have that vision and don't share it, your employee will only see their job as drudgery, and they will not stay long. Start the long process of developing your leadership skills. After 12 years and 45 employees (going through hundreds of new hires it seems), I am still working on this myself on a daily basis. It never stops. Read books by great business leaders. I could keep going, but this is a start.

From contributor L:

Look into true32 - it may not be entirely for you, but the systems implementation and outsourcing info would really save you some time.

I know what you are saying about the boom, but be careful; don't put all your eggs into one basket, and remember you can't be it all to everyone. The booms are great, but you truly want to put yourself in a position of working year round.

The most important thing I look at daily is who I'm bidding to and who we are delivering finished product to. Are we bidding and working too much for one company? The best thing I did in the past ten years is develop a clientele list that is diverse. We are busy all year.

Now that we are past the stage of trying to please everyone, we are truly focusing on what we do best, and we keep refining it. I recently turned in several bids with material only, knowing that we are hitting our deadlines on the material only jobs much, much faster than what we bid installed.

From contributor B:
I would recommend that you do everything that contributor W said. The only addition that I would make is that it is far easier to take this big step by starting with a small step, a part timer. There are a lot of people available who are retired or have some free time that could do many simple tasks like keeping the shop organized, helping with finishing, sanding, etc. They contribute a great deal with only 10-20 hours a week. But because they are part time they are far more flexible and you donít have to incur the stress of making sure there is 40 hours of work for them every week. This also gives you an opportunity to see what it is like being an employer and test the water.

From the original questioner:
Thanks for all the great advice. I've tried to stay small and subcontract out all my labor but I know it's time to finally take the plunge.

From contributor R:
My preference was to hire someone of equal skill to myself. That way when I was out of the shop, high level work could continue. Hiring a part-timer or a beginner will actually slow you down for quite a while. I tried to hire some beginners, but the ones I got in the shop would usually stop when I was out of the shop. I guess they thought I wouldn't notice? In those days, IL would give you 4 weeks on a new hire until they were considered yours for a claim of unemployment. My advice with one employee, though, is that he will make more money than you. Add a second employee and you will start to make as much as them, add a third and you start making more than they do. Make sure you know your state laws about workman's comp, withholding, etc. That's the stuff that really hurts! I shut my business down after 8 years because it was killing me. 70 to 80 hour weeks, so don't pay a lot of attention to my advice.