Staff and Salary
Sooner or later eventually the time arrives where you have to hire somebody to help you. You will need to prepare a couple of things before posting a “Help wanted” ad on your website or in the local newspaper.
Take some time and create a detailed job description – not for the ad, but for yourself. Think about everything you want the employee to work on. The duties and requirements of the position needed to be laid out properly. This will give you a good impression of what you need to expect from the future team member. It will also give the employee an idea of what is expected from him/her. One of the biggest mistakes made when hiring employees is different expectations from both side – because of a missing job description. Avoid these mistakes by doing your homework – before you hire.
You also need to decide if you want a contractor or a real employee to join your team. Both options offer advantages and disadvantages. If the contractor isn’t operating as a company, you will want him to fill out the IRS 1099 form. The contractor is responsible for paying his own taxes – not you. Employees get the W2 form instead at the end of each year to report their income. You are responsible for deducting the tax from the employee’s paycheck and to send it to the IRS. You are most likely also responsible for paying money for the social security, workers comp, and for unemployment. Check with an account / lawyer and eventually consider hiring a payroll company to take of everything for you. Other things to consider are:
1) Term of contract (open or limited time – e.g. 3 months)
2) Benefits for employees (health insurance, etc.)
3) Job requirements / responsibilities
4) Probationary period
6) NDA / Non compete clause (check with a lawyer to make sure it is legal in the area you live in)
Contract – you will need a very clear and detailed contract that specifies what is required from the employee and what is expected from you. The contract should list everything that might need to be regulated this way. Check with a lawyer and also do your research. Every state might have different requirements. Your local SBA office will eventually be able to help you. http://www.nolo.com has also some very good information available. The whole topic is very complicated if you have never done it before. Be safe – take your time and rather hire a professional (personnel or outsource) to avoid mistakes.
Besides all the legal stuff – you also have to make up your mind of what kind of pay you can offer your employee. The web hosting industry has different models in use right now. For support technicians the pay can either be per ticket or salary-based. Or it can be a combination of both. If you pay your staff per ticket, you will also come up with a scheme for easy tickets (less work) and for more difficult tickets (more time consuming). Our research has shown prices per ticket ranging from $1.25 to $2.50 per ticket. You can also add incentives for tickets answered within a certain time after the customer has submitted the ticket. As faster the tickets are answered, the better your company looks to the customer. Speedy customer service is a definite plus. You will need to put into consideration where the employee will be located. Somebody in a rural area has fewer costs of living compared to somebody living in New York City as an example. If you want to keep good employees you need to make sure that the salary is adequate and fair. You could offer frequent pay increases to motivate the employee or contractor to do better work.
If you need to hire a system administrator, you will look at a higher cost. Depending on how much help you need, you eventually should start out with hiring somebody hourly-wise. This will keep your cost low and gives you time to see how the admin performs. If you find a good administrator and your finances allow hiring him, it might be a step to consider. Highly skilled and motivated employees are worth their money. Your business reputation will depend on those people, too. Selecting the right staff is important. Salary-wise – hourly pay for administrators can rank from $20.00/per hour to $90.00 per hour. Eventually a service contract will be an option for the beginning. This will give you a certain amount of time of the administrator at a fixed cost.
Motivation: Motivate your employees. A small bonus here, or an Amazon.com gift certificate here, will do a lot to keep the employee motivated. Research has shown that these small motivational things do much more good for your business, than the one-time raise a year. If your employees work in an office location – have a Pizza Day once a month/week and eventually offer free pop (Coke, Mountain Dew, and Sprite).
The hiring process: Once you receive the resumes of the applicants, make sure you take the time to read them carefully. There are several different approaches for this and you will need to figure out which one works best for you. You can sort the resumes by level of experience. Newbies might not have experience, but they might be much more motivated and willing to learn. They also ask for less money. But – they might leave your company soon once they have some experience under their belt. Now they are able to make more money somewhere else. More seasoned applicants need less supervision and less training. The return of investment (the salary) for you is probably higher – at a price (higher salary). Make sure you ask for references and do check them, too.
Hiring is one of the toughest elements of small business management. Determining what talent a business needs to succeed, then finding the time and know-how to recruit these people is a real problem for many entrepreneurs. Successful hiring can be expensive and time consuming. Unsuccessful hiring can be disastrous for your company’s health.
Markets change. The information provided here might not match the market and location where you are located. Do thorough research and don’t be shy hiring professional help for this important step.