How to hire your first employee
Building a new business or start-up is filled with many exciting milestones; registering the business name, seeing your website go live, making your first sale. As your business starts to grow and progress, you’ll soon hit a milestone that typically strikes both excitement and fear in business owners – hiring your first employee.
In an established business with 10 or more staff, hiring decisions are usually a simple process of identifying a skills or capacity gap, and then recruiting someone to help fill that missing puzzle piece. However, for a new business or start-up, hiring new staff can feel like you’re trying to find a puzzle piece without even having seen the final image you need to create.
It’s a unique situation, and one that bears significant relevance to your business success. So how do you hire your first employee? How do you know what type of employee you need? Let’s start by identifying and analysing the hats in your business – stay with me, it will all make sense shortly!
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Hiring your first employee: Who should I hire first?
For new businesses or start-ups, this question can be quite daunting. You know the business is growing and you need help, but what kind of help do you need? Who can give you that help?
The general guidance I often give our start-up clients is this: when hiring your first employee, you are not necessarily adding completely new capability. During these early days of business expansion, you are instead separating capability out, and staffing it with people who have more expertise in that space.
Confused? Let me break it down – here comes those hats I was talking about.
Imagine you have two people in your organisation – you and one other partner. Each of you are wearing a lot of ‘hats’ and are responsible for a variety of functions. For example, you could be managing marketing, customer service and dispatch, along with being the owner-manager, all on a daily basis.
In order to determine your first hire, you need to isolate each of the ‘hats’ you wear (marketing, customer service, dispatch as per our example) and ask yourself:
Which ‘hat’ is expanding the most rapidly? Which areas of the business are growing the fastest?
Which ‘hat’ needs the most skills and specialised knowledge? Which areas of the business need the biggest injection of expertise?
Which ‘hat’ can you hand over to a new employee, and what area of the business is best retained by current personnel?
Once you have answered these questions, you should have a pretty good idea of where this new hire is going to contribute best to the business.
Now it’s time to break down this new role even further and start to design how your workforce is going to be shaped.
Hiring your first employee: Other considerations
So now you know what ‘hats’ you want these new hires to wear and what part of the business you need them to contribute to.
In order to ensure your new employee brings the success you are hoping for, there’s a few more things you need to consider before writing up that job ad.
Skills Gap Analysis
It’s a good idea to first conduct a detailed skills gap analysis of your current business.
Define: Skills Gap Analysis
The difference between the skills/competencies an employee has, and the skills/competencies required to successfully perform a role.
To do so, first review the skill set of your present team - this includes you! Separate what you and your team like/enjoy, versus what you and the team are skilled/good at. Take the time and honestly reflect on your experience and where your strengths lie. Try and not be tempted to emphasise what you enjoy at the expense of the business and what it needs.
From here, you should then be able to identify certain skills/capabilities that need more time and expertise. Narrow your focus on these elements even further and isolate any skills gaps that have the greatest impact on the company as a whole. This is a strong indicator of where your next hire needs to excel.
Hiring for the future, as well as today
The next step is to compare your identified skills gaps, against your business needs for the future. There’s no need for a crystal ball though, the key is simply to avoid hiring skills that aren’t going to exist in the near-future.
For example, say you have identified a skills gap in your accounting function. Logically, it might make sense to hire a mid-tier accountant to fill that gap. However, as the business grows, it’s likely you will need a Finance Manager, backed by a bookkeeper, to manage the department instead. A mid-tier accountant is not able to perform either of those roles, and therefore would not be a good hiring decision as your business expands.
This should also be taken into consideration for roles that will eventually be split – for example, a front and back-end developer. Rather than hire a jack of all trades (which can be tempting!), I typically advise clients to hire someone who is better at one over the other. That means when the time comes to split the role, you can specialise the individual and their responsibilities.
By looking to the future and making educated predictions on how your business will expand, you can avoid some costly recruitment mistakes down the line.
Personality is key
While skills and capabilities are important, it’s also essential to take into consideration the personality of your first hire. Working for a new business or start-up brings along its own unique set of challenges, and your first employees need to be ‘cut from a different cloth’ (or so to speak) in order to be successful.
One personality trait to look out for is a slightly higher risk profile. Some employees become genuinely concerned about their job security in smaller companies, which can lead to a wandering eye as they look for a workplace they consider to be ‘more stable’.
You obviously want your new employee to stay with the business long-term, so would recommend hiring someone who has a small business background and experience.
Cost and Seniority
Finally, one of the last areas to consider is the seniority of your new hire. As you know, cost and seniority go hand in hand, so it’s important to make an accurate evaluation of the financial status of your business. The goal is to maximise your capacity, while also spending within your means.
If you have the funds, find a new hire who can manage a whole section of the business relatively independently. This helps to increase you and your employees’ capacity immensely, giving you back the time you need to focus on other parts of our business. A good example would be hiring a senior employee to manage marketing or sales.
Alternatively, if you are more cost sensitive, then find a more junior employee who can assist with easy-to-moderate tasks that are time consuming and repeatable. Again, this helps to free up capacity in your business, allowing for growth and expansion.
Hiring your first employee can be both an exciting and daunting experience, and shouldn’t be a decision you make lightly. Take the time to really analyse your business needs, and ask yourself:
Think about the hats in your business – which hats are growing the fastest and need more specialist skills?
Conduct a skills gap analysis – what do you enjoy versus what are you good at?
Think to the future – will this new role change over time?
Be realistic about your finances – how can you maximise capacity while spending within your means?
Follow these guidelines for your next hiring decision and start planning your organisational structure for success.
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If you need assistance managing this process, or have any questions about how to successfully hire your first employee, contact Melbourne HR for a free consultation and quote.
David Simpson is the founder and Managing Director of Melbourne HR
Edited by Nicole Torrington, Marketing Manager at Melbourne HR.
