Employing For The New Business
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Once the entrepreneur obtains the needed finances to start his/her new business, s/he can now begin to hire employees. Hiring employees for a new business can be quite a difficult task since it requires the same amount of time and dedication as developing the business proposal and the process of raising capital. However, before recruiting anyone into the new business, the entrepreneur needs to understand the hiring process:

1. Determine the number of employees needed
The first step in hiring staff for a new business is determining the number of employees that are needed. This is crucial for a company since each staff member requires a salary, benefits, and employer liability. The entrepreneur also needs to decide on the qualification requirements for different positions within the company. The new business owner also needs to make sure that the new hire(s) has/have the necessary educational qualifications and matches the working style required for the new company. Working for a start-up company requires a lot of hard work and can be very challenging; therefore, the entrepreneur needs to find people who share the vision and are committed to the work.

2. Advertising a Job Opening
A new business owner who is interested in hiring new employees must use all available resources in recruiting the best possible candidate. By placing job postings in the local paper and on numerous online web-based job sites, the employer can definitely increase the pool of qualified applicants. They can even attend job fairs to recruit potential candidates. In order to assess which candidate qualifies most for a particular job, the new business owner must meticulously compile a list of requirements in an employment ad, including education and work experience. The most qualified candidates should be invited to get interviewed.

3. The legal obligations in hiring
There are no mandatory legal requirements in posting an employment ad; however, the new business owner must abide by several state and federal guidelines in order to avoid unfair hiring practices. For example, The Equal Employment Opportunity Act prohibits discrimination in the workforce against race, gender, age, religion, sex, and disability. The Fair Credit Reporting Act states that an employer must obtain written consent by the applicant before a credit check can be administered. The Bankruptcy Act prohibits the discrimination of employees who have applied for bankruptcy. The employer must become familiar with all of these acts when conducting a prospective candidate’s background check in order to avoid legal problems and discriminatory practices.

4. Due diligence by checking references
Often times, employers will ask the job applicant to provide at least three sources of references. These references are a vital tool in determining if the applicant is qualified for the job. By failing to conduct a thorough background and reference check on each candidate, the business will not only be at risk for negligent hiring but it may also create some form of legal liability when violent or serious acts are committed by the employee in the workforce.

In addition, negligent hiring can lead to high employee turnover, increased office absenteeism, and eventually, poor company reputation. In order to avoid such problems, employers must always check references, as well as verify the educational background and job experience of the applicant. Checking a prospective applicant’s references also allows the employer to directly speak to a candidate’s past and/or present supervisor in order to validate any information that is presented and to better determine if they are qualified for the job.

If the employer does not have the resources to prescreen an applicant, they can utilize many of the available pre-employment screening services when recruiting a new hire. These services conduct a background check and a social security check on the potential applicant. Unlike business practices in the past, an entrepreneur cannot undertake the prescreening process without written permission from the potential candidate.

5. Consider the cost of hiring a new employee
Nowadays, it costs money to recruit, hire, and train employees. A recent study revealed that on average, companies spend at least $4,000 during the hiring process. This amount takes into consideration the time spent on developing a job description, advertising the job opening on and offline, responding to resumes, conducting telephone interviews, performing in-person meetings, and the administrative paperwork in hiring the lucky candidate. This hiring process is repeated each time a vacant position needs to be filled and costs associated with this process add up very quickly.

6. Gut instinct can be both good and bad
Instinct plays a very important role in determining the credibility of an individual. However, it should not be the only factor that is taken into consideration during the hiring process. An employer may feel confident that a certain candidate is well-qualified for a position based on the in-person interview but should not dismiss other candidates quickly. How a person may come across in person may not match their ability to perform their job duties. This is why the entrepreneur should not make their instinct the decisive factor in hiring an employee. Thorough background and reference checks, as well as follow-up interviews are all needed in deciding if a candidate qualifies for a job.

7. A solid hiring plan
Entrepreneurs need to develop a hiring plan at the same time they develop the business plan. This will help them budget the new business as well as enable them to line up a management team with impressive bios. A solid hiring plan is also very important to an entrepreneur who does not have experience in the business area. By hiring an impressive management team with a proven track record of success, the entrepreneur can convince a business investor that he or she is committed to the project and has the necessary skills to sustain a business and produce or increase profitability.

The hiring process of a new business takes ample time and preparation in order to recruit the best-qualified candidates. The entrepreneur first needs to determine how many employees they plan to hire and which job positions need to be filled. After posting employment advertisements and reviewing resumes, the employer should abide by the legal guidelines when hiring new employees. This includes the applicant’s consent for prescreening. The entrepreneur of the new business also needs to inform a candidate of their status, including the reasons for rejection due to any information obtained through the pre-employment screening process. By law, the candidate can contest this information.

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