Congrats, you hired your first employee! That’s certainly cause for celebration, but it also comes with its own challenges. How do you handle going from a business of one to a team of two or more? We’ve put together some advice on where to focus as you take on the role of employer.
Focus on the business, not ‘in the business’
When you first started running your business, you probably weren’t eagerly awaiting the day you’d get to dive into payroll and all the other tasks that go with it. And rightfully so, since doing so takes up a lot of time. That’s time that could be better spent on tasks that you’re uniquely qualified to do.
An Entrepreneur survey found that one of the biggest challenges that business owners face is “being the visionary”, that single person who is responsible for thinking and deciding on the future of the business. That gets all that much harder when you have to spend your time making sure the books are balanced and everyone has been paid appropriately.
Luckily, we’re living in a time when entrepreneurs have more time-saving options at their disposal than ever before, from schedule management to payroll automation. You don’t need to do everything yourself anymore, and you actually shouldn’t be trying to if you can find a better solution. In fact, USA Today columnist Rhonda Abrams says that simplifying should be a top resolution for small business owners in 2018.
Think long-term and know that time is money
Business owners are always looking for ways to optimize the return on any investment they make in their business. This thriftiness is often the difference between a profitable month, and one where they’re forced to take a look back at what could have been done better.
The downside is that focusing on cost savings means you might overlook opportunities to be way more efficient if the solution will cost money. Finding an effective solution for managing operations, like payroll, ends up saving you money up front and especially down the road, including:
- Avoiding penalties from incorrect payroll management. One in three businesses are penalized for mismanagement of payroll according to Inc. Don’t be part of that 33%.
- Saving the cost associated with your time spending countless hours on tasks that is not your strength. Business owners spend up to two weeks of their year on purely administrative tasks related to back-office and payroll. Why not give yourself a vacation instead?
Provide a first-class employee experience
Let’s be honest, paying your employees is the absolute bare minimum in terms of providing them with an experience that makes them feel valued and excited about working for you. As an employer—and more importantly, a leader—you want to make sure you’re not cutting any corners for your team members when it comes to their livelihood.
First, while some employees may not have a problem with cheques, many prefer a choice between cheque and direct deposit. So make sure you have an easy and efficient system in place for direct deposit.
Second, employees expect to be paid correctly, and on time—everytime. Period. Through automation, you can make sure that you deliver a consistent experience for your team, even if you’re on vacation, in the middle of crunch time, or just plain forgetful.
Finally, having an accessible record for your employees makes you look professional and creates seamless experience for them when they want check their pay stubs.
Give away your Legos
Once you’ve hired your first employee, you need to be open to trusting and collaborating with those you hire. This means giving up some of the tasks that you may have held near and dear to your heart. If your company is scaling fast, your role as owner may change often and in fundamental ways. This means taking a hard and honest look at what the tasks are in the business that only you can do, and what are the areas of the business that can be done by your new team members.
FirstRound capital suggests that in a growing business, you may be forced to ‘give your job up’ every quarter to focus on new, higher-priority tasks and find others on your team who can step into the role you previously had. Molly Graham, the COO of Quip, calls this process ”giving away your Legos.” You brought your new team members onto the team for a reason, and it’s not so they can watch you continue to do everything.
Bet on change
You’ll always have to deal with change when it comes to properly managing employees. Employment and tax laws are subject to change, and when they do, will have an impact on how you manage your payroll operations.
If you’re using a payroll provider, make sure you choose one that’s consistently doing research and compliance testing, so you don’t have to spend your valuable free time studying up on the tax code.
Hiring your first employee is a big milestone. It means your business is doing well, and it also means you’re going to grow your skills as a leader. Make sure you’re set up for success, and enjoy the ride!
The information and tips we’re sharing in this article are meant to be a starting point for your year-end tax prep, so you can be informed and feel confident when working with your accountant. Be sure to check with a tax expert in your country or region for any specific advice you need, as each business (and tax district) is different. As our lawyers would say: “This article is for informational purposes only. It should not be considered legal or financial advice.”