How to hire employees for your small business

You’ve been running your small business successfully for a while now, but operations are expanding and you can no longer keep up with the workload.

It’s time to delegate some of your work and hire employees.

Regardless of whether you’re hiring for the first time or you already have a small team, hiring employees for your small business can be a daunting (and expensive!) task. 

According to Glassdoor, the costs of hiring a new employee are around $4,000 for US employers. At the same time, 62% of small businesses admit that they’ve made a hiring error.

So, you need a new employee who will bring value to your company, but what often happens is that your new hire appears to be the wrong person for the job. 

And since you’re running a small business, every employee has a tremendous impact on your performance, culture, motivation, and team. An employee at this stage of your growth can make or break your company. It’s important to know how to choose the right person to join your team. 

In this article, we’ll discuss the basics of hiring your first employees, the importance of assessing candidates objectively, and how to use tests and assessments in the hiring process to find and recruit the best talent for your growing business.

The basics of hiring your first employee(s)

Most small businesses don’t have an HR team to do their recruitment. As a small business, you can choose to outsource the entire process, do everything by yourself, or a combination of both. 

However, the hiring process has its fundamentals, and it’s important to keep these in mind to avoid hiring a poor match for your company. 

Assess whether you need to hire an employee

The first step is a question you need to ask yourself: do you really need to hire an employee at this moment? 

Hiring an employee comes with its costs, including hidden onboarding costs like costs associated with paperwork, admin work, and deferred productivity. Therefore, you should first assess the current state of your business and see if you need a new employee for new operations. 

Many small businesses don’t bother to go through this stage, which might result in making unnecessary hires that don’t align well with the company’s current state of operations. Analyze your business operations and decide if you really need to hire an employee.

Also, you might want to consider different alternatives to hiring an employee, such as:

• Outsource specific tasks to a contractor

• Work with an agency 

• Hire a virtual assistant

• Hire an intern

What will suit your business best depends on your specific needs, which is the next thing you’ll need to define. 

Write a detailed job description

If you did the task above and reached the conclusion that you need a new employee, then the next task should be rather easy: writing a detailed job description. 

Because if you analyzed your business and decided that there’s truly a need for a new hire, then you already know what the person should be doing in your company. 

All that’s left is to write a specific and detailed job description, which you’ll later use for your job ad. 

It’s essential to be as detailed as possible in your job description for a few reasons:

• You’ll gain clarity on the things you need to delegate

• Your prospective candidates will instantly know what’s expected of them to succeed at the job

• You’ll attract the right applicants for the role, who have the necessary skills and qualifications

Avoid vague formulations or unrealistic requirements and be as precise as possible.

Consider the legal aspects of hiring a new employee

There are legal standards that you should fulfill when it comes to hiring a new employee. 

Here are some of the things you’ll need to do to hire an employee: 

• Perform reference and background checks

• Register with the relevant state or national agency or institution

• Keep track of taxes you’re withholding

• Fill out key forms for hiring new employees (in the US, examples include I-9, W2, W4, etc.)

• Set up a payroll system

• Adopt the correct safety measures

The specifics will depend on your exact location and local labor laws, so make sure to research them in detail before you make a hire. Consult with an attorney if you have any doubts about the process, to make sure you’re on the right track and handling everything correctly. 

Post a job ad and promote your opening

You have to market your new opening so that prospective candidates can know that there’s a demand for their skills. 

LinkedIn, along with other job-seeking websites and boards, can help with this process, but you can also use word-of-mouth marketing tactics to find qualified candidates. It’s actually one of the preferred methods of finding suitable applicants for small businesses. 

Assess candidates’ skills to make the right hire

A key element to hiring your first employees is the accurate assessment of their skills and expertise, in order to find out who is the best possible match for your company.

As a small business owner, you have little leeway for hiring errors, so it’s important to use a tried-and-tested strategy for the pre-employment skills assessment stage of the recruitment process. 

One of the best ways to evaluate potential employees’ abilities is by using online pre-employment skills assessments. In one assessment, you can combine up to five tests, each evaluating a different skill. For example, you can use a combination of: 

• Role-specific skills tests

• Language tests

• Cognitive ability tests

• Software skills tests

You can even use personality and culture tests to assess your candidates’ behavior, personality traits, and culture add potential with a Culture Add test. 

Skills testing allows you to objectively measure your candidates’ job performance potential, compare between applicants, and limit unconscious bias. As a result, you’ll be able to make the right decision and hire the perfect fit for your small business. 

How to assess your candidates’ skills

There are a number of ways to assess your candidates’ skills during recruitment, including:

• Job simulations

• Sample tasks

• Job trials

• Interviews, including one-way video interviews

• Pre-employment skills tests

These five tools can help you significantly improve the quality of hire, and each can have its role in the recruitment process, based on the role you’re hiring for—and the time you’re able to spare. 

If you’re like most small business owners, however, you’re likely already very busy (which is why you’re also looking to make a new hire, right?), so chances are that you need to use the most efficient way to evaluate applications.

Why skills assessments are the best way to screen candidates

For the best results, we recommend using a combination of a few tools, and starting with online skills assessments at the top of your hiring funnel. 

You can combine up to five skills tests in a single assessment, and you can choose from a number of categories, based on the needs of the role you’re hiring for. 

You can also mix and match tests from different categories, such as Cognitive ability tests, Language tests, Programming skills tests, Personality and culture tests, or Role-specific skills tests, for example.

This means that you can give candidates specific tests based on your industry and company needs. For example, you can use skills tests whether you’re hiring: 

• A customer care agent who needs to be fluent in Portuguese and know the ins and outs of Zendesk CS

• An app developer and you need to assess their Python coding skills, or know whether they have the right knowledge of Flutter

• A team leader who can make good business decisions and has solid leadership and people management skills. 

Whatever the role you’re hiring for is, a skills assessment will help you evaluate candidates’ skills and abilities without biases and without the need to rely on “gut feeling”.

TestGorilla can help you out with the hiring process by: 

• Reducing the time-to-hire

• Making the recruitment process less costly

• Predicting future job performance accurately

• Enabling you to make data-driven hiring decisions

Our tests and assessments grade your candidates objectively and they’re made by vetted subject-matter experts. Our platform is easy to use and you can even use it to make custom video response questions. 

Why is it important to assess candidates’ skills in the hiring process?

It’s crucial to assess your candidates’ skills objectively when hiring new employees for your small business.

In this section, we’ll look at two of the key reasons why this is important: 

1. To eliminate biases

When it comes to hiring, biased decisions can cause a lot of problems, especially because biases are most often unconscious—meaning that we cannot simply decide to not be biased. And there are many different types of bias, too.

One of them is the Halo effect. It’s a cognitive bias that (positively) warps our perception of the person according to their other related traits. 

An example, especially relevant in hiring, is of a hiring manager seeing an attractive, well-groomed person and thinking that they’re capable and knowledgeable. The Halo effect is quite well documented in hiring and it stems from the way we use “gut feeling” to assess candidates. 

There are many other biases prevalent in the hiring process, including: 

• First-impression bias

• Cultural bias

• Gender and racial bias

• Non-verbal bias

• Confirmation bias

• Recency bias

• Anchoring bias

The best way to reduce bias in the hiring process is to use objective measurements. 

When you rely on gut feelings about a candidate, you can easily make an error in judgment. But if you’re assessing all applicants according to the same, consistently objective scale, then you can eliminate bias.

2. To streamline the hiring process

The efficiency of the hiring process is measured by different metrics such as cost per hire, time to hire, source of hire, offer acceptance rate, and various surveys from hiring managers and peers.

For an efficient hiring process, you need to make sure you can:

• Minimize manual work as much as possible

• Use an objective method to measure candidates’ skills

• Provide excellent candidate care to attract the best talent

With online skills assessments, you can do all of these things, and reduce the time to hire significantly. 

Make the best hire for your small business with online skills tests

With a reliable online skills testing platform like TestGorilla, you can speed up and improve the hiring process significantly, make accurate predictions both on candidates’ future job performance, and even assess their language proficiency or situational judgment skills, among many others.

With our platform, you can also evaluate whether your candidates’ values align with yours with our Culture Add test, or see whether their expectations match your job offer, based on a customized survey and the candidate both you fill out with our Motivation test.

In short, skills tests allow you to efficiently streamline the hiring process and source the best talent for your small business without sacrificing too much of your time (and money).

Get started for free today.