Read Start Your Own Business Online
Authors: Inc The Staff of Entrepreneur Media
Start Your Own Business (58 page)
Your candidate’s responses will give you a window into his or her knowledge, attitude and sense of humor. Watch for signs of “sour grapes” about former employers. Also be alert for areas people seem reluctant to talk about. Probe a little deeper without sounding judgmental.
Pay attention to the candidate’s nonverbal cues, too. Does she seem alert and interested, or does she slouch and yawn? Are his clothes wrinkled and stained or clean and neat? A person who can’t make an effort for the interview certainly won’t make one on the job if hired.
Finally, leave time at the end of the interview for the applicant to ask questions—and pay attention to what he or she asks. This is the time when applicants can really show they have done their homework and researched your company ... or, conversely, that all they care about is what they can get out of the job. Obviously, there is a big difference between the one who says, “I notice that your biggest competitor’s sales have doubled since launching their website in January. Do you have any plans to develop a website of your own?” and the person who asks, “How long is the lunch break?” Similarly, candidates who can’t come up with even one question may be demonstrating that they can’t think on their feet.
FAMILY AFFAIRW
ant to get good employees and tax savings, too? Consider putting your family members to work for you.Hiring family, especially children, enables you to move family income out of a higher tax bracket into a lower one. It also enables you to transfer wealth to your kids without incurring federal gift or estate taxes.Subject to applicable child labor laws, even preteen children can be put to work stuffing envelopes, filing or sorting mail, says Daniel Hart, a tax and estate planning attorney with Turner Padget Graham & Laney in Florence, South Carolina. If a child’s salary is reasonable, it is considered earned income and not subject to the “kiddie tax” rules that can apply to anyone under the age of 23. And if your business is unincorporated, wages paid to a child under 18 are not subject to Social Security or FICA taxes. That means neither you nor your child has to pay these taxes. Finally, employed youngsters can make tax-deductible contributions to an individual retirement account.Be sure to document the type of work the family member is doing and pay them a comparable amount to what you’d pay another employee, or the IRS will think you’re putting your family on the payroll just for the tax breaks. Keep careful records of time worked, and make sure the work is necessary to the business.Your accountant can suggest other ways to take advantage of this tax situation without getting in hot water.
End the interview by letting the candidate know what to expect next. How much longer will you be interviewing? When can they expect to hear from you? You are dealing with other people’s livelihoods, so the week that you take to finish your interviews can seem like an eternity to them. Show some consideration by keeping them informed.
During the interview, jot down notes (without being obvious about it). After the interview, allow five or ten minutes to write down the applicant’s outstanding qualities and evaluate his or her personality and skills against your job description and specifications.
Checking ReferencesAfter preliminary interviews, you should be able to narrow the field to three or four top candidates. Now’s the time to do a little detective work.
It’s estimated that up to one-third of job applicants lie about their experience and educational achievements on their resumes or job applications. No matter how sterling the person seems in the interview process, a few phone calls upfront to check out their claims could save you a lot of hassle—and even legal battles—later on. Today, courts are increasingly holding employers liable for crimes employees commit on the job, such as drunk driving, when it is determined that the employer could have been expected to know about prior convictions for similar offenses.
AHA!Looking to fill an important position, but dreading the hassle of hunting for candidates? Executive recruitment firms, also known as “headhunters” or search firms, can find qualified professional, managerial or technical candidates for you. Search firms typically charge a percentage of the executive’s first-year salary.
Unfortunately, getting that information has become harder and harder to do. Fearful of reprisals from former employees, many firms have adopted policies that forbid releasing detailed information. Generally, the investigating party is referred to a personnel department, which supplies dates of employment, title and salary—period.
There are ways to dig deeper, however. Try to avoid the human resources department if at all possible. Instead, try calling the person’s former supervisor directly. While the supervisor may be required to send you to personnel, sometimes you’ll get lucky and get the person on a day he or she feels like talking.
Sometimes, too, a supervisor can tip you off without saying anything that will get him or her in trouble. Consider the supervisor who, when contacted by one potential employer, said, “I only give good references.” When the employer asked, “What can you tell me about X?” the supervisor repeated, “I only give good references.” Without saying anything, he said it all.
Depending on the position, you may also want to do education checks. You can call any college or university’s admissions department to verify degrees and dates of attendance. Some universities will require a written request or a signed waiver from the applicant before releasing any kind of information to you.
If the person is going to be driving a company vehicle, you may want to do a motor vehicle check with the department of motor vehicles. In fact, you may want to do this even if he or she will not be driving for you. Vehicle checks can uncover patterns of negligence or drug and alcohol problems that he or she might have.
If your company deals with property management, such as maintenance or cleaning, you may want to consider a criminal background check as well. Unfortunately, national criminal records and even state records are not coordinated. The only way to obtain criminal records is to go to individual courthouses in each county. Although you can’t run all over the state to check into a person’s record, it’s generally sufficient to investigate records in three counties—birth- place, current residence and residence preceding the current residence.
SAVEWhenever possible, look for employees you can crosstrain for different jobs. A welder with college courses in engineering and a secretary with human resources experience are workers one business owner has successfully cross-trained. Cross-trained employees can fill in when others are absent, helping keep costs down.
For certain positions, such as those that will give an employee access to your company’s cash (a cashier or an accounting clerk, for instance), a credit check may be a good idea as well. You can find credit reporting bureaus in any Yellow Pages. They will be able to provide you with a limited credit and payment history. While you should not rely on this as the sole reason not to hire someone (credit reports are notorious for containing errors), a credit report can contribute to a total picture of irresponsible behavior. And if the person will have access to large sums of money at your company, hiring someone who is in serious debt is probably not a very good idea.
Be aware, however, that if a credit check plays any role in your decision not to hire someone, you must inform them that they were turned down in part because of their credit report.
If all this background-checking seems too time-consuming to handle yourself, you can contract the job out to a third-party investigator. Look in the Yellow Pages for firms in your area that handle this task, or Google “background checking.” A criminal check can cost as little as $20; a full investigation averages $50. There are even better deals online, so be sure to shop around. It’s a small price to pay when you consider the damages it might save you.
After the HireCongratulations! You have hired your first employee. Now what?
As soon as you hire, call or write the applicants who didn’t make the cut and tell them you’ll keep their applications on file. That way, if the person you hired isn’t the best—or is so good that business doubles—you won’t have to start from scratch in hiring your second employee.
For each applicant you interviewed, create a file including your interview notes, the resume and the employment application. For the person you hire, that file will become the basis for his or her personnel file. Federal law requires that a job application be kept at least three years after a person is hired.
Even if you don’t hire the applicant, make sure you keep the file. Under federal law, all recruitment materials, such as applications and resumes, must be kept for at least six months after the employment decision has been made. In today’s climate, where applicants sometimes sue an employer who decides not to hire them, it’s a good idea to maintain all records related to a hire (or nonhire). Especially for higher-level positions where you narrow the field to two or three candidates, put a brief note or memo in each applicant’s file explaining why he or she was or wasn’t hired.
The hiring process doesn’t end with making the selection. Your new employee’s first day is critical. People are most motivated on their first day. Build on the momentum of that motivation by having a place set up for them to work, making them comfortable and welcome. Don’t just dump them in an office and shut your door. Be prepared to spend some time with them, explaining job duties, introducing them to their office mates, getting them started on tasks or even taking them out to lunch. By doing so, you are building rapport and setting the stage for a long and happy working relationship.
“I think people
who have a real
entrepreneurial spirit,
who can face difficulties
and overcome them,
should absolutely
follow their desires.
It makes for a much
more interesting life.”—MARTHA STEWART,
FOUNDER OF MARTHA STEWART
LIVING OMNIMEDIA
The traditional full-time employee is not your only hiring option. More employers are turning to alternative arrangements, including leased employees, temporary employees, part-timers and interns. All these strategies can save you money—and headaches, too.
Leased EmployeesIf payroll paperwork, personnel hassles and employee manuals sound like too much work to deal with, consider an option that’s growing in popularity: employee leasing.
Employee leasing—a means of managing your human resources without all the administrative hassles—first became popular in California in the early ’80s, driven by the excessive cost of health-care benefits in the state. By combining the employees of several companies into one larger pool, employee leasing companies (also known as professional employer organizations, or PEOs) could offer business owners better rates on health-care and workers’ compensation coverage.
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