When is the right time to hire your first employee?

Updated: Feb 6

Have you been postponing launches because you’re feeling stretched?

Have you identified a new opportunity but don’t have the time to pursue it?

Have you identified a gap in your own skill set and you need help in a specialty area?

Are you’re struggling to keep up with deadlines or admin tasks?

Maybe you just want to be able to take a holiday.

Do any of these sounds familiar?

Chances are you have at least thought about the help you could get by having an employee.

Hiring your first employee is a big decision and there is a lot to consider. If you find yourself at this point here are my 3 steps to consider before placing the job advertisement.

1. Capacity

You’ve arrived at a place where you can no longer do all the things you need to do in your business yourself.

An employee can assist in lightening you load, but your first step is to decide on what tasks will help you the most. Will they take over admin functions to help make you more productive? Or will they work with your customers to help bring in more income? What can take the pressure off you and what will make the most impact on income? Are there any additional skills that would be useful to have in house?

Start by looking at everything you do in your business. Write down it all down in 15/30 minutes increments each day for a week to get an idea of how your time is spent. This activity will show you what will help you the most and give you a good idea of the number of hours you will need the employee to work to complete those tasks. You are beginning to design a job which will feed into a Job Description down the track.

2. Budget

The next thing to consider is your budget and conduct a cost benefit analysis.

Now that you know what type of job you’re offering, consider what Award it would fall under and what pay rate applies. Calculate what you will be paying them and ensure it fits into your budget.

Remember, the real cost of an employee if more than just paying them each week:

Employing someone will undoubtedly add to your expenses, but a cost benefit analysis activity asks you to compare the additional costs versus the additional income that can be made by the work they will complete. A new employee should assist your business in making more money. So, you want to know how productive they will be, and you could even set sales targets for them.

3. Structure

So, you have the need and know you can afford the cost…the next thing is to think about what type of job you will offer. Your options are:

  • Permanent (either Full Time or Part Time hours)

  • Temporary (either Full Time or Part Time hours) or;

  • Casual

As it sounds, permanent means you are offering an indefinite contract of employment. To end it, you may need to give notice and a reason.

Whereas temporary employees are employed for a particular period of time only. There is a start and end date, so employment simply ends on the end date. This might suit if you have a particular project to be completed by a deadline or have been given a grant for example.

Both Full and Part time employees are contracted for a defined number of hours each week and do accrue paid leave. This means there may be times you’ll pay them even when they aren’t being productive, such as Annual Leave and Public Holidays.

Casual employees are completely different as you give no commitment to regular hours, nor any agreement of ongoing work. They are simply called in when needed. They do not get any paid leave but do get paid a slightly higher hourly rate.

If it is your first time hiring an employee and you’re unsure if you can afford it or how many hours you need, try Casual first. This allows you the flexibility to only give them work when you can afford it. Casuals can always be converted to Full or Part time down the track.

If you’re still not feeling sure, there are other options:

  • Try hiring a sub-contractor - someone with an ABN to pay by invoice instead of wages to again lessen the obligation of continued work

  • Try hiring a Trainee - save on wages by paying a lower hourly rate, if hiring someone less experienced will still benefit you

  • Access a wage subsidy - there are multiple wage subsidies available from the Australian Government depending on your situation. We’ve got a handy factsheet with all the info in one place – check it out here

Trusting your business in the hands of someone new can feel like taking a huge leap of faith so recruiting the right person can be that much more important in small business. There are lots of options, but if you would like support and advice navigating this, get in touch. We would love to help you find the right fit for your first employee.


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