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5 Things to Know Before Hiring Staff for Your Small Business

By Serena Solomon | September 24, 2014 8:20pm
 Jessi Green is the founder of social media consulting firm NYC Collective. She sought the advice of a mentor when trying to decide if she should hire help.
Jessi Green is the founder of social media consulting firm NYC Collective. She sought the advice of a mentor when trying to decide if she should hire help.
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NYC Collective

NEW YORK CITY — The thrill of attracting five new clients in as many months to her social media consulting business NYC Collective came with a touch of panic for founder Jessi Green, 29, who launched the business last December.

Who would she hire — and trust — to help shoulder the load of blog posts, content strategy and social media campaigns needed for the fashion brands Green represents? Should she bring in contractors or full-time staff? How about legal and taxation issues?

“I don’t know how anyone has done this without someone leading them who has done this before,” said Green, who has enlisted a mentor, an older and wiser businesswoman, to guide her through the growing pains.

Experiencing fast growth early on isn’t the worst thing that could happen to a business. While bringing on additional hands can help a business grow, many founders are caught off guard by the amount of administrative work it takes to get a first round of hires, according to human resource and small business consultants. 

Here are some areas to consider when bringing on staff:

Do You Really Need to Hire?

A small business should consider hiring help if "they can't keep up with the demands from customers," said Ann Maynard, a human resource consultant of 17 years.

With a new client Maynard weighs the company's financial position against its business plan, or where it wants to be in five years, to determine what hires are sustainable.

A single big order or project doesn't mean a business is ready to go on a hiring rampage, according to David Rudofsky, a small business consultant based in New York City.

"You have to be mindful if it is a permanent increase in business before [you] hire permanent staff," he said, adding that an assessment also needs to be made as to whether the current staff is being fully utilized.

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Hire Slowly

One of the biggest mistakes a small business makes when hiring its first round of employees is that it brings on too many, according to Maynard.

A business can find temporary help but if it needs to let go of permanent staff early on, it will damage the brand, she said. 

"If you are in this community that is really welcoming of small business and you downsize, that hurts your relationship with the community, employees and customers," Maynard said.

Develop Your Leadership Skills

After successfully running her own nightlife and lifestyle blog, Green started NYC Collective because she thought she might be good at social media. It turns out she was very good at it, growing her first client's following on Twitter, Facebook, Instagram and Pinterest by 834 percent. Green's natural talent helped her business take off, but she needed management training to keep it healthy and growing.

 Many businesses are caught off guard by the administrative work it takes to get a first round of hires.
Many businesses are caught off guard by the administrative work it takes to get a first round of hires.
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"A lot of them [founders] started the business because they are good at something and then they realize 'I don't need to just be good at something, I need to manage people,'" said Lynda Zugec from The Workforce Consultants. Zugec has 20 years experience in human resources.

Zugec said founders don't anticipate the amount of managing they will do as the company grows so she puts many of her clients through leadership training.

Create an Employee Handbook from Day One

The federal government's Small Business Administration labels an employee handbook as "the most important communication tool between you and your employees."

A handbook should outline where the obligations of employers and employees meet on subjects like work schedules, appropriate use of company computers and a standard of conduct.

The employee handbook answers questions before they are asked, Zugec said. It can also legally protect the business in a variety of scenarios, such as if there is a dispute regarding overtime pay.

"If an employee comes back and says 'I was not informed' well you can say 'I'm sorry. It was in the handbook,'" Zugec said.

An employee handbook should also contain the business' vision and mission statement.

"We want people to understand this organization — what we are doing and why," said Maynard.

Be in Compliance with the State and Federal Laws

Just because a business is small doesn't mean it can fly under the radar for legal requirements like minimum wage, benefits and workers compensation, according to Zugec.

"[Some small businesses] tend to think 'if they don't catch me it's fine,' but we advise that you should be in compliance," she said.

Because of the complex and ever-changing legal requirements for businesses at city, state and national levels — for example, last year the City Council passed a law requiring paid sick leave for businesses with 20 employees or more — many outsource their human resource division to consultants such as Zugec and Maynard.

On its website, the Small Business Administration also details federal requirements, such as listing the employee rights posters that must be displayed in the workplace.