September 15, 2024 • 13 mins
Ready to unlock the secrets to making your first W-2 hire seamless and efficient? Discover the essential steps to grow your team without the headaches in this episode of Brightside Business. Join me as I share my journey of scaling my family's business to seven figures in under two years. Learn the nuts and bolts of payroll, disability and workers' comp insurance, and why having an employee handbook is crucial to protecting your business. This episode is your go-to guide for transitioning from independent contractors to your first full-time employee.
We'll break down the importance of annual reviews, deciding on PTO, and crafting a detailed job description that sets clear expectations. This episode is jam-packed with actionable advice for online entrepreneurs who are ready to take their business to the next level by building a solid and reliable team. Remember, while I share my personal experiences and practical tips, consulting a legal professional for tailored advice is always a smart move. Don't miss out on this fast-paced, tactical guide to scaling your business with your first hire!
Got Questions? Send them here and I'll tackle them on the show: joey@joeyhyoung.com
Follow me on Instagram, X/Twitter, and Threads for daily content on business strategy and high performance @joeyhyoung
Ready to scale your business? Book a free connection call here and let's chat!
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Joey Young (00:00):
Welcome to Breadside Business, where we talk to
online entrepreneurs likeyourself about how to grow to
seven figures and beyond.
My name's Joey Young.
I helped grow my family'sprofessional services business
to seven figures in under twoyears and I learned a lot along
the way.
One of those things is how tohire somebody.
Let's say you're in the pointin your business where you've
(00:20):
had some 1099 independentcontractors doing some tasks for
you or maybe you've never evenhad one of those yet but you're
ready to hire your first W-2,your first employee.
You're getting to the pointwhere you're like, all right, I
want to put someone on like asolid part-time, full-time
salary position.
They're going to get a title,they're going to get
responsibilities, they're notjust going to get delegated
(00:41):
tasks.
How do you actually go throughand hire this person?
There's a bajilliondescriptions out there on the
internet how to do this.
This is a really condensed,easy to digest version of it.
I should say I'm not a lawyer.
This is not legal advice.
This is not accounting advice.
I don't have any degrees oranything like that.
I need to give that particularprofessional advice.
This is coming from someonewho's just done this a bajillion
(01:04):
times, so please contact yourlawyer if you want to get legal
advice for your state.
But here in New York we havesome particular laws that I'm
going to leave out because I'massuming you're not listening to
this from New York Noteverybody's from New York.
So how do you hire somebody?
Quick, step-by-step, verytactical episode here.
Let's talk through it.
Let's say you're hiring someonefor fulfillment.
(01:26):
Let's say you have a programand when you sell your program
to someone, they get in thereand you want someone to run the
fulfillment end of your programafter you've sold them on it.
So how are you going to hirethis person?
Well, first of all, you got tofigure out some basics.
Payroll is number one.
There's a bajillion companiesout there that do payroll.
For online companies, gustocomes to mind.
(01:47):
There's a lot more.
They can help you get set upvery inexpensively.
You need disability and workerscomp insurance.
This is the non-sexy stuffbusiness owners don't like to
deal with.
But if you're growing andyou're hiring employees, you
need to be able to pay intothese systems because at some
point some one of your employeesis going to get hurt.
They're going to want to takesome time off, let's say
(02:08):
maternity leave or somethingYou're going to need that
disability.
We just use a company that ourfriends recommended.
There's a million companiesthat provide disability and
workers' comp insurance.
You need an employee handbook.
It doesn't have to be extensive, it doesn't have to be super
expensive.
You can go to like RocketLawyer and just get you know
(02:31):
something pretty templated.
You just need something toprotect your butt.
The employee handbook is notthere to tell them how to do
their job.
It's a labor law book toprotect your butt as a business
owner.
So once you got all thosetactical, necessary things legal
things aside and again go talkto a lawyer if you want actual
legal advice this is not legaladvice.
You need to decide a few thingsfor this person you're hiring
(02:51):
for your role.
You need to decide what is theannual review schedule you're
going to be on with this persona performance review you decide.
You know, is that going to beattached to their wages, being
raised to their raise, or isthat going to be separate?
And how much PTO are you goingto give this person?
There are certain laws aroundthat that when you write your
employee handbook they'll tellyou you need to have a certain
(03:13):
amount of sick leave, you know,depending on your state and
stuff.
So you know, make sure that youlook to your you know
employment law handbook, legalcounsel for how much PTO you
need to give to a W-2.
Secondly, after that you need ajob description.
So a job description is just aspecific understanding of what
(03:35):
they're going for.
Everyone's seen a jobdescription before.
It's basically a job summary,responsibilities that they'll
have in the job.
So that's a bullet point ofwhat they're responsible for.
Education and experience youneed to be able to be hired for
this role.
You can have a requirededucation experience and a
preferred education andexperience.
If you want, you need toinclude the work location remote
(03:57):
, in-person, hybrid and who theyreport to on this job
description.
Really, what's most importantfor a job description especially
if you're like a brand new,this is your first hire is what
is this person's metric?
They're gonna be responsiblefor, what are they aiming for
with their job?
You need to have real clarityfor this hire.
What are they responsible for?
(04:18):
And we'll talk more about thatlater so you can include that on
the job description.
Then, once you have a jobdescription and let's say
they've looked at that, you wantto actually hire the person.
It's time for an offer letter.
So an offer letter is adocument, a one pager, that just
basically explains here's whatthey're agreeing to, here's what
you're agreeing to.
It has the title of the rolethey're being hired to.
(04:41):
It has the title of the rolethey're being hired to.
It has the pay that they'll bereceiving, the hours they're
going to work and the details ofthe PTO.
So it's basically just like afact sheet on.
You know, hey, I'm hiring you,I'm paying you this, you're
going to do this, you know Xamount of hours per week and
here's your pay, here's your PTO, just so everyone's on the same
page.
Best practice to get thatsigned so there's no confusion
(05:02):
down the road.
You can always pull it out ifthere's ever any questions about
what they got hired to.
So that is an offer letter yousend them after they've reviewed
the job description and theywant to accept the role.
You send them the offer letterto sign and then you sign it and
then it's official.
It has a start date on there aswell, of course, on that offer
letter.
Official, it has a start dateon there as well, of course, on
(05:24):
that offer letter.
Then you got to fill out an I-9form and a W-4 form to be able
to put them into your payrollsystem.
Maybe your payroll system willhelp you out with that.
Then you want to schedule akickoff call and the kickoff
call is really important becauseit really sets the tone for
your business and we'll get intosome pro tips in a minute.
But you want to lay out on thiskickoff call.
Here's the mission, here's thevision of the organization,
(05:46):
here's the org chart.
You know, if there's multiplepeople in the business, like,
what are their responsibilities?
Who do they report to?
Just so they have like a basicunderstanding.
These are the things that, likebrand new business owners or
scaling business owners forgetto do.
But it's so helpful, like I've.
I've talked to employees whohave not gotten basic
understanding of the structureof the business they're hired
into for six months afterthey've been hired and I'm
(06:09):
showing them the org chart andstuff and they're like, oh my
gosh, this would have been sohelpful to understand.
Here's the business people thatI'm working with and what they
do.
Here's the major projects we'reworking on.
Like this is just super helpfulto lay out for someone on
initial kickoff call.
So on this kickoff call, youknow, mission, vision, org chart
, major projects you're workingon the major goals your company
(06:31):
is working on and maybe a shorthistory of how you started the
business.
Then remind them of theresponsibilities and key metrics
that they have as part of theirjob.
This is that key metric thing.
Again, listen, you got to makethem understand they don't just
have a bunch of things they needto do.
Their job is they areresponsible for an area of your
(06:52):
business and that responsibilityideally can be boiled down to a
number.
So if they have theresponsibility of fulfillment
for your program, for example,maybe their number is a certain
customer satisfaction scorebased on the reviews of the
program.
Or maybe it's a certainretention number they have to
hit where you want a certainlength of time a client is
(07:14):
paying for services, or acertain client lifetime value
you're trying to have them drivetowards.
Or a certain conversion rate onre-ups for your service or your
product.
Like what's that number thatthat person is responsible for?
So they're crystal clear thisis their job.
And then, finally, last thing atthis kickoff meeting is setting
up a regular cadence ofcommunication.
(07:34):
This usually looks like ahalf-hour weekly check-in call
on a video call.
During this weekly check-incall, you're checking up on them
, you're getting to know them.
You're understanding whatthey're facing.
You're letting them vent alittle bit if there's some
problems.
You're checking in on anyreports or any metrics that
they're working towards.
It's a time for you two to getthat face-to-face, and it's
(07:56):
incredible how many businessowners don't do this with their
employees and then they feellike they don't know their own
team because they're not doingweekly check-ins, especially
when they're first hired.
It's super important.
You want to know and, like thepeople you're working with, you
want to be friends with them.
You know it's nice to be ableto do this for you as a business
owner too.
So that's the basic steps andhere's some pro tips.
(08:17):
I want to have three pro tips asyou're going through this
process.
The first one is always startwith a higher degree of control
and with a higher standard.
See, a lot of business owners.
They don't take their rolesseriously that they hire for
because they're a brand newbusiness and they're just kind
of figuring out as they go along.
So they expect you know someonethey hire to have the same
(08:40):
level of dedication and passionfor the business.
But the reality is they're anemployee and they're getting a
job and they probably don't careas much about the business as
you do.
That's just the reality.
So Don't make the mistake ofassuming there is driven, there
is disciplined, there isexcellent at you at what you do.
You need to set that bar highand have a higher degree of
(09:02):
control at the outset of therelationship of them being
employed, because it's alwayseasier to release control and to
let them set their ownstandards down the road versus
starting out with low standards,low level of expectation, low
clarity and then later on tryingto ratchet up the amount of
control you have and the amountof standards you're setting for
(09:24):
them, for their job.
I've learned this the hard way.
Listen, it's not micromanaging.
You're probably going to haveto set a higher bar and a higher
degree of control with newemployees than you think you
need to, because it's alwayseasier to ratchet that down as
you build trust and as theyprove themselves than it is to
ratchet it up later because youstarted out too low.
Okay, second thing is be veryclear about expectations.
(09:47):
The number one complaint thatemployees have with their bosses
, with the CEO of a company, isthey don't know what's expected
of them.
So just address that clearlyfrom the first meeting, from the
kickoff call and thencontinually like don't let them
guess about what you want fromthem.
Have that metric that they'reresponsible for, and literally
(10:10):
say, hey, if you can hit thismetric, you're doing a great job
.
Period, okay, this is your jobhere.
This is what I expect of you.
If you hit this, I'm going tobe really happy, you're going to
be really happy, the businessis going to grow, we're having a
great time.
So just be super, super clearmore clear than you think you
need to Say it more times thanyou think you need to what the
expectation is for them andthey're going to be really happy
(10:31):
.
And third, get to know them on apersonal level.
Like these people, again, arepeople.
Ultimately, you want to bedoing business with people who
are your friends, that you enjoyspending time with.
So you know, if you're notreally good at remembering
things about people's personallives, like you know their kids
getting married or there's avacation coming up, or they have
a certain you know thing goingon with their mother-in-law and
(10:53):
there's a problem, and you knowthere's treatment going on
medically, and you want toremember to check in, like, make
a note you know a weeklycheck-in note about that
employee and just jot down a fewthings they tell you and follow
up and ask about it.
You know, be involved in theirlife, get to know them a little
bit, have that personalconnection, because in a world
where people are jumpingbusinesses and jumping jobs
(11:15):
every couple of years, thepeople who stick around are A
they have a positive workenvironment, it's fulfilling,
but B the people they work withare quality and they enjoy
working with the people thatthey work with.
So create a space for that byinterjecting some personal sides
, some friendship, in thebusiness relationships that you
have with your employees.
(11:35):
Hopefully that helps you framehow to hire your first employee.
If this was helpful for you,hey, I really appreciate a
review.
Drop a like, drop a thumbs up,a five-star review All that
really helps push the showforward.
And the algorithms Any reviewyou can write or subscribe or
follow on whatever platformyou're on.
Please do that because itreally really helps me out in
(11:57):
getting this show spread topeople who want to see it.
And if you have a question forthe show, I would love to hear
your business strategy or yourproductivity question or just a
problem you're facing in yourbusiness.
I'd love to hear from you so Ican address it here on the show.
I can share it anonymously.
Just email me with your firstname, joey, at joeyhyoungcom.
That'sj-o-y-j-o-e-y-h-y-o-u-n-gcom,
(12:24):
and you can also shoot me aquestion on my Instagram.
That's at joeyhyoung, onInstagram.
And hey, if you have anyquestions about your particular
business, if you want someadvice, definitely book a free
consultation call with me.
You can do that.
There's a link in the shownotes to book a 20 minute
breakthrough call.
We'll just talk about what yourbusiness is doing right now,
(12:47):
any opportunities you have, anybarriers you have and get you
growing and breaking through anybarriers that you have right
now that you're facing.
I'd love to help you out withthat free 20-minute consultation
call.
So go ahead and book that anduntil next time, my friends,
happy scaling.
Welcome to Breadside Business, where we talk to
online entrepreneurs likeyourself about how to grow to
seven figures and beyond.
My name's Joey Young.
I helped grow my family'sprofessional services business
to seven figures in under twoyears and I learned a lot along
the way.
One of those things is how tohire somebody.
Let's say you're in the pointin your business where you've
(00:20):
had some 1099 independentcontractors doing some tasks for
you or maybe you've never evenhad one of those yet but you're
ready to hire your first W-2,your first employee.
You're getting to the pointwhere you're like, all right, I
want to put someone on like asolid part-time, full-time
salary position.
They're going to get a title,they're going to get
responsibilities, they're notjust going to get delegated
(00:41):
tasks.
How do you actually go throughand hire this person?
There's a bajilliondescriptions out there on the
internet how to do this.
This is a really condensed,easy to digest version of it.
I should say I'm not a lawyer.
This is not legal advice.
This is not accounting advice.
I don't have any degrees oranything like that.
I need to give that particularprofessional advice.
This is coming from someonewho's just done this a bajillion
(01:04):
times, so please contact yourlawyer if you want to get legal
advice for your state.
But here in New York we havesome particular laws that I'm
going to leave out because I'massuming you're not listening to
this from New York Noteverybody's from New York.
So how do you hire somebody?
Quick, step-by-step, verytactical episode here.
Let's talk through it.
Let's say you're hiring someonefor fulfillment.
(01:26):
Let's say you have a programand when you sell your program
to someone, they get in thereand you want someone to run the
fulfillment end of your programafter you've sold them on it.
So how are you going to hirethis person?
Well, first of all, you got tofigure out some basics.
Payroll is number one.
There's a bajillion companiesout there that do payroll.
For online companies, gustocomes to mind.
(01:47):
There's a lot more.
They can help you get set upvery inexpensively.
You need disability and workerscomp insurance.
This is the non-sexy stuffbusiness owners don't like to
deal with.
But if you're growing andyou're hiring employees, you
need to be able to pay intothese systems because at some
point some one of your employeesis going to get hurt.
They're going to want to takesome time off, let's say
(02:08):
maternity leave or somethingYou're going to need that
disability.
We just use a company that ourfriends recommended.
There's a million companiesthat provide disability and
workers' comp insurance.
You need an employee handbook.
It doesn't have to be extensive, it doesn't have to be super
expensive.
You can go to like RocketLawyer and just get you know
(02:31):
something pretty templated.
You just need something toprotect your butt.
The employee handbook is notthere to tell them how to do
their job.
It's a labor law book toprotect your butt as a business
owner.
So once you got all thosetactical, necessary things legal
things aside and again go talkto a lawyer if you want actual
legal advice this is not legaladvice.
You need to decide a few thingsfor this person you're hiring
(02:51):
for your role.
You need to decide what is theannual review schedule you're
going to be on with this persona performance review you decide.
You know, is that going to beattached to their wages, being
raised to their raise, or isthat going to be separate?
And how much PTO are you goingto give this person?
There are certain laws aroundthat that when you write your
employee handbook they'll tellyou you need to have a certain
(03:13):
amount of sick leave, you know,depending on your state and
stuff.
So you know, make sure that youlook to your you know
employment law handbook, legalcounsel for how much PTO you
need to give to a W-2.
Secondly, after that you need ajob description.
So a job description is just aspecific understanding of what
(03:35):
they're going for.
Everyone's seen a jobdescription before.
It's basically a job summary,responsibilities that they'll
have in the job.
So that's a bullet point ofwhat they're responsible for.
Education and experience youneed to be able to be hired for
this role.
You can have a requirededucation experience and a
preferred education andexperience.
If you want, you need toinclude the work location remote
(03:57):
, in-person, hybrid and who theyreport to on this job
description.
Really, what's most importantfor a job description especially
if you're like a brand new,this is your first hire is what
is this person's metric?
They're gonna be responsiblefor, what are they aiming for
with their job?
You need to have real clarityfor this hire.
What are they responsible for?
(04:18):
And we'll talk more about thatlater so you can include that on
the job description.
Then, once you have a jobdescription and let's say
they've looked at that, you wantto actually hire the person.
It's time for an offer letter.
So an offer letter is adocument, a one pager, that just
basically explains here's whatthey're agreeing to, here's what
you're agreeing to.
It has the title of the rolethey're being hired to.
(04:41):
It has the title of the rolethey're being hired to.
It has the pay that they'll bereceiving, the hours they're
going to work and the details ofthe PTO.
So it's basically just like afact sheet on.
You know, hey, I'm hiring you,I'm paying you this, you're
going to do this, you know Xamount of hours per week and
here's your pay, here's your PTO, just so everyone's on the same
page.
Best practice to get thatsigned so there's no confusion
(05:02):
down the road.
You can always pull it out ifthere's ever any questions about
what they got hired to.
So that is an offer letter yousend them after they've reviewed
the job description and theywant to accept the role.
You send them the offer letterto sign and then you sign it and
then it's official.
It has a start date on there aswell, of course, on that offer
letter.
Official, it has a start dateon there as well, of course, on
(05:24):
that offer letter.
Then you got to fill out an I-9form and a W-4 form to be able
to put them into your payrollsystem.
Maybe your payroll system willhelp you out with that.
Then you want to schedule akickoff call and the kickoff
call is really important becauseit really sets the tone for
your business and we'll get intosome pro tips in a minute.
But you want to lay out on thiskickoff call.
Here's the mission, here's thevision of the organization,
(05:46):
here's the org chart.
You know, if there's multiplepeople in the business, like,
what are their responsibilities?
Who do they report to?
Just so they have like a basicunderstanding.
These are the things that, likebrand new business owners or
scaling business owners forgetto do.
But it's so helpful, like I've.
I've talked to employees whohave not gotten basic
understanding of the structureof the business they're hired
into for six months afterthey've been hired and I'm
(06:09):
showing them the org chart andstuff and they're like, oh my
gosh, this would have been sohelpful to understand.
Here's the business people thatI'm working with and what they
do.
Here's the major projects we'reworking on.
Like this is just super helpfulto lay out for someone on
initial kickoff call.
So on this kickoff call, youknow, mission, vision, org chart
, major projects you're workingon the major goals your company
(06:31):
is working on and maybe a shorthistory of how you started the
business.
Then remind them of theresponsibilities and key metrics
that they have as part of theirjob.
This is that key metric thing.
Again, listen, you got to makethem understand they don't just
have a bunch of things they needto do.
Their job is they areresponsible for an area of your
(06:52):
business and that responsibilityideally can be boiled down to a
number.
So if they have theresponsibility of fulfillment
for your program, for example,maybe their number is a certain
customer satisfaction scorebased on the reviews of the
program.
Or maybe it's a certainretention number they have to
hit where you want a certainlength of time a client is
(07:14):
paying for services, or acertain client lifetime value
you're trying to have them drivetowards.
Or a certain conversion rate onre-ups for your service or your
product.
Like what's that number thatthat person is responsible for?
So they're crystal clear thisis their job.
And then, finally, last thing atthis kickoff meeting is setting
up a regular cadence ofcommunication.
(07:34):
This usually looks like ahalf-hour weekly check-in call
on a video call.
During this weekly check-incall, you're checking up on them
, you're getting to know them.
You're understanding whatthey're facing.
You're letting them vent alittle bit if there's some
problems.
You're checking in on anyreports or any metrics that
they're working towards.
It's a time for you two to getthat face-to-face, and it's
(07:56):
incredible how many businessowners don't do this with their
employees and then they feellike they don't know their own
team because they're not doingweekly check-ins, especially
when they're first hired.
It's super important.
You want to know and, like thepeople you're working with, you
want to be friends with them.
You know it's nice to be ableto do this for you as a business
owner too.
So that's the basic steps andhere's some pro tips.
(08:17):
I want to have three pro tips asyou're going through this
process.
The first one is always startwith a higher degree of control
and with a higher standard.
See, a lot of business owners.
They don't take their rolesseriously that they hire for
because they're a brand newbusiness and they're just kind
of figuring out as they go along.
So they expect you know someonethey hire to have the same
(08:40):
level of dedication and passionfor the business.
But the reality is they're anemployee and they're getting a
job and they probably don't careas much about the business as
you do.
That's just the reality.
So Don't make the mistake ofassuming there is driven, there
is disciplined, there isexcellent at you at what you do.
You need to set that bar highand have a higher degree of
(09:02):
control at the outset of therelationship of them being
employed, because it's alwayseasier to release control and to
let them set their ownstandards down the road versus
starting out with low standards,low level of expectation, low
clarity and then later on tryingto ratchet up the amount of
control you have and the amountof standards you're setting for
(09:24):
them, for their job.
I've learned this the hard way.
Listen, it's not micromanaging.
You're probably going to haveto set a higher bar and a higher
degree of control with newemployees than you think you
need to, because it's alwayseasier to ratchet that down as
you build trust and as theyprove themselves than it is to
ratchet it up later because youstarted out too low.
Okay, second thing is be veryclear about expectations.
(09:47):
The number one complaint thatemployees have with their bosses
, with the CEO of a company, isthey don't know what's expected
of them.
So just address that clearlyfrom the first meeting, from the
kickoff call and thencontinually like don't let them
guess about what you want fromthem.
Have that metric that they'reresponsible for, and literally
(10:10):
say, hey, if you can hit thismetric, you're doing a great job
.
Period, okay, this is your jobhere.
This is what I expect of you.
If you hit this, I'm going tobe really happy, you're going to
be really happy, the businessis going to grow, we're having a
great time.
So just be super, super clearmore clear than you think you
need to Say it more times thanyou think you need to what the
expectation is for them andthey're going to be really happy
(10:31):
.
And third, get to know them on apersonal level.
Like these people, again, arepeople.
Ultimately, you want to bedoing business with people who
are your friends, that you enjoyspending time with.
So you know, if you're notreally good at remembering
things about people's personallives, like you know their kids
getting married or there's avacation coming up, or they have
a certain you know thing goingon with their mother-in-law and
(10:53):
there's a problem, and you knowthere's treatment going on
medically, and you want toremember to check in, like, make
a note you know a weeklycheck-in note about that
employee and just jot down a fewthings they tell you and follow
up and ask about it.
You know, be involved in theirlife, get to know them a little
bit, have that personalconnection, because in a world
where people are jumpingbusinesses and jumping jobs
(11:15):
every couple of years, thepeople who stick around are A
they have a positive workenvironment, it's fulfilling,
but B the people they work withare quality and they enjoy
working with the people thatthey work with.
So create a space for that byinterjecting some personal sides
, some friendship, in thebusiness relationships that you
have with your employees.
(11:35):
Hopefully that helps you framehow to hire your first employee.
If this was helpful for you,hey, I really appreciate a
review.
Drop a like, drop a thumbs up,a five-star review All that
really helps push the showforward.
And the algorithms Any reviewyou can write or subscribe or
follow on whatever platformyou're on.
Please do that because itreally really helps me out in
(11:57):
getting this show spread topeople who want to see it.
And if you have a question forthe show, I would love to hear
your business strategy or yourproductivity question or just a
problem you're facing in yourbusiness.
I'd love to hear from you so Ican address it here on the show.
I can share it anonymously.
Just email me with your firstname, joey, at joeyhyoungcom.
That'sj-o-y-j-o-e-y-h-y-o-u-n-gcom,
(12:24):
and you can also shoot me aquestion on my Instagram.
That's at joeyhyoung, onInstagram.
And hey, if you have anyquestions about your particular
business, if you want someadvice, definitely book a free
consultation call with me.
You can do that.
There's a link in the shownotes to book a 20 minute
breakthrough call.
We'll just talk about what yourbusiness is doing right now,
(12:47):
any opportunities you have, anybarriers you have and get you
growing and breaking through anybarriers that you have right
now that you're facing.
I'd love to help you out withthat free 20-minute consultation
call.
So go ahead and book that anduntil next time, my friends,
happy scaling.
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