Ready to hire your first employee? If so, you’re probably wondering about the right way to begin the hiring process. Remember that hiring the best person takes time—you don’t want to fill the position with the first candidate you interview. He or she may seem like a good fit in the job interview, but if you aren’t asking the right questions and going about the process methodically, you could be hiring the wrong employee for your company. And one bad employee is all it takes to disrupt your business.

But hiring goes beyond just finding the right candidate. There are things you can do during the hiring process that can sabotage your business. From being too vague in your job description to asking inappropriate questions, a lot can go wrong. So before you interview your first candidate, make sure you cover all your bases by following these tips.

Start With a Good Job Description

How much effort are you putting into your job descriptions? A job description should be detailed and tell candidates exactly what you’re looking for, what you expect out of them, and what they can expect from you. Your description should comply with the Americans With Disabilities Act (ADA). You need to make it clear that you are not discriminatory, but also list any pertinent physical requirements, such as being able to lift a specific amount of weight on a daily basis.

Setup a Strategic Interview Process

You need to create a strategy for how you will interview each candidate, and that strategy should apply to each person with whom you speak. Don’t stray from the process, even if you find a candidate that is more conversational. Your questions should examine his or her:

• Core competencies
• Past experience
• Skills
• Education
• Motivation
• Goals

More importantly, you should know what you are not legally allowed to ask during an interview. These questions include:

• Past arrests
• Marital status
• Religious preference
• Children
• Country of origin
• Whether English is their first language
• If they have outstanding debts
• Use of illegal drugs
• Social behaviors

Use Appropriate Criteria for Your Selection

You can’t hire an employee based on his or her marital status, religion, race, gender, veteran status, medical condition, disability, age, etc. In many states you may not consider sexual orientation when hiring. These criteria are discriminatory and could be devastating for your business.

One of the main things you should consider is whether the candidate is the right fit for your company’s culture. He or she may have the skills and experience, but what about personality? You need to find a balance between credentials and how easy the person will be to work with—after all, you and other employees will be interacting with this person every day.

Have the Benefits to Back It Up

If this is your first time hiring an employee, you may not realize what benefits you’re required to carry—not only for your employee’s protection, but for yours as well. Most states require that business owners have workers’ compensation insurance in addition to their blanket business coverage. If you don’t have workers’ compensation, you could not only face fines from your state, but also encounter significant liabilities down the road.

Hiring your first employee is a balancing act between finding the right candidate and protecting the future of your company. By taking your time and looking for a well-qualified, personable candidate, you can hire an employee that will be an asset and not a threat to your business. Why risk making a mistake that could be devastating to your business? Contact HR Solutions for guidance in this process.

Once you’ve hired your first employee, you need to make sure they stick around. In Practical Tools to Manage Costly Employee Turnover, you’ll learn strategies to reduce costly employee turnover.

MJ Management Solutions, Inc., is a human resources consulting firm that provides small businesses with a wide range of virtual and onsite HR solutions to meet their immediate and long-term needs. From ensuring legal compliance to writing customized employee handbooks to conducting sexual harassment training, businesses depend on our expertise and cost-effective human resources services to help them thrive

Over the last three years, John has been an integral part of your small business, helping grow it from a tiny number of people working from home to a moderately successful corporation just starting to really get noticed. Yesterday, he announced that he was quitting. For a small business like yours, without much time to spare, is giving him an exit interview really worth it?

Yes. It is definitely worth conducting an exit interview, and here’s why.

You Need to Know What’s Happening

The first thing to figure out is why John’s leaving, and this is where HR solutions come in. By and large, most employees at small businesses are hard workers who are willing to put in extra time and effort to make things succeed—and if they give up for any reason, you need to know why. Here are some of the most likely reasons:

• It’s not you, it’s me. The employee who’s leaving might have medical or personal reasons for no longer wanting to stay at your workplace. A family crisis, a change in religious beliefs, or an outstanding job offer from another company could all convince someone that it’s time to step out… and if so, then your business doesn’t need to make any changes, because it’s unlikely anything you did would have mattered.
• There was a problem. This is more likely to be the case. There was something that prompted an employee to finally say that enough was enough, and you want to find out what it was. Maybe they simply couldn’t get along with someone else in the office, faced an oddly hostile environment, or didn’t get the support they needed to do their job. This applies to remote workers, too, who need to be managed properly in order to do their best.

Small businesses are in a unique position because they can actually make changes when an exit interview is given. Employee separation is rarely fun, but it is educational, especially if you can get them to reveal the real reason they’re leaving. These days, businesses are increasingly turning to interviews done by third-parties a few weeks after the employee leaves—this gives time for emotions to fade and supplies an unbiased source of data.

Using the Data to Grow

However, exit interviews will be a waste of time if you’re not willing to make changes based on what you hear. In fact, this is a common complaint among lower-level employees—they feel like their words (and, by extension, they themselves) don’t matter to the company, and that their superiors aren’t actually interested in changes. As much as you may not want to hear this, sometimes management is to blame.

You want to avoid this as much as possible—if you stop listening to your employees, then you stop being innovative, and few things are more likely to send your business downhill than hiring top talent and then refusing to listen. HR solutions are about solving problems, not letting you toss issues into the garbage bin.

After all, the real goal of exit interviews is learning whatever you can to keep the rest of your team around. Larger corporations can deal with the loss of several individuals—small businesses don’t have that luxury, and every person who leaves can and will make a significant dent in your operations. If you’re seeing the signs that multiple employees want to quit, you need to fix things immediately.

An exit interview when an employee separates isn’t always easy for a small business, but it is an important part of your growth strategy—and absolutely worth conducting properly.

This article first appeared at M.J. Management Solutions, Inc.

MJ Management Solutions, Inc., is a human resources consulting firm that provides small businesses with a wide range of virtual and onsite HR solutions to meet their immediate and long-term needs. From ensuring legal compliance to writing customized employee handbooks to conducting sexual harassment training, businesses depend on our expertise and cost-effective human resources services to help them thrive.

Keeping employee retention rates high is a major concern for any business—after all, it’s hard to get through long-term projects and expand your business if you can’t ensure that people will stay around. Here are some of the best ways to inspire employees, encourage them to engage, and make sure they stay around.

1) Profit-Sharing Programs

Most employees want to feel like their work matters to the company—but it’s hard to do that if all the profits seem to end up at the very top, especially when you have a lot of utilitarian workers. Profit-sharing programs offer a way to balance employee performance with direct, take-home rewards—and the best part is that you can always afford them. After all, the profits only get shared if they’re actually made! Take-home pay isn’t the only way to share profits, though. You could also offer benefits like having catered meals in the office, tickets to events, or other rewards for your employees that are purchased out of a group fund. If so, be sure to select options that most of your employees will like, and offer the others an equivalent amount in bonus pay.

2) Additional Benefits

Offering benefits that actually benefit the employees is another good way of improving your employee retention rates. This is an area where some executives make missteps—a benefit that looks good on paper may not turn out to be so valuable in practice, and few things will depress employees more than seeing a lot of money spent on something that doesn’t actually help them. Instead, focus on benefits that improve productivity, such as improved wellness programs (“walking meetings” are a good start) and creating comfortable working conditions. HR solutions make this process easier than many companies expect.

3) Have an Open Door Policy

The best employees are adults—and want to be treated like adults. Open door policies aren’t just a good way of stopping people from quitting, especially if you see the warning signs—they’re a real opportunity to get feedback from your employees and look for solutions to their problems. This isn’t just about employee engagement, though that’s a key part of it—when people believe they can get the help they need, they’re far more likely to ask for it right away, and that means spending less time wrestling with an issue they know they can’t solve alone.

4) Rearrange Your Office

Few things restrict employees more effectively than having them in tightly-packed cubicles. If you really want to improve employee retention and get them to engage in their work, try rearranging your office and moving everyone into a large, open space where they can move around at-will. This can sound intimidating at first, so let us explain. Most of today’s business work can be done on computers—and today’s younger employees prefer social work where they can cooperate with each other. They could spend valuable working time waiting for conference or work rooms to open… or they could go the more practical route and just sit down where they’re comfortable. The end result is a surprisingly high increase in productivity, coupled with people who are increasingly engaged in their work and enjoying what they do. In the end, this is what HR solutions are really about—achieving the greatest benefits for the company at the lowest cost to you.

This article first appeared at M.J. Management Solutions, Inc.

MJ Management Solutions, Inc., is a human resources consulting firm that provides small businesses with a wide range of virtual and onsite HR solutions to meet their immediate and long-term needs. From ensuring legal compliance to writing customized employee handbooks to conducting sexual harassment training, businesses depend on our expertise and cost-effective human resources services to help them thrive.

It’s a common conundrum—how do we offer health benefits without breaking the bank? In fact, this is such a common small business challenge that only 54% of small and midsized employers (with fewer than 200 employees) even offer traditional health insurance coverage today.

As small businesses strategize how to afford health benefits, an increasingly popular approach is defined contribution.

What is Defined Contribution?

With a defined contribution health plan, the business gives employees an allowance to use on individual health insurance, instead of contributing to a group health insurance policy. In other words, the business sets up a formal health plan to help employees with individual health insurance.

Defined contribution is taking off with small businesses because it offers an affordable health benefits model where the business, not the insurance company, controls the cost. Additionally, it is a formal, tax-free health benefits program that gives employees access to quality health insurance.

New Rules for Reimbursing Employees’ Individual Health Insurance

But, is this solution too good to be true? If you have been following federal health reform (aka Obamacare), you have probably heard there are new rules and restrictions for reimbursing employees’ individual health insurance. This is true. Employers using a non-compliant group health plan, including reimbursement arrangements, are subject to costly fees.

But the new rules do not mean defined contribution health plans are off the table. What the new rules mean is the health plan needs to be set up and administered in a compliant way.

4 Tips Before Diving In

As a business evaluates a defined contribution and individual health insurance program, here are four tips.

Tip #1: Decide Taxable or Tax-Free Contribution
One of the first decisions a business makes is how to structure the plan. There are two main options—a taxable health insurance stipend or a tax-free health reimbursement plan. Because of the obvious tax savings, most small businesses use a tax-free health reimbursement plan.

Tip #2: Understand the Rules and Reforms
Given the myriad of new and existing rules for employer-sponsored health benefits, understand the business’s obligations under ERISA, IRS, HIPAA, COBRA, and PPACA. Failure to comply can mean costly fees.

Tip #3: Use an Online Self-Service Software
Learning compliance and administration can seem daunting. The third tip is to use an online self-service software to automate compliance and simplify administration.

Tip #4: Don’t Skip Employee Education
We’re all short on time, but remember, educating employees helps everyone get the most out of the health benefit. Educate employees about the defined contribution health plan and about how to access individual health insurance.

Conclusion

Defined contribution and individual health insurance offer a solution to the health insurance conundrum. But before a business dives in, follow these four tips to save time, money, and headaches along the way. For more information on defined contribution health plans, check out Zane Benefits’ complimentary eBook.

Christina Merhar is a guest author and Senior Editor for Zane Benefits, the leader in individual health insurance reimbursement for small businesses. Christina has a passion for helping small employers understand the ins and outs health benefits and Human Resources.