Freelance to Agency: Hiring Your First Employee

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June 11, 2019
Many of you will eventually get to a point where it makes sense to hire an employee to join you. Just be careful, there’s much more to hiring an employee than just signing a contract and issuing payments; here are the thing you need to sort out before you hire your first employee.
Freelance to Agency: Hiring Your First Employee.

Which Roles Do You Need to Fill?

This really depends on why you’re hiring someone as well as the direction you see your business going. Consider the following: Your client base is growing and you’re tired of turning down work. In that case, you’d likely want to hire designers and developers to share your workload with. You spend more time responding to emails and managing finances than actually building websites. If you’re passionate about doing the revenue-generating activities in your business, you should hire an assistant, sales rep, or maybe even an accountant to pass the tedious and ill-filling tasks to. You want to offer an end-to-end digital solution, but don’t have the capacity or skills to do it. First, you need to clearly define the services your agency is going to offer. If they’re not in your wheelhouse, that’s exactly who you need to hire for: copywriter, marketer, SEO specialist, and other creatives will round out your team.

Do You Need Full- or Part-Time Assistance?

Just because you’re in a position to bring someone onto your team doesn’t mean that they automatically need to become a full-time employee. Evaluate where your business currently stands: 

  • How much overflow work do you have?
  • How much work have you turned away in the last six months?
  • Do you have enough clients and a predictable revenue stream that can support a new hire?

Decide how much time you need from a new hire along with how much you can realistically pay before setting a work schedule.

What Kind of New Hire Do You Need?

There are three kinds of new hires you might need: 

  • An independent contractor
  • A part-time employee
  • A full-time employee

Keep in mind that contractors cannot be managed the same way employees are. This means you can’t dictate when they work, where they work from, which tools they use, and so on. You can provide guidelines and processes for their work, but there can be no direct training or supervision.

How Much Do You Pay Them?

First, you have to determine how much you can afford to pay someone and whether or not that’s enough for the work they’re being hired to do. Then, it’s important to recognize the difference between paying a contractor and an employee. Whereas contractors get paid the hourly or flat rate you agree upon, payments are much more complicated for employees. When you hire someone as an employee, don’t forget to factor in additional costs like: 

  • Taxes
  • Health insurance
  • Paid time off
  • Workers’ compensation (if they work on-site)
  • Retirement account contributions (when applicable)

You will also either need to invest in payroll software or to hire someone to handle it for you.

Should They Work On-Site or Remotely?

If you hire an employee that’s going to work closely with you, it might be beneficial to hire someone locally to work from the same office space. That would be a good idea for someone like a fellow designer or an assistant. Then again, many creative professionals and administrators do just as well working remotely. What you need to figure out then is the following: Can you afford to rent an office that’s convenient to get to and conducive to collaboration and productivity? Or: If working remotely, can you cover the costs of the tools your employee must use to do their job (e.g. computer, software, wi-fi, etc.)? Or: Is something in between — like a co-work space where you can occasionally hold in-person meetings — the most cost-effective and productive way to work with your employee?

Are There Any Legal Matters You Have to Deal With as an Employer?

Yes. While these may vary from country to country, the basic idea is the same. You’ll want to: 

  • Register your business with the local government and acquire an employer identification number.
  • Obtain a business license.
  • Register with your local labor department.
  • Prepare all necessary paperwork to hire an employee and provide verification to the government that they’re eligible for work.
  • Set yourself up with a payroll service to ensure you make all payments to employees and the government on time.

To be on the safe side, review the guidelines provided by your local government for small business owners to make sure you cover all your bases.

Where Do You Find Candidates?

The first place to start is by asking for referrals from people you trust and who also understand your work style and personality well. If you’re unable to find candidates through that channel, you’ll find them in a variety of locations around the web: 

  • Your favorite Facebook or LinkedIn groups
  • Professional job boards like Indeed
  • Freelancer marketplaces like Guru or Toptal

Or you can post the job description on your website, optimize it for search or paid ads, and let them find you.

How Do You Vet Job Candidates?

For starters, you don’t need to interview everyone that applies to the position. However, you do need a system that enables you to quickly vet each candidate: 

  1. Confirm that they follow all instructions in the job description/​application.
  2. Review their resume and make sure they have all the qualifications you require.
  3. Have a look at their portfolio and verify the quality is at the desired level.
  4. Scan their social media profiles to make sure there’s nothing there that indicates they’d be unprofessional and, as a consequence, harm your business.

Once you’ve narrowed down the pool of candidates, schedule video calls with the remaining few. This gives you a chance to see if they know how to use basic technology, if they’re punctual, how their personality jibes with your own, as well as to make sure their goals and interests align with your company’s. You should then talk to the references provided by the candidates you’re interested in. This final step will help you determine who is best-suited to the position.

How Do You Onboard New Hires?

Before you send an offer letter, contract, and tax forms to your new hire, make sure your business is ready to bring them on. 

  • Create an employee handbook with information about your business, mission, values, information on holidays and time off, payment schedules, and general company rules and expectations.
  • Aggregate the process documentation you’ve developed for yourself and store it in a well-organized repository for employee training and future reference.
  • Create a training program and schedule it with a mix of written, video, and hands-on learning experiences.
  • Set up a toolbox” for them that includes all of the software and login information they need to get moving.
  • Set them up in your project management system and create a checklist of onboarding tasks to get them acquainted with your system before they start working.

When you’re sure everything is in order, send them a welcome email and packet, and get them started!

Congratulations on Hiring Your First Employee

Hiring someone is going to change your business — hopefully, for the better. Just do your due diligence and make sure they’re the perfect fit for the role as well as for you. Then, give them all the tools they need to hit the ground running. If you can prepare them for success, they’ll have no problem contributing to your own. Featured image via DepositPhotos.

Suzanne Scacca

Suzanne Scacca is a freelance writer by day, specializing in web design, marketing, and technology topics. By night, she writes about, well, pretty much the same thing, only those stories are set under strange and sometimes horrific circumstances.

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