How to prepare for your first employee.

May 17 2019 | PayPal editorial staff

Hiring your first employee is a significant milestone on the road to small-business success. It also comes with a whole new set of responsibilities. Luckily, there are tools that can help you meet these challenges and set you up for success.
With your first employee comes a slew of administrative responsibilities that can be costly to ignore: employee record keeping, performance documentation, payroll deductions, cultural implications. The list goes on.

Many small business owners are surprised to learn that even adding one or two new hires can exponentially increase the amount of paperwork and responsibility from what they were used to. This can be true whether you are a team of two, three, or thirty.

Establishing a few simple HR processes now will help avoid cost, risk, and headaches down the road. And it's never too early to begin.

Step 1: Hire the smart way.
Once you post your job opening, you're likely to receive dozens, if not hundreds of applicants. But if you’re sorting through all those résumés by hand, your top candidates may be snatched away by faster, more organized competitors.

Streamline your recruitment process and dramatically reduce time-to-hire with an applicant tracking system (ATS). Though it may sound intimidating, an ATS is just a simple, digital way to accept applications, review references, set up interviews, and make informed hiring decisions. An ATS also allows you to save qualified applicants in a 'candidate pool' for your next hiring round.

ATS and recruiting software come in many shapes and sizes. Look for simple, affordable options built specifically for small business needs.

Step 2: Centralize everything.
Now that you have employees, you are obligated by law to keep certain documents and records on file. These can vary by state, but may include:
  • date of hire
  • personal information
  • tax forms
  • wage and deduction rates
  • performance documents
  • vacation or leave of absence records
  • emergency contacts
  • and more

The thing about employee records is that it doesn't take much for them to multiply. Before you know it, what once was a shoebox becomes an entire cabinet of papers, forms, certificates, and notes. Worse yet, not being able to easily access these documents can even be an employment law violation.

The answer is to step away from the banker's box and towards a simple, centralized solution. Digital employee record management allows you to keep these important documents safe, secure, and in one easy-to-access place.

A centralized employee record or HR system also allows you to personalize the types of records you want to keep and easily manage who has access to them. This way, sensitive information, such as salaries or bank information, can be limited to payroll managers and executives, whereas emergency contacts may be visible to the whole team.

Bonus: Enable your employees.
Another feature of storing employee records in a digital HR system is that it gives your employees the autonomy to update their own information. Instead of nagging employees to add their phone number or address, each team member can log into their personal employee portal and edit that information themselves.

This means less work for you and less risk of incorrect or outdated information in your system.

Step 3: Automate and sync everyday tasks.
Employee records are just one piece of the people-management puzzle. You might also need to track and approve vacation requests, calculate payroll deductions, provide regular training, and administer group benefits for your growing team. Don't get overwhelmed. Navigating these new responsibilities is necessary to grow your small business—and that's why you hired these new employees in the first place, right?

One of the easiest ways to accomplish all these new and often tedious tasks is by automatically synching your employee data whenever and wherever possible.

For example, rather than tracking vacation requests through email and then manually calculating vacation pay, time off management software can automatically track requests, calculate balances, and then store the necessary documentation in each employee's profile for future reference.

Automation can also take care of things like assigning training modules, modifying group benefits information, and generating payroll reports. And if you use a single platform to sync it all, you'll always know exactly where to find the information you need.

Save time, save money, reduce risk.
Growing your small business team is far too important to wing it. Setting up simple growth processes - like a hiring funnel, a centralized employee document system, and automated time off tracking - can save you significant time and money, all while helping to reduce the potential risk of labor law violations.

Most of all, automating your HR means you can spend more time focusing on more important things: finding the best people for your team, discovering their talents and strengths, and giving them the resources they need to help your business thrive.

Spending hours every week on paperwork is probably not the most effective use of your time. Getting organized today, can help give you a head start tomorrow.

About PayPal for small businesses.
For nearly 20 years, PayPal has been a proud partner and platform for over 19 million merchants as they launch, scale, and grow. From access to fast funding to getting paid online, learn how our payment solutions can also help your business.
The contents of this site are provided for informational purposes only. You should always obtain independent, professional accounting, financial, and legal advice before making any business decision.

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