How To Hire Employees in 15 Steps

By Indeed Editorial Team

Updated November 5, 2021 | Published May 11, 2021

Updated November 5, 2021

Published May 11, 2021

A well-organized hiring process is essential when you're looking to expand your team. It allows you to comply with legal requirements, attract excellent job candidates and hire efficiently. Learning the correct way to hire can ultimately help you improve and grow your business. In this article, we explain why the employee hiring process is important and provide a guide for hiring employees.

Why is the employees hiring process important?

The hiring process is how you create a team of people who can actually help you reach your business goals. Here are some key workplace areas the process impacts:

  • Teamwork: It's helpful to have employees who can build strong professional relationships. People with interpersonal skills like kindness, patience and compassion are more likely to work well in teams and ultimately help a business grow.

  • Representation: Your employees are representatives of your company. With the hiring process, you can ensure new employees embody your brand's values and support your company's mission.

  • Special skills and experience: Hiring is an opportunity to bring people with special skills and experience into your business. This can have many surprising benefits. For example, if a new employee speaks another language, they can communicate with more customers, who may feel more welcome and then want to continue doing business with you.

  • Productivity: Your employees' productivity directly affects your success. It's important to hire employees who have a strong work ethic. This can ensure they provide products or services to customers effectively.

  • Diversity: Hiring employees with diverse perspectives and backgrounds can help foster powerful ideas, improve systems and increase your customer base.

  • Long-term investments: Because it takes time, effort and resources to train new employees, having the right approach to the hiring process can ensure you're making smart investments in the future of your company.

  • Trust: Since your employees may handle important, proprietary and even confidential information regarding your business, the hiring process can help you find trustworthy individuals.

Related: 20 Benefits of a Diverse Workforce

How to properly hire employees

Conducting the hiring process properly can help you hire enthusiastic and hard-working employees. To ensure your approach to this process is efficient and effective, follow these steps:

1. Register your business

Register your business with federal and state authorities to get an Employer Identification Number, also known as a Federal Employer Identification Number or Federal Tax Identification Number. The IRS uses this to identify your business for tax purposes.

You can also get a state Employer Identification Number by going to your state's labor department website. And when you hire new employees, notify your state labor agency.

2. Set up payroll

Make a plan for how to pay your employees. You can use an accountant or service to manage and administer payroll. Adhere to the Fair Labor Standards Act, which gives employees the rights to minimum wage and overtime pay.

Decide on payment policies for holidays, vacations, sick leave and other types of time off. It's also a good idea to schedule pay periods to correspond with tax withholdings for the IRS.

3. Prepare to file taxes

As an employer, you need to file taxes with the IRS. You can explore the IRS website and its Employer's Tax Guide to learn about federal tax filing requirements. It's also a good idea to check your state's tax agency website for other regulations you need to follow.

Employees often opt for their income taxes and social security taxes to be withheld from their paychecks, so an employer must submit the following forms:

  • Federal W-4: On this form, employees fill out how much federal income tax they want withheld from their paychecks. Employers send these forms to the IRS.

  • State W-4: Most states require employers to submit state W-4 forms. You can find the necessary information on your state's tax agency website.

  • W-2: An employer must fill out this federal wage and tax statement for every employee. It outlines their earnings and taxes withheld for the year. Employers send copies of this form to employees and the Social Security Administration by January 31.

Whoever manages payroll tracks the time employees work, calculates their payroll tax withholdings and delivers their payments. They also report payroll taxes to tax agencies regularly and typically complete payroll every month.

Related: What Are Employee Payroll Taxes?

4. Make a benefits plan

The law often requires an employer to provide worker's compensation, disability pay, leave and unemployment insurance for their employees. Providing other optional benefits, such as health insurance coverage and retirement plans, can attract more candidates during the hiring process.

Read more: Retirement Checklist: Everything You Need to Know

5. Create a personnel filing system

You can use a system to maintain and organize personnel files, including employee information like their identification and tax records. For their employment tax filings, employers should keep their tax records for at least six years. Ensure your tax paperwork is accessible so you can easily file returns and keep track of other financial documents.

6. Complete some research

Consider what your company may need to improve efficiency, quality or profitability, then build a job around it. For example, if you want your company to sell its products online but don't have the means, consider hiring a website designer.

Then, research other companies, especially ones in your industry, to see if and how they're hiring employees. Study their job descriptions to see what kind of information they provide, including salary and benefits. Once you know how your competition is working, you can either match your own hiring opportunities to those standards or differentiate them to gain the attention of potential candidates.

7. Write a job description

Make your job description specific and clear. Describe the tasks and responsibilities of the position, list the qualifications you're looking for in an ideal candidate and outline the amount of industry experience candidates should have. Include an application deadline, salary and any benefits you're providing.

8. Advertise your job

Advertise your job on your company website, if you have one, and regulated, reputable job websites. Consider asking your current employees to communicate the opportunity to their professional networks. This can attract high-quality candidates and save you time. You can also think about hiring current employees for the role.

9. Work in phases

Methodically complete hiring tasks in phases. Read an initial group of resumes and make eliminations, read the remaining group of cover letters and make eliminations, complete a group of interviews and then extend job offers to the top candidates. Each step allows you to narrow down your applicants to the most qualified candidates. You can also complete the cycle again if necessary.

10. Hold interviews

When conducting interviews, practice friendliness, sensitivity and patience. Asking good questions can help you gain valuable information about the candidate. Here are some example questions you can ask:

  • Tell me about yourself.

  • Why would you like to work for us?

  • Tell me about your experience in this industry.

  • Tell me about a time when you had to problem-solve.

  • Tell me about a time when you had to take initiative.

Read more: Interviewing an Employee: How To Successfully Conduct an Interview

11. Conduct background checks

Consider doing a background check on potential candidates to confirm their identities and keep your business safe. Since there are limits on how you can use information found from a background check, consider outsourcing this to a third-party agency. Consult with a legal professional to ensure you're following the law.

To gain more information about a job candidate, contact their references. Take notes on what their references say so you can use it for decision-making.

12. Extend a job offer

After choosing your top candidates, extend the job offer as soon as possible. Make sure it's an excellent offer with a fair salary and benefits. Some candidates may try to negotiate salary, so know what your limits are. Finally, give the candidate enough time to respond, and prepare to contact a secondary candidate if the primary one declines.

13. Fill out some paperwork

You can use online human resources information systems to make the paperwork process easier and quicker. Remember to communicate anything new hires need to bring with them on the first day, such as an identification card or passport. Here are some documents to fill out for new hires:

  • I-9: This form ensures employees meet certain eligibility requirements for the job position by requesting a social security number and citizenship status. Hire candidates who are legally allowed to work in the United States to avoid fines and other penalties.

  • Direct deposit: This form enables an employee to receive automatic payment to their bank account.

  • Non-compete agreement: This document is a contractual promise from an employee not to work for a business similar to yours for a certain amount of time.

  • Employee handbook: This document contains important information about your company, including its policies and codes of conduct.

14. Provide onboarding

The last step of the hiring process is onboarding. Provide new hires with a broad overview of the company, its history and its mission. Give them a tour of the office and direct them to any other places they may need to visit. Introduce them to people and resources that can help them, answer questions and provide guidance.

You may want to give the new hire a project right away. Provide them with any training and supplies necessary to complete their new responsibilities.

Explore more articles