Situation: The CEO of an early stage company has identified a person to help her as an assistant. This will be her first real employee. Prior hires have been contractors who have been paid on revenue generated. This individual’s salary will be an expense without clear association to revenue. What guidelines do you suggest as she makes this hire? How do you hire your first employee?
Advice from the CEOs:
Create a cash flow projection to make sure that you have the cash to afford an employee.
If you consistently expect 40+ hours of work from this individual, consider a salaried position which will give both of you more flexibility.
Paychex currently handles your payroll and benefits. Work with them to make sure that all labor law compliance issues are covered. Also, consider hiring a labor law consultant to help you avoid minefields.
Do a background check even if you have known this individual for a long time.
Consider working with a professional employment organization that can provide back-office HR support for you.
An employee handbook is unnecessary at this point. However, think through how you will want to handle issues that may come up including vacation, benefits and paid/unpaid leave like bereavement leave. Document these for inclusion in a future employee handbook.
Under the current health care law employers with less than fifty employees are not required to provide health benefits without paying a penalty. This may change as the law continues to evolve.
Situation: A company has grown to five times the size that that were when they hired their last Vice President of Sales & Marketing, and are looking for a new VP of Sales & Marketing. What is your advice as they embark on this search? How do you recruit a VP of Sales & Marketing?
Advice from the CEOs:
Think coach as opposed to star player. You are a much larger company, and at this phase of growth you need an individual with good marketing skills combined with sales management skills. You need a brand builder.
Recently, another CEO went through a similar process. His mistake was hiring a person with deep domain experience, when what they really needed was a person with process/methodology experience in complex sales. In your case, consider an individual from a larger company in your industry, or an allied industry. Somebody with knowledge of similar technical sales processes to your company with similar complexity and similar lead flows.
Skip head hunters. Based on your knowledge of good companies in your industry use LinkedIn to find who’s who. You can look at three pools of candidates – those that you can hire away from these companies, those who have worked there but are out of work, and early retirees who have found that they now need to go back to work.
Research current salary ranges in your industry and plan to be competitive, both base and bonus target.
As this individual will be a doer-manager make bonus qualification a combination of personal quota and team performance (overall new sales growth vs. existing projects).
While another CEO agrees that you don’t need a head hunter, find someone who can organize the process – review resumes, perform screening interviews, schedule higher level interviews, follow-ups, etc. – and who will work on an hourly basis.
Have a job application and be sure to ask for the following:
Copies of last W-2s.
State on the application: falsehood is grounds for immediate termination.
Do or outsource formal background checks including verification of education and degrees.
Personally call references for your finalists. Ask these references who else knows this person and speak to them, as well.