Friday, October 2, 2015

Part 9 of Our Series on Starting a Business

Employees and All that they Bring

At some point in your business journey you may find that you need more hands.  The decision to hire employees should not be taken lightly.  Though employees can be the lifeblood of the business, they bring with them many responsibilities. 

First let’s distinguish between employees and independent contractors.  Employees work for the business, in most cases exclusively.  Businesses typically provide the tools and systems the employee uses.  Employees often get benefits ranging from vacation and personal leave to health insurance and pensions.  Independent contractors work for themselves, usually in their own space with their own equipment.  Contractors do not get benefits from the business, and they typically work for more than one business.  One of the main distinguishing characteristics between employees and independent contractors is that a business must pay taxes for each employee, and not for contractors.

There are many considerations a business owner must address when deciding to hire employees.  Here are just some of them:

·        How (hourly, salary, commission) and how much to pay the employee

·        Employee benefits (vacation, holidays, health or other insurance, pension, etc.)

·        Where the employee will perform their job

·        Training

·        Required taxes and reporting

·        State and federal safety laws; worker’s compensation

·        Setting expectations, performance reviews, disciplinary action if necessary

After considering all of the requirements and your particular situation, decide whether it will be best to hire employees, contractors, or both to fulfill your business needs.

Kim Luedke is Co-owner of
ProfessionalEdge Associates, offering a wide range of marketing and support services to businesses that want to increase their success, but aren't in a position to add to their staff.