Continuing the series of posts in honor of Bill Gates’ birthday week (October 28), let’s take a spin through Microsoft’s understanding of the small business first-time hiring process.
Why is it I’m thinking, “Do as I say, not as I do?” (That is, the big blue M does not hire its own employees according to the hiring process it suggests to small businesses.)
I should say, it’s a nice little toolkit. Free is good. I sell a competing product, so perhaps I shouldn’t be so quick to point my readers to “free,” but OTOH, sometimes the resources available for “free” are the best reasons to spend a little money.
Let’s start on the first page, with the employee vs. contractor discussion.
Do you want to control the output of the work you need help with, but not manage the process of getting it done? Do you need help on a project-by-project basis?
You can hire a contractor.
Do you want to have more control over how the work is done on a day-to-day basis?
You probably need an employee.
May I add, it’s the IRS that makes and enforces the distinction. “Control over the work” is the biggest variable. Some types of workers, particularly those that have been abused in the past (including but not limited to textiles and piecework, because that happens to be one area I’ve researched) are statutory employees, no matter how much “control” you may want to cede.
Learn employment law
I’d strongly suggest you learn a modicum of employment law, and how it affects your business, before you hire anyone besides your mother. (And that only if you’re reasonably sure your mother won’t sue or report you to the EEOC for asking one of the illegal questions.) The federal laws generally apply to companies with more than one or two employees (apart from the Civil Rights Act of 1864, which applies to all business transactions and yes that is 1864, not 1964.) However, state laws often apply at a much lower level than the federal laws. People who worked in corporate before starting their own business often have a general understanding of how these laws work; if your own business is also your first job, spend some time learning a bit of employment law.)
(As noted, I am not a lawyer and none of this advice is intended to replace consultation with properly licensed legal counsel in your jurisdiction.)
Outsource some of HR
I like the fact that MS recommends outsourcing the parts of hiring and human resources that don’t align with your core business skills. Payroll and tax administration, certainly. Once you get to about seven employees, the Professional Employer Organizations will be calling. (Explaining how they work is a whole ‘nother post–it took me a while to understand it myself.)
What is a good employee?
Here’s the biggest gap in the MS hiring process: what is a “good” employee?
You don’t get from “decide to hire an employee rather than a contractor” to “post a position on MSN Careers” without a bit of work! This is the job description, and knowing what kind of benefits, if any, you will be able to offer, and having an idea of salary (plus additional costs, so you don’t bit off more than you can afford to chew), and thinking about interviewing, and A LOT OF WORK.
In summary? You get what you pay for.