When it comes time to recruit and hire employees for a small business, there are a series of steps that make the process efficient and ensure all business and labor requirements are met. These requirements will vary based on current local, state, and federal laws. In the United States, most small businesses will need an Employer Identification Number (EIN), and state and local tax IDs where applicable.


Employers should gain an understanding of labor law compliance. They should also set up a system that handles employee payment, policy, records, and other administrative needs. Once all tax and regulatory requirements are met and hiring and employee management systems are established, a small business employer must then decide how they will recruit, attract, and gauge potential hires. It will also be necessary to ensure employees can be retained by maintaining a safe and respectful work environment and offering competitive compensation and benefits.

What Does A Small Business Need To Start Hiring Employees?

To start hiring employees, a small business will need to be profitable and secure enough to offer a regular wage, pay social security taxes, unemployment insurance, and worker compensation at the very minimum. A small business should also be able to offer other benefits in order to be attractive to prospective employees. This includes offering disability pay, a health plan, paid leave, vacation time, and other benefits. Whether these are required will vary according to federal, local, and state laws.

A small business must also be prepared to file taxes based on whether they are hiring employees or independent contractors. When the small business is then prepared to consider potential hires, it will be necessary to devote resources to recruitment, interviewing, and other processes needed to attract and choose the best job candidates. Some small business owners may decide to handle these operations on their own or they may rely on a recruitment service to take care of job postings and interviews. This can save time and simplify the process, but it is an additional expense that’s not always practical for small businesses.

Credit: Jeff Kubina

Attracting Job Candidates For Local Business Hiring

Attracting potential hires to a local business or small company can be similar to the process of attracting job candidates to a larger corporation. Offering competitive compensation and benefits, as well as promoting a positive and respectful job culture, is just as important for a small business as a large one. In addition to these hiring and recruiting standards, local businesses can leverage their role in a community to attract eager workers who value the feeling of serving their friends and neighbors.

Establishing and leading with a strong brand and straightforward mission can be very attractive to people who are seeking local opportunities. Emphasizing that a business is small or just starting up is not a bad approach, as it can draw talented workers who thrive in a closer-knit organization and who want to feel their individual performance can make a significant impact. In addition to putting out job postings on community job directories and in classified listings of local news sites, participating in job fairs and local events can be an effective approach to hiring small business employees.

Using A Recruitment Service And Hiring Employees For Small Businesses

The process of attracting job candidates, conducting interviews, and choosing a new employee consumes time and resources. If the goal is to identify the right employee to benefit the small business, the hiring process is unavoidable, but it can be made faster and easier. Since many small businesses and employers don’t have time and energy to spare, they may decide to rely on a recruitment service.

Using a small business recruitment service is somewhat similar to issuing a hiring request in a corporate organization with a human resources department.

Although individual recruiters offer different services, in general, these companies will take a business’ job requirements and create posts to attract as many applicants as possible. Often, the recruitment service will choose applicants based on their queries and qualifications, and then perform an initial interview to narrow down candidates. The pool of candidates is then presented to the employer so that they can more efficiently choose the right employee.

The cost of a small business recruitment service will vary based on many factors, including the job market and industry, and the specific services completed by the recruiter, such as the number of interviews the recruiter completes before delivering a pool of qualified candidates. In general, recruiters will base their fee on a percentage of the prospective employee’s first-year salary.

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