What to Keep In Mind When Hiring an Employee

Hiring employees is a welcome milestone for most business owners. Expanding your organization can also be a source of anxiety, though.

After all, no one −not you, the hire, your existing employees, or your customers− benefits when you bring someone on who isn’t right for your organization, so it’s important to know how to spot those with potential− or at least have the ability to critically evaluate candidates.

And even if you find the perfect person to fill a position, it’s important not to miss out on opportunities they might give you to improve your bottom line.

Therefore, we asked three professionals pertinent to the hiring process −an operations management consultant, a lawyer and an accountant− for some tips to keep you on track. We hope you find their suggestions helpful.

Understand the true cost of hiring an employee

The hourly rate is just the beginning. Costs for employee benefits, training, and paid time off are also important considerations.

“Having a perspective about those costs, along with an understanding of the current job market and salary ranges, will help you be more competitive as you look to negotiate with candidates,” says Rachel Kutay, principal at Columbus-based Peerlytics LLC.

Write a job description

Do this before you even hire a recruiter or post an advertisement; you need to determine the skills necessary for the job and which abilities will make the employee successful.

The job description will help you write a job posting, and help you choose the most qualified candidates, Kutay says.

Understand legal interviewing and hiring practices

Questions that might seem innocent on the surface −When did you graduate? Are you planning on having a family?− can open you up to charges of discrimination if not directly related to job duties, she says.

Revisit background check policies

The U.S. Equal Employment Opportunity Commisssion recently implemented new enforcement guidance concerning an employer’s ability to conduct background checks.

“To my knowledge, the enforcement guidance has not been tested in courts yet, but it very much discourages employers from using arrest records to exclude a job candidate or fire an employee,” says Amy Ita, of counsel in Barnes & Thornburg LLP’s Columbus office.

The EEOC notes that convictions are more trustworthy than arrests, but still recommends that employers not ask about convictions on job applications, and that, if and when they do, the inquiries be limited to convictions for which exclusion would be job-related and consistent with business necessity.

“A showing of job-relatedness and business necessity requires a demonstration that a policy effectively links specific criminal conduct and its dangers to the risks inherent to the position at issue,” she says. “This has become an intricate issue and employers should consider consulting with counsel to discuss their background check policies.”

Decide whether or not to review social media information 

Social media can inform an employer about an applicant’s membership in a protected class and will expose an employer to liability for making a hiring decision that can be tied to that classification.

“However, there is also the possibility that an employer may learn important information related to a hiring decision, such as whether the applicant has bad judgment or engages in dangerous behavior that could later subject an employer to a negligent hiring claim,” Ita says.

Some employers always look at social media when hiring, while others never do, she adds. Regardless, employers need to know the risks and benefits.

Tap into your networks before posting a job online

Your best candidates will be referrals from your friends, co-workers, colleagues, and others in your circle, Kutay says.

Present your business to potential employees the same way you present it to customers

“Today’s job seekers are very savvy and do their homework,” she says. So showcase your business as a great place to work on your website and your social media outlets, and great applicants will come to you.

Ask applicants if they have non compete agreements with a former employer

Not only could such an agreement impact their ability to fully perform their duties, it can also subject a new employer to a tortious interference with contract claim if the new employer knows of the agreement and helps the applicant violate it.

“Some employers, as part of their application process, have an applicant sign an acknowledgement that he or she is not subject to a non competition agreement with a former employer,” Ita says.

Be mindful of potential employee tax credits

Tax credits help reduce the amount a taxpayer owes. (And what’s not to like about that?)

One to keep in mind is the Work Opportunity Tax Credit, a federal tax incentive Congress offers employers for hiring people from specific groups that have consistently faced significant barriers to employment.

The main objective of the program is to help those people move from economic dependency to self-sufficiency as they earn a steady income and become contributing taxpayers, says William Thomas, CPA and tax senior manager at Columbus-based GBQ Partners LLC.

Meanwhile, participating employers are able to reduce their federal income tax liability.

The Vow To Hire Heroes Act of 2011 could also benefit your bottom line.

The Department of Veteran Affairs Vocational Rehabilitation and Employment program offers eligible veterans the opportunity to get training and hands-on experience through the Special Employer Incentive program.

Veterans approved to participate in the SEI program are hired by participating employers, and employment is expected to continue following successful completion of the program, he says.

The VA identifies suitable placements and coordinates efforts between all parties.

One of the program’s primary perks for employers is reimbursement of up to 50 percent of a veteran’s salary during the program, which typically lasts up to six months.

More information about the tax credit and the SEI program can be found online at DOLETA.gov and Benefits.VA.gov/VOW, respectively.