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Recruiting and Selecting Employees


1250 per week, $5416 per month, or $65,000 per year, before expenses AND before a vacation! ... The Staffing Agency deals with payroll, checks, tax forms. ... – PowerPoint PPT presentation

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Title: Recruiting and Selecting Employees

Recruiting and Selecting Employees
  • For the Small Business

Self- Employment has Advantages and Disadvantages
  • A disadvantage of being self-employed is you may
    not have anyone to help out.
  • You ARE 1 in your business.
  • The problem is you might be the
  • only one.
  • If you ARE the business, you undoubtedly have a
    lot of responsibilities, and very little time to
    take a break, let alone a vacation!

Self-Employment Limited Capacity
  • How does a self-employed person spend their
  • 25 hours per week producing the product or
    billable hours.
  • 10 hours marketing.
  • 5 hours on administrative- management
  • At 50 per billable hour, that is
  • 1250 per week, 5416 per month, or 65,000 per
    year, before expenses AND before a vacation!

Limited Capacity and Life (of a sole proprietor)
  • The business is reliant on you.
  • Without you, there isnt any revenue coming in.
  • If you get sick, you dont have aback-up.
  • If you go on vacationits un-paid.
  • After 10, 15, or 20 years, when you want to
    retire, what do you have to sell?
  • Does the business retire with you?

Advantages to Hiring Employees
  • They can be trained to run the business in your
  • You are setting up an infrastructure that perhaps
    you can pass on or sell to someone.
  • You can delegate the admin jobs (or the stuff you
    dont enjoy).
  • You can expand your business past the
    single-person capacity!

Making the Decision to Expand or Not!?
  • Like starting a business, the decision to expand
    and take on employees, should not be taken
  • Ask Yourself these questions
  • Are you ready to expand?
  • Can you afford it? (Do a Pro-forma Projection)
  • Are you ready to take on more management
  • Are you ready to give up control?
  • Can you take on more risk?

Alternatives to Hiring an Employee
  • Source out work to other small businesses. This
    works well for certain admin jobs like
  • - payroll, bookkeeping, security, cleaning
  • Use a Staffing Agency. This works well for
    part-time or seasonal help, or when you dont
    want to deal with the paperwork.
  • Take on Independent Contractors.

Independent Contractor vs. Employee
The use of an Independent Contractor or IC has
been a critical issue in the last 2 decades. The
IRS and the EDD enforce a social policy that
states people should be employees (whenever
possible). The policy is to protect employees
(not to punish small businesses). BE AWARE of the
differences between an IC and an Employee. The
IRS has developed Twenty Common Law Factors
TEST to determine the status
IC Checklist
  • No instructions
  • No Training
  • Services do not have to be rendered personally
  • Work NOT essential to firm
  • IC sets hours
  • No on-going relationship
  • ICs have other work
  • ICs determine job location
  • ICs pay business expenses
  • ICs have own tools
  • ICs can make profit or loss
  • ICs cannot be fired at will

Independent Contractor vs. Employeethe risk
  • If the Independent Contractor works and acts more
    like an employeethe government is going to say
    they are an employee.
  • The RISK often comes after the IC leaves and
    tries to collect unemployment compensation.
  • You would pay ALL back payroll taxes other
  • The lesson here is to make sure you have the
    necessary documentation that shows they are a
    true Independent Contractor

IC Documentation Files
  • Copy of their own business license.
  • Hold harmless (and possibly ) conflict of
    interest agreement.
  • Form with Twenty Factor Checklist that they have
  • Current and past contacts

Using a Staffing Agency
  • The person who they send to you is technically an
    employee of the Staffing Agency.
  • The Staffing Agency deals with payroll, checks,
    tax forms.
  • You pay a hire amount to the Staffing Agency and
    they pay the employee.

Pros and Cons of Hiring Staffing Agency
  • Pros
  • Often quicker than recruiting yourself
  • Staffer is screen through Staff Agency
  • No employment paperwork (payroll, taxes, etc.)
  • Use for a limited period without hiring.
  • Cons
  • Hourly rate is significantly higher than higher
  • Less control on who they send to you.
  • Many temporary firms will not have the employee
    that has technical experience you may need.

What about under-the-table?
  • Its true, many small business owners will pay
    people under-the-table for services rendered.
  • Funny thing is the government doesnt have
  • Remember. it's your business, so it is your risk!

Bartering Services Products
  • A Renewed-Old-Method of trading services is
    reemerging in the small business arena.
  • Business Bartering for trades or services is
    predicted to grow over 400 in the next few
  • The Barter Group has set up a program on-line
    with over 500 small business members.
  • The Barter Group takes a 12 cut from trade (1/2
    cash ½ trade).
  • At the end of the year members receive a
    itemized list of all trades and a 1099B tax form.

EDD Services
  • The EDD does more than help you file for
    unemployment insurance or fill out an EIN.
  • The EDD has the largest on-line Job Bank, where
    you can post your vacancy or look for qualified
  • The EDD can help you find qualified workers and
    in the past have offered on the Job Training
    Programs (where they may pay half of the salary)

Using Government One-Stop Shops Workforce
Investment Board
  • Few Small Business are aware of or take advantage
    of the local services that are available to them
    through the Workforce Investment Board (WIB).
  • The WIB is the one-stop government agency that
    includes the Employment Development Department,
    and locally the SEC- Solano Employment Connections

More One-Stop EDD Services
  • Worker Skills-Training for Small Larger
  • Labor Market Information wage information,
    employee issues, AA and EEO compliance plans
  • Payroll Tax Information
  • California Tax Information
  • Downsizing assistance
  • Job Service Information including recruiting

Employment Legal IssuesBefore You Recruit
Understand the Legal Guidelines
Fair Labor Standards Act
  • Workers must be identified as non-exempt or
  • Business that make less than 500,000 MAY HAVE
  • Non-exempt must be paid at least the minimum wage
    and receive over-time pay after 40hours at 1.5
    times ( see state law)
  • Equal Pay for Equal Work!

Stiff Penalties for Abusing Wage Laws
  • Ignorance is not an excuse.
  • Many small businesses have received stiff
    penalties and fines for violating state wage laws
    and the FSLA.
  • Fines of 1,000 per employee if classification of
    exempt-non-exempt is incorrect.
  • Exempt employee must be executive, administrative
    or professional employee with min salary of 250
    per week.

MORE Employment Laws to Review
  • Title VII of Civil Rights Act- companies with 15
    or more employees Prohibits discrimination.
  • Equal Pay Act- Amended Title VII
  • American Disabilities Act- ADA- prevents
    discrimination due to disabilities
  • National Labor Relations Act- Right to Form Union
  • Age Discrimination in Employment Act- companies
    with 20 or more employees

And MORE Employment Laws
  • Family Medical Leave Act- Companies with 50
  • Occupational Safety Health ACT- OSHA- ALL
  • Workers Compensation- mandatory insurance
  • Immigration Reform Control Act Immigration
    Act- All businesses

Immigration Law Acts and How that Impacts Your
Hiring Procedures
The Immigration Acts of 1990s were enacted to
prevent illegal aliens form working in the
U.S. You are required to have new employees fill
out an I-9 or Employment Eligibility
Verification Form. The Company must retained the
form at the business location. Fines are imposed
if you do not have proper documentation.
OSHA Occupational Safety Health Act
  • Law designed to reduce workplace hazards
    improve health safety programs for workers.
  • OSHA does not apply if
  • - your self-employed
  • - your business is a farm that employs your
  • - mining business (has other regulations)

OSHA Posting Reporting
  • You must post a notice called Job Safety
    Health Protection.
  • Many specific industries (restaurants) have other
    notices that must be posted.
  • Keep records of safety if you have ten or more
    employees, for over 10 years.

Other Considerations Before Starting the Hiring
  • What do I really Need the Employee to do? Do a
    Job Analysis and then establish a Preliminary Job
  • Establish the future-employees wage rates. Are
    you competitive? Will this employee get benefits
    or be an exempt employee?
  • Develop a typical work schedule.
  • Revise the Organizational Chart.

Ready Set Hire Steps to Recruitment Hiring
  • Job Analysis- determine the duties and nature of
    the job to be filled the experience required by
    the applicants.
  • Job Description- a written statement of duties
    responsibilities including reporting
    relationships, working conditions, methods
    techniques used and materials and equipment on
    the job.

Steps to Hiring
  • Develop a recruiting plan
  • -Where will you look for your future employee?
  • - Will you advertise
  • 4. Plan the Interview
  • 5. Conduct the Interview.
  • 6. Check the references!

Preparing a Job Description
  • Preparing a job description is a JOB that many
    small businesses over-look.
  • It is important to spend a good amount of time
    defining the task.
  • The EDD has Job Descriptions Wage Information,
    as does the Dictionary of Occupational Titles
    published by the DOL has over 20,000 Job Titles.

Recruitment Strategies A Few Ideas
  • Improve Your Image Its got to look good and be
    fun if someone wants to work there!
  • Utilize Your Current Employees- Get them to
  • Use Newspaper Ads- Still the best way to get a
    BIG response!

More Recruiting Strategies
  • Use On-line Recruiting-
  • Ask Your Customers
  • Develop Contacts Schools Institutions-
    possibly for entry level or internships (Checkout
    SCC, Zafer Sun)
  • Participate in Job Fairs- local and regional
  • Recruit on Campuses