Building a team can be one of the most effective ways to scale your business, focus on the work that’s most important to you, and find camaraderie in work. But hiring can be a daunting task! Here are our reflections on how to hire and build a team…
Disclaimer: We are not accountants or lawyers, and nothing in this article is intended to be construed as tax or legal advice.
Since 2018, we’ve grown from a team of two (Krista and I) to a team of seven, and it’s been one of the best decisions we’ve ever made for our business. It’s allowed us to serve more clients and customers, roll out new more products more quickly, and ultimately grow our business beyond what we’d be able to do alone.
Looking back, it seems like hiring a team was a no-brainer. So why did it take us so long to build a team?
Deciding to hire team members was a big decision. We not only had to consider the monetary impact of hiring, but also the way it would impact the culture of ‘Davey & Krista.’ We found ourselves getting nervous about the consequences of hiring…
What if we didn’t continue to have enough work to support a team?
What if the team member ended up not being a good fit?
Would our clients and customers want to work with people besides us?
That’s just a smattering of the hesitations we had before hiring a team. We can do everything ourselves, we thought—so why bring on other people?
Then something changed.
Krista got pregnant with our son, and she experienced intense morning sickness into the second trimester that made working challenging for a few months. Then, after Jack was born, we realized how much life changes with kids.
It wasn’t just the new practical limitations; we realized that while we could continue to do it all on our own, we didn’t want to do it all on our own.
When should I hire someone?
One practical step we took before hiring our first team member was to make sure we had a 6-month cash reserve in the business.
There’s typically a few months of training and getting settled before the impact of a hire is felt. We didn’t want to have to rush through that process or feel the additional stress of ‘making ends meet’ as a new team member got settled.
We’re glad we did because the first month after hiring our two new team members was fairly lean. They were still training and we had not started scaling our clients to match our new capacity yet. Fortunately, we started seeing growth in our second and third months—although we had set a goal of seeing it by at least month four.
Something else we did was hire shortly before our busiest time of the year. This gave us confidence that we would be able to scale to our new capacity while also giving us time to adequately train new team members before an onslaught of busyness. Training takes time, and it’s important that there’s intentional effort behind it. Otherwise, you’ll find yourself frustrated with your hires, and your hires will be frustrated from a lack of guidance and clear expectations.
Understanding economies of scale (and diminishing returns) will also help you discern whether you’re ready to hire someone. If you add someone to your team, what sort of growth potential will that provide your business? Will it generate more revenue by allowing you to take on more clients and focus on more revenue-generating tasks?
It’s important to feel comfortable in your business before hiring someone. If you don’t understand the role for which you’re hiring, it’s unlikely your new team member will find success. This doesn’t mean you need to be expert in that role; however, you should have an idea of exactly what winning looks like in that role.
A few tips for deciding when to hire someone:
- Are you at or near full capacity?
- If you hire someone, will it allow the business to generate more revenue?
- Have you built up a cash reserve?
- Do you have systems in place so that new team members understand how to find success in their role?
Should I hire an employee or a contractor?
Chat with an accountant or lawyer to understand the legal and tax ramifications of hiring an employee or contractor. There will be considerations at both the federal and state levels, so we’d recommend chatting with someone who is familiar with your industry and area.
We usually have opted to hire employees rather than contractors, but ultimately it depends on the kind of work we need done. Here’s the basic criteria we use in our decision:
If we’re looking for an ongoing role to be filled—especially if it’s related to fulfilling services for clients—we look for an employee. If we’re looking for a project to be completed, we try to find a contractor.
For instance, if we need help fulfilling design services for a client, we look for an employee. If we need help with copywriting for a new product we’re launching, we find a contractor. There are instances where contractors help with recurring, ongoing tasks, but they’re often very specific in scope. An example would be when we hired a Pinterest strategist to help us set-up Pinterest and then disseminate and optimize our content each month on the platform.
Employees are hired for roles that contribute to the fulfillment of client services because it gives us greater control over the creative process (how the work is completed), timeline (exactly when work is completed), and thus the final product. Contractors, on the other hand, cannot usually be told how to work or when to work.
We also prefer working with a team that really cares about the business. There’s usually a greater sense of responsibility and accountability among employees; whereas contractors might be serving many different clients at the same time. That doesn’t necessarily mean they won’t care, but it does make it more likely their time is split in a way that an employee’s time is not.
A few tips for discerning whether to hire a contractor or employee:
- Chat with a lawyer and/or accountant.
- Is it a temporary job or project, or do you need an ongoing role filled? The former is probably best-suited for a contractor and the latter for an employee.
- How much control do you need/want over the project/process? If it’s a lot, then consider hiring an employee. Just need the final product? A contractor might do the trick.
Who do I hire first?
While it’s occasionally easy to figure out what positions need to be created and filled, it’s often a bit trickier than people anticipate. For instance, when we decided we were going to hire, we started by making a list of all the different things we could use help with. That list included everything from help with marketing tasks to administrative tasks to design.
So where do we start?
We decided to start by hiring designers. At the time I could handle many of our support, marketing, and administrative tasks. If we hired designers, Krista could focus on some more administrative and support tasks too. Plus, designers would allow us to scale while taking some of the pressure off of Krista. If I was also a designer, we might have started elsewhere.
As we started to grow, we eventually brought on an administrative assistant and customer success specialist, too.
Choosing what position to hire first should depend on the objective. For us, it was scale, so we hired based on positions that could help us do that. Someone else might want more time to focus on doing the work they want to like to do, so maybe that person would look for an administrative assistant.
Tips for deciding who to hire first:
- Why do you ultimately want to hire someone?
- Make a list of all the tasks for which you need help.
- Group related tasks together into potential positions.
- Decide what tasks will help you reach your objectives.
How do I write a job description? And what should I look for in a candidate?
Whenever we write a job description, we try to include an outline of the position, the qualifications we’re looking for in candidates, and what ‘winning’ looks like in that position.
The outline of the position should include what the day-to-day tasks involve, who that person will be working alongside, and any other benefits or details about the position. It’s often helpful for people to see a potential pay range. Other details that might be helpful are whether the position is full time or part time, remote or in-person, and the expected hours of work.
Qualifications typically include the amount of past experience and the skills you’re looking for in a team member. Being as specific as possible is helpful, but also be sure to mention what’s a required skill versus what is helpful. For instance, when we’re hiring designers, they need to have some experience using a professional design software like the Adobe Suite or Sketch, but since Sketch is relatively new, it’s not a requirement candidates know it. We’re willing to train someone to use that tool.
It’s also helpful to have an idea at the outset of how willing you are to train someone who might not have the prerequisite skills for the position. For instance, we typically weigh trustworthiness and reliability pretty heavily, and are usually willing to train someone up who has those attributes, especially if we think they’ll be a really great team fit. Of course, how much we’re willing to look past a shortcoming in qualifications depends on the job. When we look for designers, for instance, it’s important they have solid prerequisite skills.
Whenever we’re vetting candidates, we pay attention to how quickly they respond to our emails, whether they follow instructions (both the application instructions and any next-step instructions), and the questions they ask us during an interview (more on that in the podcast episode).
Tips for writing a job description and finding the right person:
- Be specific as possible in what you’re looking for. Include a description of the job and what success looks like for that position.
- Decide what’s most important to you as a team member. Remember, you’ll be working with this person everyday.
- How much time do you want to spend training someone? How important is past experience?
How many interviews should I hold? How many people should I interview?
When I recorded this episode on building a team with Nancy Ray, I was shocked to hear about how many times she interviews people before hiring. Admittedly, we don’t interview someone six times like Nancy; however, we do try to interview someone at least three times before making a decision.
While I don’t think there’s a magic number, I do think holding more interviews than you might think necessary is important. Anyone can pull it together for one interview, but it’s much more difficult to ‘fake it’ for six. Additionally, you’ll have more time to get to know someone before making a decision. Remember, you will be working with that person everyday!
Krista and I usually start by holding separate interviews. After we’ve each interviewed a candidate, we get together and compare notes. If we think that person will be a good fit, we do a third interview that has both of us there.
We try to interview quite a few people for a position. It varies depending on the amount of people who apply, but we typically cast a wide net. Even if we’re on the fence about someone’s application, we’ll often invite them in for a first interview. Again, I don’t think there’s a magic number.
Tips for holding interviews…
- Hold multiple interviews for a candidate before hiring.
- Cast a wide net, especially in the first round of interviews. You may be surprised.
- Spend time crafting questions before each round of interviews (and be sure you know what you’re not legally allowed to ask about!).
Frequently Asked Questions about Hiring Team Members
These are some questions that we didn’t cover above, but we’re usually asked about when it comes to building a team. We provide more in-depth answers to these questions in our podcast episode.
What are some tips for onboarding an employee?
Set aside more time than you think you might need, and be intentional about setting up frequent check-ins, especially early on. Definitely over communicate, and don’t assume your new team member knows everything.
Do you have employees and contractors sign contracts for each project?
Employees, no—they sign an employment agreement before they begin working for us. Contractors, maybe. If it’s recurring work, typically that’s outlined in the contract so a new contract doesn’t have to be signed every single time. Remember to seek the advice of a lawyer for your particular situation.
How do you continue to market yourself while also marketing their collections?
This question is typically asked by businesses who have associates. We work on projects collectively as a team, so this doesn’t apply to our business. However, we do share some thoughts on this in the podcast episode.
What have been the best tasks you’ve handed off to people?
Typically tasks that take a lot of time, but don’t move the business forward as much. Email, scheduling appointments, sending information, contracts, and invoices are the first that come to mind.
What are the biggest pain points or challenges in hiring a team?
We’ve been blessed with mostly smooth experiences. However, I always tell people that training usually takes a bit longer than people expect. It’s not unusual for hiring new team members to feel like far more work in the short term.
A Guide to Hiring a Team
Deciding to hire a team is a big decision, and building the right team is one of the most important things a business can do. Hiring the wrong person will not only result in lost time (and perhaps revenue) for the business, but it also doesn’t serve the team member well either. Hiring the right people, however, can result in big business growth.
Fortunately, we’ve learned a thing or two about hiring over the past few years between two businesses.
- Have at least a 6-month cash reserve. This will take the pressure off for the first few months while you’re new team member trains.
- Decide whether the position should be filled by an employee or contractor.
- Create a list of all of the tasks for which you need help.
- Create a position and write a specific job description that outlines the role, qualifications, and what success looks like for that position.
- Decide on an interview process.
Have you hired team members? What are your best tips for finding the right person for the job? Let us know on Instagram or drop us a comment below.