How to Hire Your First Employee
Your first hire is a milestone and a minefield — payroll, taxes, classification, and a search you've never run before. Here's a calm, step-by-step guide to getting it right.
Otto Team
Hiring your first employee starts long before you write a job description — it starts with knowing exactly what this person is here to do.
Before You Post
Get clear on the one outcome this person owns — the thing that will be measurably better in six months because they exist. A vague role attracts vague candidates.
Decide on a budget that includes more than salary: payroll taxes, equipment, software, and benefits typically add 20–30% on top of the base. Knowing the real number keeps the search honest.
The Legal Groundwork
In most places, your first hire triggers obligations: registering as an employer, setting up payroll and tax withholding, and securing workers' compensation or equivalent insurance. Sort this out before the start date, not after.
Classify the role correctly. An employee is not a contractor, and getting this wrong is one of the most expensive mistakes a new employer can make. When in doubt, check your local rules or ask an accountant.
Writing the Job Post
A good job post is short, specific, and honest. Describe the outcomes, not a wish list of twenty skills, and list the salary range — roles that hide pay get fewer and worse applicants.
Write the way you talk. Candidates can smell corporate filler, and your first hire is choosing you as much as you're choosing them. A clear, human post stands out in a sea of templates.
Screening Candidates
Sort applicants against the outcome you defined, not against the longest resume. A focused 20-minute phone screen will tell you more than another read of the CV.
Keep a simple pipeline so no one falls through. A spreadsheet works at the very start, but an applicant tracking system saves you the moment you have more than a handful of candidates.
The Interview
Ask every candidate the same core questions so you can compare fairly. Anchor each one to real work: 'Tell me about a time you…' beats 'Are you a team player?' every time.
Give candidates room to ask questions, and treat their experience well even if you say no. Your first rejection emails set the tone for your reputation as an employer.
Making the Offer
Move fast once you've decided — great candidates have options. Put the offer in writing with the role, salary, start date, and any benefits spelled out clearly.
Then prepare for day one before they arrive: accounts, equipment, a first-week plan, and a friendly welcome. A smooth onboarding turns a nervous first hire into a confident contributor.
Common Questions
Typically you register as an employer, set up payroll and tax withholding, secure required insurance such as workers' compensation, and confirm the role is an employee rather than a contractor. Rules vary by location.
Beyond salary, budget roughly 20–30% extra for payroll taxes, benefits, equipment, and software. Factoring in the full cost up front keeps the hire sustainable.
It depends on the work. Ongoing, core responsibilities usually call for an employee; short-term or specialized projects may suit a contractor. Misclassifying an employee as a contractor carries real legal risk.
A spreadsheet works for a handful of candidates, but an applicant tracking system keeps applications, notes, and stages in one place so no one slips through — and it scales as you hire more.
Hire with confidence
Your first hire, minus the chaos.
Otto HR handles the careers page, applicant tracking, onboarding, and payroll so your first hire is smooth from application to day one. Try it free.