When you started your financial services practice, it may have consisted of you and perhaps your spouse, kids and pets. Over time, however, as your practice grows, you may start thinking about hiring an employee. It is a big responsibility and one that should be taken only after significant planning and forethought. Bringing in an employee, though, can help you grow your business and free you up to generate more revenue. Here are four common questions to consider when deciding to make the leap.
SEE: The Cost Of Hiring A New Employee
How Do I Know When It's Time to Hire?
Before bringing in staff, you need to analyze how you spend your time and what tasks you do not have time to do. Your main job as an advisor is to bring in new clients and manage your existing ones. If you are also handling all of the administrative duties of the business, such as filing, bookkeeping, answering phones and paying bills, consider how much time that is taking away from your main job. In other words, if an employee could free you up to do what you do best, how much more money would the practice make? If it is more than the cost of an employee, it's time to hire. Also take into account how much you are paying in penalties and interest because you are paying bills or taxes late. Having an employee manage those processes can save the business money.
What Rules Do I Have to Follow?
In the U.S., you must follow both federal and state labor laws as an employer. These laws regulate the type of work environment you must provide, what you can and cannot have your employees do, minimum wages and what rules you have to follow when firing an employee. They also outline any required vacation time, sick leave and maternity leave. Check with your state Department of Labor to find out the rules in your state and follow them to the letter.
SEE: 10 Tax Benefits For The Self-Employed
What Should I Get My Employee to Do?
Before hiring, it's important to have a detailed job description so that both you and your employee are on the same page with respect to job duties. Start by outlining all of the tasks you are currently performing, including ones that you are letting slide because you don't have time for them. Put stars beside the tasks you are good at and that you enjoy. You may decide to keep all of the revenue-generating tasks, promotion and investment research. The other tasks are the ones you will assign to your employee. When advertising for the job, include a thorough description of what they will be required to do.
How Much Should I Pay My Employee?
The compensation you offer your employee depends on many factors, but the most relevant one is how much the applicant could get elsewhere for a similar job. For example, if most companies in your area are paying $14.00 per hour for administrative assistants, you will be unlikely to hire a qualified assistant if you are only offering $8.25. Do your research upfront and make sure you are offering a competitive wage. You must also decide if you are going to offer a bonus or increase for good performance. This goal-based compensation plan can help ensure that your employee works toward your company's goals consistently.
SEE: Minimum Wage: Does It Matter?
The Bottom Line
Hiring an employee is a momentous step in growing your financial services practice. A good employee can relieve stress and free you up to bring in more revenue. The more you plan upfront, the more likely it is that your first experience with hiring will be successful.
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