Human Resources

How to Hire Employees - A Step-by-step Guide

Paul Sharpe, CPA, CA
/
July 19, 2023

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This guide will take you through the essential stages of the hiring process. We'll first cover the rules you need to follow, then we’ll walk you through the key steps for hiring an employee.

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Guide to Hiring an Employee in Canada

Are you a small business owner preparing to hire your first employee in Canada? If so, congratulations! You've reached an exciting milestone. 

However, it's normal to feel a little overwhelmed by the process. There are many regulations to understand, steps to follow, and best practices to consider.

Fear not, we're here to simplify things. This guide is designed to help you navigate your way through the essential stages of the hiring process.

We'll first quickly cover the rules you need to follow so that you’ve got the basics in place.

Then we’ll walk you through the key steps for hiring your first employee. 

After reading this article you’ll know exactly what to do so you don’t miss any information and so you set your new employee up for success.

Or, check out the video below 👇 if you'd rather hear Joe explain it!

Our aim is to make this information as clear and easy to digest as possible. So, without further ado, let's get started!

Understanding Employment Regulations in Canada

As you embark on the journey of hiring your first employee, it's important to know the employment regulations in Canada. These rules ensure fairness and safety in the workplace.

Types of Employee

First, let's look at the various types of workers that you can hire. In general there are full-time employees, part-time employees, and contract positions. 

It's important to first understand what type of worker you want to hire as each type may have a different set of rules. 

In this article we’re talking about either part-time or full time employees which is different from hiring a contractor.  For more clarification on that topic, you can check out our employee vs contractor article.

  • Full-time Employees - Full-time employees usually work around 35 to 40 hours per week, though this can vary depending on the industry or company policy. As an employer, you're often expected to provide full-time employees with a range of benefits. This can include things like paid time off as well as health and dental benefits.
  • Part-time Employees - Part-time employees work fewer hours than their full-time counterparts. The specific number of hours can vary, but it's typically less than 30 hours per week. Part-time employees might not have access to the same range of benefits as full-time employees, but they're still entitled to certain protections under employment law such as vacation, holiday pay and minimum wage.

Each type of employment has its own advantages and challenges. 

Full-time employees can provide stability and continuous work, but they also can require a significant commitment from the employer in terms of benefits and protections.

Part-time employees offer more flexibility, but coordinating schedules and managing a larger number of employees can be a challenge. 

When deciding which type of employment is right for your business, consider your needs, resources, and the nature of the work you're offering. 

Understanding these factors can help you make an informed decision that benefits both your business and your future employees.

Federal and Provincial Regulations

Next, you’ll need to have a basic understanding of the federal and provincial regulations relating to employment in Canada. 

These laws govern how employers and employees interact. Key regulations include the Employment Standards Act, Human Rights Act, and laws about Workplace Health and Safety.

  • The Employment Standards Act sets out the minimum standards for things like hours of work, pay, vacation, and leaves of absence. You can find the various employment standards for each province and territory here.
  • The Human Rights Act (linked here) protects employees from discrimination. It ensures everyone has an equal chance to work, regardless of things like their age, gender, or race.
  • Workplace Health and Safety laws are about keeping employees safe at work. They cover a wide range of issues, from handling hazardous materials to preventing workplace violence. Each province and territory will have their own resource for this and a quick Google search can find your local resource.

Understanding and following these regulations is a vital part of being a responsible employer. 

In the next section, we'll move on to the essential steps of the hiring process. 

Essential Steps in the Hiring Process

Hiring the right person for your small business isn't as simple as posting a job ad and waiting for someone to apply. It's a process that can require careful planning and execution to get right. 

Here's a step-by-step guide to help you navigate through that process.

Identifying the Need to Hire

The first step is recognizing that you need to hire someone. This may happen when you have more work than your current team can handle, or when you need skills that your team doesn't currently possess.

As a service-based business, we keep track of our team’s capacity.  We aim to hire before the team is feeling overwhelmed, but not too early as to reduce profitability.

Deciding when to hire can be a challenge, though.  Often as an early stage business, you will need to bootstrap a bit and wear multiple hats before you have enough revenue to make a hire.  That’s normal, but changes as your business grows.

Once you’re large enough, and if you’re growing quickly you’ll want to plan ahead so that you hire before the need is critical.  It takes time to get new employees trained and fully operational.

Understanding Your Business Needs

Next, you must understand what you need in your new hire. This means identifying the skills and experience necessary to fill the role. 

Think about the tasks the employee will perform and the skills they'll need to do those tasks well.  Create the list of skills and abilities that your new hire will need and use this when reviewing applicants.

There will likely be technical skills as well as soft skills like customer service or verbal communication. Both types are important and should be listed out explicitly so you can refer back to them when reviewing candidates.

Creating a Job Description

A well-written job description outlines the role and responsibilities of the position. It should also list the required skills, experience, and qualifications. 

You can choose whether to include a salary range or not. In my experience, it’s important that candidates are aware of the potential wage early on in the hiring process so there is no mismatch of expectations. 

A clear job description helps attract the right candidates and sets clear expectations of both the employee and the employer.

Advertising the Position

Once you have a clear job description, it's time to advertise the position. There are many ways to do this, including posting the job on your website, job boards, or social media.

Choosing the right platform for your job posting is also important. Look at websites that are popular among job seekers in your industry. LinkedIn, Indeed, or Job Bank Canada are often good general choices. It also helps to post on industry specific job sites if available.

Social media and word of mouth are also good ways to attract candidates. If your business has a social media presence, there’s a good chance some of your followers may be interested or may know people who are.  

Similarly, if someone who knows the business recommends the role to a friend or acquaintance, that can be a warmer lead than just an applicant from a job board.

These are often good candidates because they already know something about the business and they likely identify with its values and way of doing things.

Key Elements of a Compelling Job Advertisement

A compelling job ad grabs the attention of potential candidates.

  • Define the Role - It should clearly state the job title, summarize the role, list key responsibilities, and highlight the benefits of working for your company.
  • Attract Applicants - Think of anytime you have looked for a job and what information attracted you or helped you determine if the role was right for you.  
  • Outline the Benefits - The benefits of working for your company start with monetary compensation but there are also other, more qualitative ones as well. Consider including things like flexible working hours, the option for remote work or paid professional development training if you offer these.

Be very clear on how to apply for the position and what you expect from applicants.  If you want applicants to provide a resume and cover letter explaining why they’re applying and why they’re right for this exact role, then make sure to explicitly state that.

Screening Applicants

After receiving applications, the next step is screening and interviewing candidates. Screening involves reviewing resumes to identify the most qualified candidates based on the required duties and responsibilities.

I often find that there will be a number of candidates that don’t follow the application process properly. I will usually remove these from the running unless their application is extremely good. Being able to follow instructions is an important skill for an employee to have.

Once you’ve narrowed down the list of candidates, invite your shortlist of applicants to participate in an interview.

Conducting Effective Interviews

Interviews are a crucial step in the hiring process. They give you the chance to assess a candidate's skills, experience, and cultural fit. 

Here are some key points to keep in mind:

  • Prepare Ahead of Time - Before the interview, review the candidate's resume and the job description again. This will help you form relevant questions and better understand what you are looking for in a candidate.
  • Start with a Warm Welcome - Begin the interview on a positive note. Welcome the candidate, introduce yourself, and explain the format of the interview. This can help put the candidate at ease and set the stage for a productive conversation.
  • Ask Open-Ended Questions - Open-ended questions encourage candidates to provide more detailed responses. Ask about their previous work experiences, how they handled challenges, and how they contributed to their past teams.
  • Assess Skills and Cultural Fit - While technical skills are important, don't overlook cultural fit. Ask questions that help you understand the candidate's work style, values, and how they work with others. Remember, skills can be taught, but cultural fit is harder to change.
  • Provide Information About the Job and Company - Give the candidate a clear picture of the job role, expectations, and company culture. This can help them decide if they're a good fit for your organization.
  • Allow Time for the Candidate’s Questions - Towards the end of the interview, give the candidate a chance to ask their own questions. This can provide valuable insight into what’s important to them, their interest in the role and even their analytical thinking skills.
  • Close the Interview Professionally - Wrap up the interview by thanking the candidate and letting them know about any next steps and when they can expect to hear back from you.

Remember, interviews are a two-way street. It's not just about finding out if the candidate is right for your company, but also if your company is right for the candidate.

Reference and Background Checks

After the interviews, it's important to conduct reference and background checks. This helps verify the information provided by the candidate and assess their reliability.

We typically ask candidates to provide two references. Ideally we want them both to be past work supervisors but this may not always be possible.

Ask their references open ended questions and don’t be shy to ask them to elaborate on their answers further. You can learn a lot from people who have previously worked with the candidate.

Some common open ended questions to ask references include:

  • What has your experience been like working with _____?
  • How would you rate _____’s performance on a scale of one to ten and why?
  • Would you hire _____ again if given the opportunity? Why or why not?
  • Is there anything else you would like to tell me about _____?

Making the Offer

After finding the right candidate, it's time to make them a job offer. 

When creating the offer, consider the complete package you're providing. This includes the salary, which should be competitive and fair based on the candidate's skills, experience, and industry standards. 

Compensation is also more than just a paycheck. It can also involve benefits like health insurance, retirement plans, and vacation time. Details about these benefits should be clearly outlined in the offer and even quantified where possible.

The start date should also be included in the job offer. It can help to be flexible on this, as the candidate may need to provide notice to their current employer.

Keep in mind that the candidate might want to negotiate. Be prepared for this and know in advance what aspects of the offer you can adjust. 

And finally, make the candidate feel valued and show excitement about the potential of them joining your team. This can make a big difference in their decision.

Components of an Employment Offer

The job offer is more than just an invitation to join your team. It's a detailed document that outlines the terms and conditions of employment. Here are some of the key components:

  • Job Title and Description - Clearly state the role the candidate is being hired for and summarize their main duties and responsibilities.
  • Salary - The offer should specify the base salary, how often it will be paid, and any opportunities for bonuses or commission.
  • Benefits - Detail any additional benefits, including health insurance, dental and vision coverage, retirement plans, stock options, and more.
  • Work Schedule - Include details about the expected working hours, flexibility, work from home options, and any requirements for overtime or travel.
  • Start Date - Indicate when you expect the new hire to start.
  • Reporting Structure - Mention who the new employee will report to and, if applicable, who will report to them.
  • Terms of Employment - Clarify whether the role is permanent, temporary, or contract-based.

The offer may also include details about vacation time, sick leave, and any company-specific perks. Make sure all these components are clearly outlined to avoid misunderstandings down the line.

Onboarding Your New Employee

Onboarding is a critical stage of the hiring process. It introduces the new hire to the organization, its culture, and their role within it. 

A well-executed onboarding process helps the employee feel welcomed and valued. It helps to increase their enjoyment as well as engagement and commitment to the business.

  • Welcome - The process can start with a formal welcome, introducing the new hire to their team and setting up their workspace and necessary equipment. 
  • Review Responsibilities - It’s also a good time to make sure that they understand their role and responsibilities by providing them with necessary training and background information.
  • Detail Company Policies - You should provide information such as company policies, culture, and expectations. Let them know who they can approach if they have any questions or issues. 
  • Provide Context - It’s helpful to provide additional context around what is going on in the business. Provide a high-level overview of how the business works and give them details about the different roles and departments. This helps people understand the why of things. Knowing why things are done can help your employees make better informed decisions while going about their duties. 
  • Mentoring - Mentoring or a buddy system can also be beneficial. Pairing the new hire with a seasoned employee and doing some job shadowing can help them to adjust more quickly.
  • Regular Check-ins - Lastly, onboarding is not a one-day event, but a process that can span over several months. Regular check-ins during this period can ensure the new hire is settling in well.

If you follow these main steps when hiring, you’ll know you’ve done a good job of finding the right person and setting them up for success.

Using a Probation Period

The first few months of a new job can be a learning period for both you and the new employee. This is why many employers use a probation period. This is a set time, often three to six months, where you can see if the new hire fits well with the job and the team. 

Probation periods are a good idea for several reasons. They allow you to assess the employee's skills, work ethic, and ability to fit into your company culture before making a long-term commitment. It also gives the new hire a chance to understand their role better and decide if the job meets their expectations.

Open communication is critical during this period. Regular feedback sessions can help the new employee understand what is expected of them and how well they're doing. 

Sometimes, despite best efforts, the employee might not be the right fit for the role or the company. It can be tough to make the decision to let someone go, but it can be the best thing for both parties in the long run. It allows the employee to find a role that better suits their skills and the company to find a better match for the position.

Summary

This hiring guide has given you a quick tour through the hiring journey. We've dug into everything from acing interviews to making sure your new hires are settling in nicely. 

But remember, once you've found the right person, you’ll have to make sure they're sorted out on the payroll side of things.

If that's got you scratching your head, check out our guide to setting up and running payroll in your business or our review of the best payroll software in Canada.  Alternatively, you can check out our payroll services if you’re looking for some more hands-on help and guidance,

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Article by
Paul Sharpe, CPA, CA
.
Originally published
July 19, 2023
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