Now that you've managed to build up a sizeable team, it is your job as a founder to ensure your employees are taken care of through payroll and benefits packages. But if you are new to these systems, what is the best way to go about setting them up?
Seven entrepreneurs share the first steps they took when setting up payroll and benefits packages for their teams.
Q. Now that I have employees, I need to think about benefits, payroll, etc. What is the first step I should take?
1. Know where your money is going, then re-prioritize
When my first company started taking on employees, I realized I had little visibility into where company money was being spent. My best advice would be to have a thorough understanding of where your money is going, and then create a plan that eliminates unnecessary costs--you'll meet your goals faster. –Adarsh Pallian, Trippeo
2. Don’t take the law into your own hands
Familiarize yourself with the labor laws in your state. You need to understand your rights and responsibilities as an employer where your employees are concerned. Talk to an attorney to help you along, because even a well-meaning blunder on payroll can land you in legal hot water down the road. –Steven Buchwald, Buchwald & Associates
3. Use a service for turnkey support
My skills are in content marketing, not accounting and HR, so it's my goal to outsource as much of those functions as possible so that I can focus on what I do best. We use Gusto (formerly ZenPayroll) for our payroll needs, and contract with an accountant for other business accounting needs. When we need help on the HR side, we hire an HR consultant whom we can pay by the hour. –Kathryn Hawkins, Eucalypt Media
4. Know how much you are going to spend
Having employees is a lot more than just paying them on an hourly basis or with a simple salary. You will also need to know how much money is going towards benefits, insurance, overtime, payroll processing, and more. Before massively hiring within your company, connect with a financial or tax advisor to go over your numbers and create a draft of your outgoing payments to employees each month. –Zac Johnson, https://zacjohnson.com/
5. Calculate what you can afford, then get creative
First, calculate the costs. We estimated an extra 11 percent on top of salary to bring contractors on as full-time employees. You need to also figure out what the cost of PTO and holidays will amount to, and consider creative ways to offer benefits that might be lower in cost but still important to employees. Remote work, company outings, and schedule flexibility are some great ways to offer benefits. –Christopher Rodgers, https://zacjohnson.com/
6. Figure out what is best for your specific business
Consult with tax and legal professionals on compliance issues which depend on the number of employees and your business structure. Are you only going to have a few new people or are you hiring a dozen over the next year? Consider using low-cost online tools instead of expensive HR staff, especially as a startup. –Michael Rheaume, SnapKnot Inc.
7. Pick a payroll provider
Payroll and payroll taxes are quite a headache to manage manually, so you should find a great service that fits your needs and budget. Gusto (ZenPayroll) and ADP are great options. PEO providers give you access to better health plans, but they're not for everyone. –John Arroyo, Arroyo Labs, Inc.
