First employee considerations

Before you start the hiring process, it may help to clearly define what you need in your first employee. You could begin by outlining the job title, job responsibilities, and the specific skill set required for the position. A detailed job description could help you attract the right applicants and make it easier to identify a suitable candidate for your business.

You could then evaluate your requirements and determine whether you need to hire an employee or a contractor, as this decision will impact payroll, taxes, benefits and other employment factors. If you decide to hire a full-time or part-time employee, it might be a good idea to outline salary expectations and any benefits you plan to offer.

Consider investigating if federal or provincial government grants, subsidies, or tax credits are available for hiring specific types of employees, such as youth, apprentices, or student interns. Finally, consider the company culture and values you want your new employee to embrace. These elements may influence your new hire’s job satisfaction and long-term success.

Preparing for the hiring process

Deciding what you can afford

Consider whether it makes more sense to hire a full-time, part-time, or contract employee. An independent contractor can help with specific projects on a temporary basis with little overhead costs. However, a permanent employee will usually have a stronger sense of company loyalty and long-term commitment to your vision.

Hiring your first employee will cost more than their salary alone. As an employer, you must pay taxes, such as Canada Pension Plan (CPP), Employment Insurance (EI) premiums, Employer Health Tax in some provinces, workers’ compensation, and other expenses like equipment, workspace and benefits.

Each province or territory has labour standards, minimum wage, statutory holidays, vacation rules, termination notice requirements and WCB/WSB regulations. It’s vital to research and comply with the applicable employment standards, labour laws and regulations where your business operates. As an employer, you’re also responsible for providing a safe working environment, adhering to provincial or territorial occupational health and safety (OHS) regulations and potentially conducting risk assessments.

Take care of your legal obligations

Although it may seem intimidating, navigating the legal aspects of hiring a new employee simply comes down to filling out a few forms and complying with certain regulations.

Here are the essential steps you should take to hire a new full-time employee in Canada legally:

• Obtain a registered Business Number (BN).
• Register for a payroll program account (RP) with the CRA.
• Get the employee’s Social Insurance Number (SIN).
• Have the new employee complete the Form TD1, Personal Tax Credits Return. This is used to calculate the amounts to withhold from their employment.
• Set up a payroll system.

• Maintain accurate and compliant record-keeping for payroll, hours, vacation and general employee files, which are essential for preparing annual T4 tax statements.

Payroll and compensation

Managing payroll is an important part of hiring employees. In Canada, employers follow regulations set by the Canada Revenue Agency (CRA), which oversees payroll and tax responsibilities. Once your payroll program account with the CRA is established, you comply with all payroll deductions, taxes, employment insurance, employee benefits and pension contributions regulations to ensure your new employee receives fair compensation.

Offering additional employee benefit programs, such as extended health insurance, paid time off and retirement plans, may also help you attract employees. Setting up a reliable payroll system will make it easier to manage these responsibilities, stay compliant with labour laws and ensure your employees are paid accurately and on time.

Attracting the right applicants

Here are some tips to guide you in attracting the applicants you want:

Imagine your ideal candidate

Before posting your job, write down the characteristics, skills and qualifications you’re looking for in your ideal candidate. These attributes will help you craft a job description that attracts the most suitable applicants.

For example, you might imagine your first employee as a self-starter with a growth mindset. Identifying these qualities early on will help you spot the perfect candidate when they’re sitting in front of you.

Create a compelling job description

To get your job posting right, start with an engaging summary of the role and clearly describe what the job entails. For example, to attract candidates who enjoy working at small companies, explain that you’re hiring your first employee and are excited to expand your business.

Employers can offer attractive perks beyond traditional benefits like flexible hours, a professional development budget or remote work options, which can impact business growth. To help ensure you’re receiving serious, informed applicants, consider including these perks as well as the following elements in your description:

• accurate job title
• overview of your company
• key job duties and responsibilities
• required and preferred skills

Streamlining the hiring process

To find the right candidate efficiently, it’s important to streamline your hiring process. Start by posting your job opening on popular job boards and job sites, and leverage social media, professional networks and associations to reach a broad pool of applicants. Employers looking to hire their first employee might also consider educational institutions or personal referrals. If hiring a remote employee, ensure you understand how labour laws apply to their location and potentially provide the necessary home office equipment.

Creating a comprehensive employee handbook outlining your business policies, job expectations and available benefits can also help ensure a smooth onboarding experience for your new hire. Consider using job application forms to ensure consistency and efficiency in your hiring process. By optimizing each step, you’ll be better equipped to attract, hire and retain the right employee for your business.

Identifying your top candidates

Conduct pre-employment screening

After attracting several applicants to your job posting, it’s time to screen and manage candidates to decide who should advance in the hiring process.

Find out which applicants meet your basic requirements and desired skill level by:

• reviewing resumes and cover letters
• conducting 15–30 minute phone screens
• communicating with candidates through e-mail

Interview promising applicants

Prepare a list of interview questions that will reveal if your candidate’s vision aligns with yours and broader questions to learn how they respond in difficult situations, what motivates them and if they can drive business value.

Look for the following qualities and attitudes in your candidate’s answers:

• flexibility
• grit and resilience
• passion
• culture fit
• versatility
• sense of accountability
• competitive drive

Check your candidate’s references

Calling your top candidates’ references allows you to evaluate their honesty, teamwork skills and ability to perform the job. Beyond resumes and interviews, speaking with someone who has worked directly with your candidates can also give you valuable insights into whether they are a good fit for your company.

Privacy laws and personal information

In Canada, privacy legislation is a mix of federal, provincial and territorial laws. If you are hiring your first employee as a small private sector business, there are privacy laws regarding personal information and how it is handled.

For example, Canadian employers observe privacy considerations such as the federal Personal Information Protection and Electronic Documents Act (PIPEDA) or provincial equivalents. If you operate primarily in Quebec, Alberta or British Columbia, you will likely be governed by their respective provincial private sector privacy laws. PIPEDA generally applies to private sector organizations engaged in commercial activities in all other provinces and territories. Note that organizations in the Yukon, Northwest Territories, and Nunavut are often considered federally regulated, so PIPEDA applies there as well.

Bringing your ideal candidate on board

Send an offer letter

After making a verbal offer to your top candidate, send an official job offer letter that explains the terms and conditions of employment and includes details such as:

• job title
• start date
• compensation
• benefits

Employers may also provide a written employment contract that outlines key elements, such as duties, hours of work, probationary period, confidentiality clauses and termination clauses. While not always legally mandatory, a written agreement is highly recommended to clarify the terms of employment and protect both parties.

Beyond the offer letter, formalizing the employment relationship involves a comprehensive agreement, and it may also be wise to understand future legal obligations. Although it may seem premature when hiring your first employee, understanding basic termination requirements such as notice periods, severance pay and just cause is essential to employer responsibilities. It is also highly important to understand and adhere to provincial and territorial regulations regarding employment termination, including notice periods and potential severance obligations.

Welcome your new hire to the team

An exceptional onboarding experience sets your new employee up for success in their first days, weeks, months and beyond, and gives them the tools they need to make an immediate impact. To help your first hire feel empowered, create an employee handbook to convey important company information. Consider planning their first month in detail, offering specific goals and clear expectations to help you measure their success.

Here are some other onboarding considerations:

• Ensure the employee has a computer, phone, necessary software and a suitable workspace ready on day one.
• Provide initial training to explain systems, processes and immediate tasks.
• Outline how the new employee will be supported or mentored in their role.
• Provide regulatory training for any mandatory workplace health and safety training, etc.

Building a strong team

Building a strong team involves creating a positive and productive work environment where everyone can thrive. As a business owner, you set the tone for your company’s culture by leading with integrity, supporting ongoing training and development and encouraging open communication.

By considering the above aspects in this guide, you can be in a better position to attract and retain top talent by prioritizing employee and work wellbeing, fostering a motivated, high-performing team and laying the foundation for business growth and long-term success.