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Hiring my first employee....Any advice?

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Adam Fischer
Hiring my first employee....Any advice?
on Jun 25, 2010 at 8:20:11 pm

As the title says, I'm getting ready to hire my first full-time employee. I've worked with freelancers for a long time and I now have the need for someone to be in the studio every day working on day-to-day editing, rough cuts, equipment management, etc.

This is more or less an entry level position for someone who has some experience, or has just graduated. They don't need to be a fantastic editor, but they need to know their way around FCP, AE, etc.

So here are a few areas I'm seeking advice on:

What to pay them...I know that's obviously going to vary, but I'm not sure what a good starting point is for someone who has a little experience but this is probably their first job in the business. I'm thinking maybe 9-10 bucks an hour??

What kind of bonuses to offer (if any) for things like continuing education. For example, if you do some training and become a wiz on Cinema 4D, I'll pay a bonus of $?....

What kind of agreements/paper work/contracts I should have in place with them. Outside of the legal requirements, have any of you run into a sticky situation with an employee and wished you had something dealing with that in your employment contract?

Anything else you can think of that you wish someone would have told you about before you hired your first employee?

Thanks in advance for any input!


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Mark Suszko
Re: Hiring my first employee....Any advice?
on Jun 25, 2010 at 8:46:50 pm

Google their name and facebook first./


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Neil Hurwitz
Re: Hiring my first employee....Any advice?
on Jun 25, 2010 at 8:50:03 pm

Congratulations on growing your operation to the point where
you need a full time employee.
What you pay them is up to you and I can't comment on.
However there are a whole lot of things you need to do when you put
someone on payroll
1. You need a workers comp policy and or disability policy
2. Federal employer ID number
3. Unemployment ID number
You will have to file loads of quarterly reports to a whole host
of Local, State and Federal authorities.
My suggestion is that if you don't have experience with
these is that you hire a "payroll service" that will
become the employer of record and do all this for you.
You will pay a fee for it but it will be a wash with the
amount of time you or your accountant spends on it.
If you are hiring your Freelancer as a Full time employe you open up
a pandoras box with various agencies that might want to reclassify
the Freelance labor as an employe and whack you for back taxes.
You think you're doing good by creating a job in this economy
but our gov't will declare war on you and bomb you
with all sorts of rules,regulations, fees and fines all of
which are a personal obligation.
Jingle Bells.

Neil Hurwitz


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Patrick Ortman
Re: Hiring my first employee....Any advice?
on Jun 25, 2010 at 11:03:58 pm

Ouch, Neil. But... seriously, in my experience he's got a good point or three. You'll definitely need a payroll company or service. We use the one built into QuickBooks. It works, so far.

That said, CONGRATS! This is a big day for your company!

I second on doing a Google and Facebook search on applicants. I know it sounds bad, but you can weed out a lot of bad apples this way. Or find some superstars. You never know.

On pay, I'd suggest a fair but lower wage than you'd first be inclined to offer. Then, at the end of the year or quarterly, you can give bonuses. It makes people feel more a part of your company, I've found (oddly enough, even more so during the periods where the company doesn't make a profit... but that's another story).



---------------------
http://www.patrickortman.com
Web and Video Design


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Jonathan Ziegler
Re: Hiring my first employee....Any advice?
on Jun 26, 2010 at 12:16:43 am

Egads, what to pay. You probably won't be paying what you paid your freelancers, but you have to make it reasonable. Hit up salary.com to see what to pay - I think they're numbers are a little high for Tucson where I'm at, but about right for Phoenix.

Saw other advice on payroll like quickbooks and that's fine for a 2-man group.

For the legal, I hooked up with Pre-Paid Legal. They come off kinda scammy, but I absolutely love the service - I have the personal legal service for $20 a month and they've already helped with a couple debt collectors and a few tickets plus the single biz owner rider. I've talked to business owners who keep lawyers on retainer for $thousands, but it's like $75-100 a month for the business service and they give you tons of advice, contracts, contact slow payers, even help with articles of organization and tax advice (from a real tax lawyer) all for a very low rate and a discount off of any services which they don't cover. The best part is you contact them anytime during the day and someone calls back in a few minutes (usually). My point is below:

Besides the usual "you should hire a lawyer" advice, you need to protect your intellectual property. That's trade secrets (the things specific to your business that let you do business and make $) and copyright. If you're hiring a newbie, they'll be having a look at your biz and will gain valuable info and access to your clients. That's where a non-competition agreement, a "don't steal my clients" agreement, a non-disclosure agreement, throw in an at-will employment agreement (AZ is a right-to-fire state), and anything else your lawyer can come up with. I know it sounds like a lot, but if there is no contract and your guy or gal decides they don't need you anymore and steal all your clients, your images, your stuff, or the way you do business, you have no legal recourse. A binding contract is a lawyer's territory and your best friend - don't do guesswork; hire a lawyer. I'm guessing you use contracts with freelancers so you want the same with W2 employees.

Finally, look for someone you like, has a good work ethic (finishes on time, shows on time, you can trust), who's good with customers (on the phone, in email or in person), is a go-getter (proactive?), and who has a solid "design" aesthetic. You can teach software, but there's a certain thing to someone who has a sense of what looks good and doesn't. I've worked with pros who had no schooling who were better than the art-school kiddies (I can't talk, I have a BA in graphic design), but I've seen the opposite, too. Keep your options open and be flexible and you might be surprised.

Jonathan Ziegler
http://www.electrictiger.com/
520-360-8293


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Neil Hurwitz
Re: Hiring my first employee....Any advice?
on Jun 26, 2010 at 12:52:05 pm

Oh come on with this Non-compete stuff.
Courts are very very reluctant to enforce them because
people have a right to work, especially at lower levels.
If leaving Job A to go to Job B or to start up your own company
and taking clients with you were to be estopped by the courts
half the people on the COW would be on the street with a tin cup.
This is a creative industry, people need to move around to stay fresh.

Neil Hurwitz


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Kris Merkel
Re: Hiring my first employee....Any advice?
on Jun 26, 2010 at 2:53:19 pm

Having a bus. with employees is night and day compared to a one man/woman shop. All the above advice has been good especially the attorney and tier based pay rate. Make sure that you are paying your employee what they or the job are valued at.

Along with my Freelance business, I run a Tea House, which is at some times more like a full service restaurant with about 8+ employees. And the #1 biggest issues we ever have is with employees. They are not bad employees( most of them) but with scheduling issues, theft issues, customer service issues ect. managing them is like another full time job. Of course with one employee it shouldn't take that much of your energy, just make sure that you get "professional" references and that you trust and genuinely like the person you are going to hire, because you will be spending a lot of time together, as well as this person will be interacting with your clients.

Also rework an "employee" into your business plan to make sure that fits in with your long term plans rather than just something that will satisfy your immediate needs. As you go through this process and plug your #'s into your pro-forma you will find a magic # of how many employees you will need to maintain the type of production company you want to have.


Congratulations on your growth and wishing you continued success. The best part about venturing out on this path is that you can grow your business while work is being done.










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Rich Rubasch
Re: Hiring my first employee....Any advice?
on Jun 27, 2010 at 2:09:10 am

....working on day-to-day editing, rough cuts, equipment management, etc.

This is more or less an entry level position for someone who has some experience, or has just graduated. They don't need to be a fantastic editor, but they need to know their way around FCP, AE, etc.
------------------------------------------------------------------------------------------

I'm in Madison WI and I paid an intern from a local college who fit the above description $20 per hour. 9-10 sounds a little low for the skills you might ask of them. My intern only worked about 15 hours per week or so but became so invaluable that she is now an employee!

Do the math...even at $10 per hour working 40 hours per week you are talking about a salary position earning $20,800 a year. Really? You would be happy offering that in 2010? For a position that certainly at the very least requires higher than average computer skills and some kind of experience in video production...

As for bonuses for exemplary work I think you will be setting the philosophy of the company from this first one going forward. What message will you be sending to the rest of the community? Nice guy but doesn't pay much?

I set up my company as an S-corp from the get go with just myself as the only "employee." You did not say how you have set up your company? With that we might help out with any other advice...



Rich Rubasch
Tilt Media Inc.
Video Production and Post
Owner/President/Editor/Designer/Animator
http://www.tiltmedia.com


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cowcowcowcow
Bill Davis
Re: Hiring my first employee....Any advice?
on Jun 27, 2010 at 8:15:50 am

I'm gonna be tough here and suggest you think VERY hard before you do this.

In essence, hiring people is the first step in moving AWAY from the creative part of any endeavor and moving toward being a business like any other business. Your productive hours start to shift from unique problem solving (creative, client, and program issues) to the most boring and common problem solving issues that human beings have ever invented. (Matching FICA reports, Time sheets, Bonus calculations, What's the appropriate freekin HOLIDAY gift for your new employee!)

THIS is what really happens when you start to hire people. Yes, it may be necessary if you wish to grow your business. Or it may not. You might find a way to emphasize personal creative excellence over production output. And keep small but keep making more by being BETTER than the competition. Keep the work in YOUR hands, rather than subbing parts out to the junior worker and spending so much time trying to bring his or her up to your level of excellence.

It's the fine artist verses the commercial artist conundrum. Build a reputation - or build a business on volume. Two different paths.

Just understand that if you decide to take the "whoppie, I'm now a MANAGER with employees!" route, - and you succeed - you will look up one day and you will likely have virtually NOTHING to do with the things you might have loved about being in such a creative field in the first place.

Again, I'm not trying to dissuade you. Perhaps you really WANT to be more a general business person than a creative person. Just understand the difference. The bigger your business - the LESS you get to do what you love - and the more you have to SERVE the business. And that means MANAGING rather than DOING. Approving, rather than creating. Filing the paperwork, rather than imagining possible solutions to unique problems that only YOU've taken the time to understand.

There are a few THOUSAND books in the library on running a business. And perhaps a few hundred on building and sustaining a true creative life.

I'm just saying be a bit careful before you make a choice as to the branch on which you wish to base your life and career.

Good luck whichever you choose.



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Steve Wargo
Re: Hiring my first employee....Any advice?
on Jun 27, 2010 at 8:47:16 am

Oh boy, Adam.

I have a hundred comments on this one and I think I'll just give you a call next week. Maybe we should do lunch. You're buying, of course.



Steve Wargo
Tempe, Arizona
It's a dry heat!

Sony HDCAM F-900 & HDW-2000/1 deck
5 Final Cut (not quite PRO) systems
Sony HVR-M25 HDV deck
2-Sony EX-1 HD .

Ask me how to Market Yourself using Send Out Cards


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Adam Fischer
Re: Hiring my first employee....Any advice?
on Jun 27, 2010 at 9:26:18 am

Steve! Just the man I wanted to talk to about this...It'll be the best money I've ever spent on a lunch/career counseling!



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Adam Fischer
Re: Hiring my first employee....Any advice?
on Jun 27, 2010 at 9:24:28 am

Thanks Bill, that's very interesting advice. One of the reasons I've been thinking it's time to hire is actually because I'm NOT enjoying what I do as much anymore. I spend so much time just trying to meet deadlines that I don't have time to really enjoy my craft like I used to. So I was thinking it's time for more help on a daily basis, not just freelancers that come and go. I'll consider your thoughts carefully though. Thanks!



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Steve Kownacki
Re: Hiring my first employee....Any advice?
on Jun 27, 2010 at 2:52:24 pm

Bill nailed it, rated him a 4.

What to do?
1)Like any startup, have 2 years of your salary in the bank. If you don't sell anything else the nex 2 years.
2)Have a years salary for your employee too.
3)Do what you love, sub the rest. If you are tired of production like you say, be happy with what this person can provide. They will never be you.
4)Alot of you time will be managing this person, bill enough to cover that time.
5)Are you not meeting deadlines because you are doing too many non-profitable projects? Maybe you don't need an employee but raise your rates and cater to better clients.
6)Can you "hire" this person thru an employment/temp agency, let them worry about everything (including a background check) and you simply have an expense. If it doesn't work out, no hard feelings and no tons of paperwork and legal stuff.
7)Remember you can't talk to employees the way you talk to freelancers. There's legal stuff you can't ask and labor laws to be adhered to.
That's all I can think of at the moment but there's plenty more. Good luck!



Steve



Jump to the FFP Website



View Steve Kownacki's profile on LinkedIn




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Jonathan Ziegler
Re: Hiring my first employee....Any advice?
on Jun 27, 2010 at 5:11:59 pm

Bill, you seem a bit pessimistic here. I have to disagree with you. One's business can be run in any way one wants. If you want to focus on the creative aspect of the business and handle customers, then hire someone else to do the accounting and make the business decisions. Remember: you drive the business not the other way 'round.

If you have a clear plan of action and a good strategy and stick to it, you will succeed. You don't have to be the manager or the supervisor or shift focus from the creative unless that's what you want. If you're stuck, get unstuck, make hard decisions, deal with the consequences.

I like this book: The E-Myth Revisited: Why Most Small Businesses Don't Work and What to Do About It by Michael Gerber (about $12 on amazon or you may find one at Bookman's for those in AZ). It's nothing specific to video, but it talks about business in general and this topic is handled. The big thing is the book talks about how most small businesses start as employees who decide they're gonna do what they do already and be their own boss. Then, with no plan, they grow anyway and don't know what to do once they grow. The business winds up owning them instead and they're miserable. They shut down the business because it wasn't what they wanted and go find a job. It doesn't have to be that way at all.

Jonathan Ziegler
http://www.electrictiger.com/
520-360-8293


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Neil Hurwitz
Re: Hiring my first employee....Any advice?
on Jun 28, 2010 at 11:35:24 am

Sorry Bill,
I can't agree with you here.
It is possible to run a business and stay close
to what you love, the creativity.

There is nothing like leading a Team of Good, Fun
Creative individuals. In fact the Most Fun I ever had
by far in this biz was when I had assembled such a Team.

Being the Ringmaster is just as much fun as being the Juggler.

As Most have said, Just offload the Payroll nonsense to
a payroll company.

Neil Hurwitz


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Jonathan Ziegler
Re: Hiring my first employee....Any advice?
on Jun 27, 2010 at 5:27:44 pm

I hate to say it, but in AZ that's about what most employers pay for entry level work. AZ is a right-to-hire (I call it "right-to-fire" because you don't have to have any reason to terminate an employee other than "we no longer require your services") state so not much union presence. It keeps wages and cost of living down, but employees don't stay very long - quickly moving to higher-paying gigs. $10 an hour might be a little low - shoot for about $12-15/hr. Min is $7.25 in AZ now. On the other hand, with lower costs across the board, it's easier to stay competitive (price-wise) and still make a decent income.

Jonathan Ziegler
http://www.electrictiger.com/
520-360-8293


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Todd Terry
Re: Hiring my first employee....Any advice?
on Jun 27, 2010 at 6:35:22 pm

There's lots of good advice on this thread... most of it right on target (a few suggestions go strangely askew, but not many and there's always some anyway).

However... all this good advice all compiled together does look a bit daunting, scary and fraught with peril.

Nah... it ain't. Hiring your first employee is a big step for a one-man shop, but it's not akin to building an atomic bomb or putting man on the moon. It's really pretty simple and easy, so don't get discouraged if some of this seems overwhelming. It doesn't have to be. Just keep your ducks in a row, advise your CPA of what you are going to do, and make sure things like payroll, insurance, and taxes are taken care of. It doesn't have to be much more complicated than that.

And, by the way... this is really your second employee. Assiming you are paying yourself and not doing this for fun or a hobby, then you are your first employee. This guy or gal will be number two.

My only other comment is that your speculation of offering $9-10 an hour seems quite low. It would be ridiculously low in our area, but no matter what the pay scales are where you are, it seems a bit thin. I know you think, "That's what people pay for entry level jobs in our area," but do you truly want someone who is entry level only... with perhaps some potential but few already-developed skills? They are not going to be much of a help to lessen your workload if you add to your already-full plate the job of teaching them what to do. Also... if you pay some newbi 9 bucks an hour... the next time you blink he will be gone... you'll find him across the street making $10.50 an hour. Your employee search takes your time and energy... you don't want to be going through it every month or two replacing employees who have jumped ship in order to make a dollar more somewhere else. To me the better route is to hire someone good and experienced enough to be helpful, pay them a decent wage, and to pay them enough to keep them a while. Our philosphy has always been to find the best people we can... and pay them more than the other guys would. We get good work out of them, they stay happy and productive, and they don't jump ship.


T2

__________________________________
Todd Terry
Creative Director
Fantastic Plastic Entertainment, Inc.
fantasticplastic.com






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Rich Rubasch
Re: Hiring my first employee....Any advice?
on Jun 28, 2010 at 1:27:16 am

Terry expounded on what I was trying to say. If you go thru the motions and headaches of getting your first employee then make it worth your while AND their's.

Let us all know what you end up doing!

Rich Rubasch
Tilt Media Inc.
Video Production and Post
Owner/President/Editor/Designer/Animator
http://www.tiltmedia.com


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Zane Barker
Re: Hiring my first employee....Any advice?
on Jun 28, 2010 at 3:51:06 pm

"I'm thinking maybe 9-10 bucks an hour?"

Umm yea you might want to rethink that. Especaly if you want a full time employee.

"Do the math...even at $10 per hour working 40 hours per week you are talking about a salary position earning $20,800 a year. Really? You would be happy offering that in 2010?"

AMEN

Another thing that I consider a absolute MUST to offer a full time employee is health insurance, in addition to that offering some sort of 401k would go a long way as well.

"I'll pay a bonus of $?"

I would take health insurance and 401k any day over cash a bonus because even though you say you will be giving them the truth is they will be rare and not vary big.



Hindsight is always 1080p



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Adam Fischer
Re: Hiring my first employee....Any advice?
on Jun 29, 2010 at 3:06:37 am

Thanks to everyone for the great input. I see a lot of responses saying I'm too low with the $9-$10 range but only a couple who offered some alternatives. Anyone want to share what they paid people starting out?

I don't really have a good frame of reference for that number. I have a kid who's still in school now that is sort of interning for the summer and I'm paying him $8.50 but he mainly want the experience so the money isn't an issue. He's living at home and he'd probably work for free.

I tried salary calculators online and got numbers all over the place from $8-$35. I initially thought $10 was too low but then I started second guessing that, thinking that a kid fresh out of school might work that cheap for the experience...but like many of you said, I can't expect them to stick around at that price.

I pay freelancers prices from $20 and hour up to around $100 an hour depending on what they're doing and their level of experience. So what do you think I should pay a full-time-knows-the-basics-but-not-much-else-eager-to-learn first employee?

Thanks again for all the advice, it's been great!



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Mark Suszko
Re: Hiring my first employee....Any advice?
on Jun 29, 2010 at 3:31:11 am

If you can't or won't go higher on the salary, consider other bennies, like buying the shop some AE or other training software to share with the staff, so the kid can improve their skills and do more for you. That serves you both well. Stuff like training materials, a gas allowance or public transit allowance, etc. can sometimes be used by you as a write-off for tax purposes... ask your accountant.


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Stephen Mann
Re: Hiring my first employee....Any advice?
on Jun 30, 2010 at 2:36:40 pm

There is an in-between solution that I've used quite successfully. Temp agencies. Sometimes I need someone for a month or more, (project specific) and I don't want to become an HR manager - too many headaches or legal traps for me. I use a local temp employment agency for my hires.

Here's how it works -

I contract with a local temp agency to employ my personnel. I advertise and interview my potential hires, and when I find one that I want working for me, I send them to the temp agency to process them. The employee (legally speaking) works for the temp agency, and I don't have to become an HR manager. I pay the temp agency and the temp agency pays the employee.

Yes, the per-hour rate is higher (it's about a 50% premium), but it's scalable (more hires or higher pay rates get a better premium rate), it's predictable and it's a hell of a lot cheaper than hiring an HR manager. Plus, I am generally free from tax, FICA and workman's comp issues.

In this economy, the temp agencies will cut their premium to the bone to manage your staff for you.



Steve Mann
MannMade Digital Video
http://www.mmdv.com


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Zane Barker
Re: Hiring my first employee....Any advice?
on Jun 30, 2010 at 3:37:30 pm

Another thing you may want to consider instead of hiring a hilltime position is hiring a couple of part time people.

Why part time?

Well you may be able to pay them a little less as they are not living solely from what you are paying them. (and from what it sounds like you are not going to be offering a livable wage)

Another reason to hire part timers is you don't have to offer health insurance or any other benefits to them. Those are things you need to offer a full time employee if you don't want them bad talking you all over town. And I don't think you understand how much those things will actualy cost you.



Hindsight is always 1080p



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