Choosing when to hire our first employee was one of the hardest things that I had to do when starting my business. Hiring employee number two (I’m technically employee number one) is an exciting time in a young businesses life-cycle. Hiring an employee is in some ways a guarantee to the employee to have their job and paycheck available. Something that I didn’t want to take lightly.
In an effort to minimize costs, I started my practice by sharing another practices employees. In fact, I shared almost everything with this other physician in the first few months. We were splitting office space, fax machine, utilities, and printer costs to name a few items. I more or less put my name on the door and opened the practice.
Things started to change when my practice became so busy that I was using the surgeons employees vastly more than he was using them. At that point I knew I was being too frugal and needed my own dedicated employee.
It was a bit nerve-wracking hiring our first employee. I did not, and still do not know what the future holds for the company. I was fearful of thinking the company was bigger or healthier than it really was. Was I ready for a dedicated employee or should I have waited a bit longer? It turns out, I was worried about the finances when I should have been more worried about performance of my employee. Things quickly started to go south once I hired employee number one.
Featured image is a picture of my neighborhood. Picture taken in slightly warmer temperature
In order to keep costs low but not too low, I decided to share office space with a general surgeon. In one of my previous posts, I went over the costs that I encouraged starting up my practice. There is no way I could have opened a 1200 sq ft office with 2 employees for any less that I did.
Not only did I share office space, but as I previously mentioned, I shared the two employees that he had on staff. When I made my rent payment, he had an itemized line for their salary that we split in half.
By sharing two employees, I made my life simpler in several ways.
- Instead of getting one employee, I now would get two employees for the cost of one.
- I could skip the hiring process and had two reliable employees (if you have ever hired someone you will find how hard it can be to find someone reliable)
- Paperwork to hire a new person was already taken care
- Employees were familiar with the space and with the office flow
- Since the surgeon who I shared the employees with was in the operating room 3.5 days a week, I had the space and employees to myself for those days
Around 3 months into opening the clinic, the clinic started to get busy. At this point I was averaging more than 10 patients a day (almost all new patients). Many days I was seeing over 15 patients a day. This was quite a long way from our first week when I had 6 patients in the first 5 day work week.
Week after week, our numbers continued to increase. The amount of time that the two employees were spending on my work was quickly starting to eclipse the surgeons work.
At the three month point, I estimated that I was now using about 75% of the employees time and efforts. Since this put a strain on the surgeons clinic and my clinic, I knew it was time that I had to hire my own employee.
Hiring Our First Employee
Indeed has a large office in Austin, TX. In fact, about a third of all of their employees are reportedly living and working in Austin.
I’ve heard good things about the company so I decided to start with Indeed to find my first employee. After all, posting a job on Indeed is free.
Within the first day we had over 10 applicants . In the first 3 weeks we had over 90 applications in total. At that point, I closed the job posting and started to do preliminary phone interviews. Through the phone interviews, I was able to wean the list down to about 5 prospective employees.
Red Flags For Employees
The process to hire someone was a bit more difficult that I thought. When we started receiving applications, there were so many red flags on so many applicants that the list basically weaned itself down to less than 10 from 90. Here are some of the red flags I encountered with trying to hire our first employee:
- Answering the phone and sounding intoxicated. (This happened numerous times even though I was calling between 5 and 6:30pm)
- Numerous spelling errors in their CV or application (spelling doctor wrong in multiple locations)
- Asking what our drug policy was and what happens when (not if) they fail a drug test
- Disrespectful to the current employees or to me.
- Applicant did not answer or return my call/email to interview
Steps Needed To Hire An Employee
Once we made it though the application process, I decided to hire a young lady who on paper and in person seemed perfect for the job. Since this was my first time hiring someone, I had to look up the process about hiring a new employee. This may be slightly different based on what state you are in. However, overall the steps will pretty much be the same as follows:
- Obtain a Employee Identification Number (This is your Federal Tax ID number you get when you form your PLLC)
- Verify employee work eligibility in the United States. This is as simple as getting an employee to fill out a I-9 form
- Establish accounts with Federal and State (if applicable) tax reporting requirements
- Have the employee fill out a W-4 withholding allowance form (unless you are going to hire as an independent contractor then it is a 1099 form)
- Report any new hire to your state directory
- Ensure your workers compensation insurance is up to date (not required in all states but still a good idea to have)
- Post required workers rights notices someone in the office for any employee to see
- Create a handbook for your employees to review. This should have basic info ranging from pay, duties, time off, termination clauses
What Happens If Things Are Not Going Well
Picking good employees is even more critical when the office has only one or two employees. Having a toxic employee will cause the practice to suffer in numerous ways.
Things started off well with our employee, however, within a week flaws started to show.
First, she started to show up later and later. The second week of employment, it started out with her being 5 or 10 minutes late. Then, one day when she showed up 3 hours late and when she did show up she for some reason felt the need to tell one of my patients that she is a recovering drug addict while taking their blood pressure (something she didn’t mention in our interview process and denied doing drugs during the interview).
That same day I emailed her a list of every rule she had broken and a warning that she was on probation. As part of the probation, she met with me one on one later that afternoon and we discussed everything face to face. I had no choice but to give her written notice that she was going to be terminated if she slipped up again.
This brings up a good point. In order to help protect yourself from a claim for unemployment, you need to document every rule that was in the handbook that the employee did not adhere too.
In our case, I typed up a Microsoft Word document, saved it as a PDF and emailed it to her. That way if the state ever questioned us for unemployment, I had a time stamp of when it was delivered to her.
Toxic Employees Can Sink A Business
No one will ever care more about your business than you. You don’t need to require your employees to dedicate their life to the company. However, you do need to stand up for the business and cut out toxic employees.
In our case, the employee that we had to let go was rude to individuals on the phone, forgot to schedule patients appointments, forgot to collect copays, and showed up late on numerous occasions. This lead to money that we sometimes never recouped and to several negative online reviews.
We sat her down no less than 14 times in 2 months in an effort to try to rehab the problem and give her a chance to improve. A part of me really wanted this first hire to work out and not to have to fire them. However, when things never improved we were forced to go separate directions. Well, technically she didn’t show up for work one day. The day after she was 3 hours late, decided to tell a patient she was a recovering drug addict while taking their blood pressure, and the day where I told her one more slip up and shes gone was the day she stopping showing up to work.I texted her asking if she was coming in and she said no. That’s when I told her that we are finished and she needs to bring the keys back to the office.
Writing it out makes me realize how I should have been much much quicker to terminating this employee. I kept thinking how well she did in the interview and how much she needed the money to keep giving her another chance.
Hiring Our Second Employee
In order to have extra help, we called several schools to get an extern who is a medical assistant. This extern did a wonderful job and transitioned now into a full time employee. Things are working so well with her that I decided to give her a raise one month into the job. It is a breath of fresh air to have now 3 people in the office who are reliable, kind, capable, and fun to be around.
There will always be up and downs with business. However, one thing you can control is who works for you. Take these decisions seriously and remember….you’re running a business, not a charity. I had to even remind myself of this since I would call my employee at 6:30 in the morning since she told me she had a hard time getting up. I wanted her to succeed but some people just are not a right fit for your business.