Hiring Employees

First published on Thursday, June 4, 2020

Last updated on Thursday, June 6, 2024

Hiring the right staff is key to running a successful business. There are steps you must take before, during and after selecting a candidate.

You need to be aware that employment laws differ across Canadian provinces, as well as know the costs that come with hiring new employees.

In this guide, we’ll go through the processes you need to follow, the benefits of hiring new staff, and the costs that come with it.

What to do Before Hiring Employees?

Prior to hiring employees, you need to make sure your business is operating legally. Keep in mind the following before starting the hiring process:

Register for a business number: All companies in Canada require a business number.You can receive your business number through the Canada Revenue Agency (CRA) website.Once you have one, you can post jobs for free on the Government of Canada’s Job Bank and start hiring the right employees.
Understand the employment standards for your province: Familiarize yourself with employment standards in your province. These standards include information on pay, vacation days, leave of absence and overtime pay. Getting this wrong could lead to a breach of contract and legal trouble.
Decide on employment type: Choose the correct employment type for the vacancy.This’ll either be part-time, full-time, or temporary employment. Each type comes with its own set of employment standards.

What Are the Steps to Hiring an Employee?

Follow the below checklist for hiring employees to ensure your process is as smooth as possible:

Create a selection plan for hiring an employee: This plan will outline your hiring process from start to finish.
Understand the position you’re hiring for: Daily responsibilities, past experience, education, and qualifications required.
Write an enticing job description: Include the job title, job objectives and daily duties Ensure your description is a clear objective, and free from discrimination or bias.
Screen and interview job applicants: Interview your top candidates. This determines if they’re right for the job. This is your chance to ask strategic questions regarding their qualifications, personality traits and level of enthusiasm for the role.
Check references of preferred candidate: Make sure the information given to you is correct. This includes current job performance and responsibilities.
Make an offer of employment: Before sending over an official employee hiring letter, get in touch with the candidate to offer them the role. Make sure you agree on a starting salary and benefits package with them.

These steps when hiring employees for your small business. Also, follow them if your business is medium or large.

After acceptance of the job offer, you must start the onboarding process. This includes filling out the following forms, such as:

Employment contract: This includes salary and benefits, job responsibilities and leave entitlements.
CRA forms: These include TD1, and personal tax credits return forms. You also need to fill out their social insurance number form. These are required by the CRA and ensure your employee receives their benefits.
Company policy forms: such as confidentiality or non-disclosure agreement, employee handbook acknowledgement form.

You must include the onboarding process as part of your employee hiring policy.

Things to Consider When Hiring an Employee

Rules around hiring employees in Canada differ across provinces. Make sure you understand and are compliant with the employment standards and health and safety legislation of your province.

Hiring an employee in Alberta

In Alberta, the minimum age of employment is 12. However, employees 12, 13 and 14 years old can only work two hours on school days. They can work eight hours on non-school days.

Hiring an employee in Ontario

In Ontario, the minimum age for employment is 14. Employees aged 17 and under can’t work during school hours unless they’ve been excused.

Hiring an employee in British Columbia

In British Columbia, the minimum age of full employment is 16. However, young people aged 12-16 can perform light work. Examples of light work are stocking shelves in retail, or gardening.

What is the Average Cost of Hiring a New Employee?

When it comes to hiring employees, you need to be aware of the costs. The cost of hiring a new employee in Canada is around $4000. This amount is a combination of both internal and external costs.

Internal costs, such as:

Employee referral bonuses.
Employee signing bonuses.
Equipment costs if required (safety equipment and uniform).
Onboarding time (interviewing and training time).

External costs, such as:

Advertising costs.
Agency fees (if you use a recruitment agency).
New employee background checks.

Benefits of Hiring New Employees

There are many benefits in hiring new employees for your company. Consider the following when you’re looking to expand your workforce:

New employees can bring fresh ideas: New recruits bring a fresh pair of eyes to current projects. This not only helps you but also helps current employees gain a different perspective.
An increase in the skill set of your workforce: New employees can bring a different set of skills and experience to the business.
An improvement in morale: New employees help share the workload, meaning staff won’t be overworked or suffer from burnout.
The capacity for new business increases The more staff you have, the higher your productivity levels are. Meaning you can take on new work you previously couldn’t.

Challenges in Hiring Employees

As well as the benefits to hiring, you also need to be aware of the challenges you will be faced with.

Writing an ineffective job description: Ensure your job description is strong, outlining the responsibilities, experience and qualifications required. Failure to do so could lead to unqualified candidates applying for the role.
Not offering a competitive salary: Do your research before posting a job advert. Make sure the salary and benefits package you’re offering is at par with industry standards.
An inefficient hiring process: Set time aside to go through resumes and applications. Don’t keep prospective employees waiting as this may lead to you losing out on potential candidates.