Whether it’s your first hire or your hundredth, paperwork is a part of the ball game. This is nothing new for experienced entrepreneurs and HR professionals, but for the rest, getting acclimated to hiring docs will help you keep things in order and avoid potential legal, tax and other issues down the road. We’ve compiled a list of the most common hiring documents to complete when making a hire. Your needs will vary and may be additional from state to state, but in general this list will cover them in large part.
Employee Offer Letter/ Employment Agreements: This document informs your new hire about key employment details. It usually includes the position for which the candidate is being hired and an overview of the job description. The letter will state salary compensation as well as any equity being given along with details. Other items include references to non disclosures, invention assignments and I-9s (we cover those below). And in applicable areas, it may also cover the terms of “At-Will” employment.
Non Disclosure Agreements (NDAs): The NDA is an important document that should not be overlooked, especially for startups. It basically prevents employees from disclosing sensitive information about the company and the work, both during and after employment. Most NDAs will also include a Non-Solicit, which basically prevents employees from poaching customers and other resources, and (if legal in the state) a Non-Compete, which prevents them from seeking employment with your competitors for a period of time.
Assignment of Invention: This establishes the employer’s ownership of intellectual property created by the employee while in the stead of the company. It should detail any carve-outs for the employee prior to working for the company, as well as provisions, if any, for its use afterwards.
Stock Options Grant: If part of your employee’s compensation includes equity, you need to include a stock options grant along with their employment offer letter. It should detail the number of shares, exercise price, expiration date and vesting schedule. It should also detail what happens to the options if they leave the company, as well as how the employee can exercise the options.
USCIS Form I-9: This form is used to verify the identity and employment authorization of employees in the United States. It is a required document for each and every employee a company hires, regardless of citizenship. You can learn more at http://www.uscis.gov/sites/default/files/files/form/i-9.pdf.
IRS Form W-4: This form is used to withhold federal taxes from an employee’s compensation. This form is used for employees of the company, and not for contractors. You can find Form W-4 here: http://www.irs.gov/pub/irs-pdf/fw4.pdf
IRS Form W-9: This form is for use with independent contractors. It does not need to be filed with the IRS, but should be kept in your hiring file to be available when filling out 1099s. You can find Form W-9 here: http://www.irs.gov/pub/irs-pdf/fw9.pdf
So there you go. A fun, sexy blog about hiring documents, right? Ok, maybe not, but make no mistake, getting these docs taken care of promptly and correctly can save you many a headache down the road.
Smart Insight, analytics experts and Millennium Search client announced their Series C funding today to the tune of 500 million Yen ($405 million). The funding will focus on strengthening retail and technological efforts with cloud service providers around the globe as well as launching their newest product Mugen with a focus on the US market. According to their offical website, Mugen “enables users to design dashboards on the fly without a single line of code. Self service enables every business users an easier and faster ways to discover relevant insights from all the data without any IT support. Interactive visualization helps slice and dice the data to find relationships, correlations and insights improving the enterprise productivity, scalability and flexibility in data driven decision making.”
Since the company began its own entity in October of 2013 they have been focusing on expanding their business to the cloud and big data markets. The company is led by Kiyoshi Machida and the Series C round of funding was lead by Innovation Network Corporation of Japan.
If you are a sports fan odds are you have had of the daily fantasy leader and Millennium Search client FanDuel. FanDuel was founded in a backyard in Texas in 2009 when 5 co-founders sat around and brainstormed the idea for daily fantasy sports. They later debuted their platform at the 2009 SXSW convention in their backyard of Austin, Texas. Shortly thereafter they hired us to help build their team with top notch talent and have since grown to be the leader in this multi-billion dollar market.
Just a few weeks ago FanDuel raised their Series E round, an astonishing $275 million! With football season right around the corner there will be nothing but more momentum for the company which could lead them into an IPO. In fact, in an offering letter for the Series E round that just closed it stated “This round of funding for FanDuel is expected to be the last capital raise for the company prior to their IPO,”.
This goes to show that having a great product with a world class team equals success. Here at Millennium Search we are the industry leaders of recruiting and as you can see above we build world class teams.
If you would like more details on the fund raise you can check out this article on Forbes: http://www.forbes.com/sites/darrenheitner/2015/07/14/fanduel-raises-another-275-million-is-an-ipo-next/.
A lot of time, money, effort and productivity goes into hiring great people for a startup. But inevitably, not every hire your company makes will work out. Some people just don’t work out from the start, and others fade in the longer term. When hiring, take measures to prevent bad hires and have solutions ready for when they happen.
Never Stop Perfecting Your Hiring Process and Strategy
Above all, it is important to never stop perfecting your interviewing, hiring and retention strategies. Startups must constantly evaluate and adjust their interviewing and hiring processes, and learn from experience how they find, qualify and identify their best hires. Because people are not a quantifiable entity, this can be especially difficult. Hiring is one of the most challenging and highest priorities companies face, so no doubt mistakes will be made along the way. But experience, repetition testing, and adaptation will lead to better results over time.
Get Multiple Opinions and Perspectives
We are naturally drawn to people like ourselves who share our views, experiences, values and belief systems, all of which are important. They are important for hiring the right fit, but they are also biases that come into play when making hiring decisions. Having more than one perspective is the best way to see through these blind spots. Get as many people as is practical involved in the hiring process to gain a 360 degree perspective of who is being interviewed. No candidate is perfect by any means, but even if a great candidate comes through your door, your team should know as much about their flaws and shortcomings as possible.
Give Them Projects Before You Hire
Nothing is more telling than inserting a candidate into the actual work situation. Many companies have taken to serving up projects to candidates, and some even go so far as to throw them on the team for a few days to see how things go. Although this short timeframe does not paint a complete picture of your candidates, at the very least it can give you a glimpse of who you might be hiring, how they fit the team’s culture, and what to expect when on-boarding them.
Give Them A Contract Trial Before Hiring Full Time
Similar to handing candidates a project before hiring, many companies opt to bring on great candidates as contractors for a limited period of time, giving them the opportunity to be thrown into the actual mix, get their hands dirty and provide a real world view of the hire to both the company and the candidate. Although not all candidates take kindly to this approach, many see an equal opportunity to determine whether they like the company as well. In the end, if either party is dissatisfied with the arrangement, the relationship ends, the company has no obligation and the candidate has a short contract gig to show for it.
Hire With An Exit Strategy Built In
With the evolving trend of talent moving from company to company after 2 or 3 years, some forward thinking organizations have begun hiring with this trend in mind. Rather than bringing a candidate on and hoping for the best, companies are hiring for a fixed amount of time, building in the scope of work and expectations over that time period. At the end of that period, both the hire and the company can choose whether the employee should move on to a new venture or explore options for staying.
In the end, nothing can protect a company 100% of the time from making bad hires. Sometimes employees will leave after a few months, and sometimes you have to let people go. But preparation goes a long way towards minimizing your risk and handling the situation when it arises.
With the level of competition for talent in today’s tech world, early stage companies must work hard to attract the talent critical to their success. Companies put hundreds of hours into hiring, spending thousands of dollars to attract and retain the right people, with good reason; the right hires make a direct impact on a company’s success and growth. But all of this time, effort and money may be spent in vain if companies are not honest with the candidates they hire about work, expectations and the company’s state of affairs. Understandably, companies want to paint an attractive picture for talented candidates because, well, they want to attract them. But as important as attracting candidates is, being transparent with them is key.
It Creates The Right Expectations
Working for startup companies is difficult enough as it is. Working for one without clear expectations, cloudy roadmaps and unknown or unanticipated structural issues can be a recipe for failure. It’s understandable that a company would want to make the right impression in an effort to attract top candidates, but expectations are powerful and setting the wrong ones early on can result in a difficult onboarding, a poor work experience and a shorter tenure for employees. Be clear and accurate when describing to potential employees the state of company affairs and expectations for performance.
It Attracts People Who Can Handle It
An accurate picture of the work, expectations for employees and a clear view of the company’s state of affairs may indeed scare off some of your potential hires. To that, I say, good. Employees who can’t handle the realities of your company and flee from accountability are the last thing any early stage venture needs. Anyone worth hiring should know going in that startups are no picnic. The flip side to this is painting a rosy, less than accurate picture of things, and anyone worth hiring should know better.
It Opens The Door For Improvement
Setting clear expectations and being open and upfront when hiring can actually help to address issues and problems you are facing. Issues cannot be addressed unless they are known and acknowledged. Being upfront with candidates can result in finding great hires who may know how to navigate issues, and can even help address and overcome obstacles.
It can be uncomfortable for founders and managers to set clear expectations for candidates for fear of losing out on good people. But in the long run, a transparent approach to hiring will yield happier, more prepared and more productive hires.