If your freight brokerage has reached the point where you’re considering hiring employees, you’re not alone. Around 20 million employees in the US, more than 15% of all workers, work at a company with 20 or fewer employees. Hiring that first employee can be a milestone for your business that helps determine your growth prospects for years to come. The decision to hire and the process of making that hire should not be taken lightly.
Should You Hire?
If you’re considering hiring, that almost certainly means that you’ve grown your business to the point where you can no longer manage it alone, or you foresee reaching that point very soon. Congratulations on your success so far. The first thing to do is stop and think about whether you need to hire someone, or if you might have better ways of getting help. Hiring an employee is a major, ongoing investment that changes the way your business operates, even if the employee doesn’t work out. Before you hire, check to see if there are services or contractors that can do what you need.
If there’s no service for what you need, or it looks like you’re going to need those services so much that it’s more cost effective to have a full-time employee, that’s when it’s time to move ahead with hiring. Be careful though, just because you’re sure you need to hire doesn’t mean you have all the information you need.
There are some important details in hiring that can’t be overlooked, and frankly aren’t fun to research. Fortunately, there are resources available to help. The Small Business Association (SBA) has a guide to help hire and manage employees. It’s likely to be an important resource for you, since your area of expertise probably isn’t HR. The SBA’s guide should be able to help you through some administrative requirements, required and optional employee benefits, and other laws you might need to understand. Make sure to look at your state’s laws as well, which the SBA has aggregated in a link on the same page.
A common question for freight broker agents when hiring is whether they can pay their employees commission only. As with most employment questions, the answer is more complicated than a simple yes or no. That said, you’re probably going to be held to federal minimum wage and overtime requirements.
Reading the link above, you’re naturally going to be drawn to the outside sales exemption. It’s possible that someone working in your agency will qualify for that exemption, but it’s a high standard. The Department of Labor defines who qualifies for the outside sales exemption, including that “The employee must be customarily and regularly engaged away from the employer’s place or places of business.” On page two of that same document, you can find that ANY fixed site qualifies as your place of business. The phrase “customarily and regularly” is less clearly defined, but court cases seem to view this as a high standard as well. Bottom line – unless they mostly travel to customer locations, they probably don’t qualify, and will need to be paid at least minimum wage, plus 1.5 times minimum wage for hours worked over 40. They can be commission only, but you’re on the hook for the difference if their commissions are less than minimum wage would have been.
So now we’ve got the scary stuff out of the way. Those requirements are a big part of the reasons we talked about whether you can find support without hiring in the first section. Here’s the good news: if you’re heavily leveraging outside services to get your day-to-day work done, or you’re not growing because you just don’t have the help in the office, then a new employee can be a great investment – as long as you hire a good one.
How to Find and Interview Candidates
It’s almost unfair to small business owners that when it’s time to grow, hiring becomes maybe the most important factor in your success. That almost certainly wasn’t the skill that made you decide to start your own business in the first place. For freight brokers, booking loads does very little to prepare you to find and interview potential new employees, so you’re left with a whole new skillset you need to learn.
There are more ways to find candidates than we could ever discuss here, so let’s just talk about what works for small businesses. You need to compete with everyone, so take the advice of baseball great Willie Keeler and “hit them where they ain’t.” Major companies are prevalent on top job sites, so check out sites that serve your specific industry like Jobs in Logistics. Talking to people in your network is also a great idea. In a small business, being linked up with candidates by people who know you and the candidate can help make sure you’ll have a cultural fit. You’re not just asking them for help, you’re looking to potentially give someone they know a great opportunity.
No matter where your candidates come from, it’s important to go into hiring with a plan. You want to make sure that you’re asking relevant questions to help you identify the person who best fits the job and your business. Keep in mind, too, that you are trying to grow, and the person you hire today needs to be a good fit for the organization you want to become. You need to decide ahead of time the skills and temperament that you’re looking for and how you’re going to identify those.
To do that, really stop and think about why you’re hiring. It can be tempting to hire “another you,” someone who reminds you of yourself, has a lot of the same skills, and can back you up on almost anything. Undoubtedly, that person can make your work easier, but is that the best move to help your business grow? After all, your business already has you. Consider what this person needs to be best at. If you’re looking to offload the tasks that you enjoy least or struggle with most, another person like you may feel the same way. If you’re just overwhelmed with volume and need someone to back you up on everything, it could work. Even if that’s the case, though, it might make more sense to let a hire take on administrative work so you have more time to do what you do best.
It’s easy to overlook the importance of the employee’s first few days in a new job. Before they start, you should have a checklist. They probably need a computer and a phone, but what else? If they’re working from your office, where are they going to sit? If they’re working from home, how’s their internet service? There are probably all kinds of logins, licenses, and software they need in order to do what you do. It’s best to have all of that in a list and even set up ahead of time to make a good impression, but that’s a small part of onboarding.
Your new employee is looking for a paycheck, of course, but the best employees are usually looking to grow and advance. They’re going to want training, not just in a formal setting but from you every day. None of that starts the day they get to the office, but it’s a good idea to make sure they know you’re there to help them learn. Employee retention is tough in an age where people have unlimited access to information and employers can hire in your neighborhood even if they’re a thousand miles away. Ultimately, you can think all you want about compensation, benefits, and titles, but your employees want to feel good about their work.
Making sure your employees find their jobs fulfilling, while also making sure they are a good fit for you, is a tough task. There’s no one way to make sure you hire the right people, but if you make sure you have a clear understanding of your needs and what you’re offering through your hiring process, onboarding, and during their time at your company, you and your employees will be far better off.