Making your first hire is exciting, terrifying, and one of the biggest decisions you’ll make as a small business owner.
There comes a point in every growing business where you hit the wall. Not a metaphorical wall, a very real one where you physically cannot do any more work. You’re turning down jobs, dropping balls, working every weekend, and your quality is starting to slip because you’re stretched too thin.
That’s usually when the thought creeps in: “Maybe I need to hire someone.”
And then immediately after: “But can I actually afford it? What if it doesn’t work out? What if I can’t find the right person?”
Sound familiar? You’re not alone. Making your first hire is one of the most common, and most nerve-wracking, milestones for any Australian small business.
Signs You’re Ready (or Overdue)
There’s no magic formula, but here are some signals that it might be time to bring someone on board:
You’re consistently turning away work. If you’ve got more demand than you can handle and it’s been that way for a while (not just a one-off busy patch), that’s revenue walking out the door. A good hire could help you capture that growth.
Your quality is suffering. When you’re rushing to get everything done, things start to slip, missed deadlines, errors, less attention to detail. If your reputation is your business (and it always is), this is a serious red flag.
You’re spending time on the wrong things. If you’re the best person in the business at what you do, but you’re spending half your time on admin, bookkeeping, or tasks that someone else could handle, that’s a misuse of your most valuable resource, you.
You haven’t had a proper break in months. Burnout doesn’t just affect you, it affects your business. If you can’t step away without everything grinding to a halt, that’s a sign the business needs more than just you.
The Financial Reality Check
Here’s the part that trips people up. Hiring someone isn’t just about their wage. In Australia, you need to factor in superannuation (12%), workers’ compensation insurance, payroll tax (if applicable in your state), potential leave entitlements, and the cost of onboarding and training.
A rough rule of thumb is to budget around 20-30% on top of the base salary for the true cost of employment. So if you’re looking at hiring someone at $60,000, your real cost is closer to $72,000-78,000 per year.
Can your business sustain that? Look at your revenue over the past six to twelve months. If the numbers work with some margin to spare, you’re likely in a position to hire. If it’s razor-thin, consider starting with a contractor or part-timer to test the waters.
Employee vs Contractor, What’s the Difference?
Before you hire an employee, it’s worth considering whether a contractor might be a better fit. Contractors handle their own tax, super, and insurance, which simplifies things for you. They’re often more flexible and can be engaged for specific projects or busy periods.
But be careful with this. The ATO has clear guidelines about what constitutes a contractor versus an employee, and getting it wrong can result in significant penalties. If someone works set hours, uses your equipment, and essentially functions as a staff member, they’re likely an employee regardless of what the contract says.
Getting the Basics Right
When you do hire, there are some non-negotiables in Australia. You need to comply with the relevant Modern Award or enterprise agreement, provide a Fair Work Information Statement, set up PAYG withholding and super payments, arrange workers’ compensation insurance, and keep proper employment records.
It sounds like a lot, but there are plenty of resources to help. The Fair Work Ombudsman website is genuinely useful, and a good accountant or HR advisor can walk you through the setup. Getting it right from the beginning saves you a world of pain later.
Trust the Process
Hiring your first employee is a leap of faith, but it’s also a sign that your business is growing. The right person can transform your business, giving you the capacity to take on more work, improving your service quality, and finally giving you some breathing room. Take your time, do your homework, and when you find the right person, back yourself. This is what growth looks like.