How to Know When It’s Time to Hire Your First Employee

Episode Summary

Hiring your first employee is one of the biggest milestones for any small business owner. In this episode of The Profit Pillars Show, Parker Stevenson, CEO of Evolved Finance and author of Profit Pillars, explains how to know when it’s time to move beyond contractors and bring your first employee onto your team.

Parker starts by addressing the legal and financial implications of hiring. Many online and modern small business owners rely heavily on contractors, but state laws are getting stricter about worker classification. He explains why some contractors (especially those working full-time, only for your business) may actually need to be classified as employees. Misclassifying workers can lead to penalties, back taxes, and expensive surprises, which is why consulting with a business attorney before hiring is crucial.

He then explores the financial efficiency of hiring. When business owners are paying multiple contractors for ongoing operational work, the total cost often exceeds what a single full-time employee would cost. Hiring an employee can create smoother communication, better workflows, and deeper business knowledge especially for roles that support daily operations, marketing, and client delivery.

Another key insight from this episode is the value of having a right-hand person in your business. As your workload grows, managing multiple contractors can become overwhelming. Parker explains how bringing on an employee who’s invested in your company’s success allows you to delegate confidently and focus on growth activities that actually move the business forward.

Parker also dives into team culture, explaining how even small businesses benefit from creating a workplace where people feel valued and connected. While contractors often juggle multiple clients, employees are more likely to be loyal, engaged, and motivated to help your business thrive. He shares lessons from Evolved Finance’s own growth, highlighting how leadership coaching and culture-building transformed their operations and long-term success.

Finally, the episode wraps up with practical advice on payroll and tools that make paying employees easier than ever before. Services like Gusto simplify compliance and payroll processing so small business owners can confidently take that first step toward building a real team.

By the end, you’ll have a clear understanding of the five key questions to ask before hiring, how to stay compliant with employment laws, and why your first employee might be the smartest investment you ever make in your business’s future.