There comes a point in every contractor’s journey where you cannot physically do more work. You are turning down jobs. You are working 60 hour weeks. You know you need help, but the idea of hiring terrifies you because of the cost, the liability, and the risk. Here is how to approach it rationally.

When to Hire (And When Not To)

Hire when you meet all three criteria:

1. You have been turning down work consistently for 2+ months (not just a random busy week)
2. You have 3 months of operating expenses saved (the buffer you need if the new hire does not work out)
3. You can afford to pay someone even during a slow month (their paycheck does not depend on you having a perfect month)

Do not hire just because you are busy this week. Hire because you have proven demand that exceeds your capacity over a sustained period.

The Real Cost of an Employee

A $20/hour employee costs you significantly more than $20/hour. Here is the full picture:

That $20/hour employee really costs you $24 to $27/hour. Make sure your pricing accounts for this. If you currently charge $75/hour as a solo operator, you need to charge at least $50/hour for the employee’s time to cover costs and maintain margin.

Employee vs Subcontractor

Many contractors start with 1099 subcontractors instead of W-2 employees. This avoids payroll taxes, workers’ comp, and benefits. However, the IRS has strict rules about who qualifies as a subcontractor. The key test: do you control how and when they do the work? If yes, they are likely an employee regardless of what your paperwork says.

Misclassifying employees as subcontractors can result in back taxes, penalties, and legal issues. When in doubt, consult with an accountant or employment attorney.

The Hiring Process

1. Write a clear job posting — include specific skills required, hours, pay range, and physical requirements. Post on Indeed, Craigslist, Facebook local jobs, and your trade’s community boards
2. Screen by phone first — a 10 minute phone call saves hours of in-person interviews with unqualified candidates
3. Do a paid trial day — bring them on a job for a day at an agreed day rate. See how they work, how they communicate, and if they show up on time
4. Check references — actually call their references. Most people skip this step and regret it
5. Start with a 90 day probation period — make it clear that the first 90 days are a trial for both sides

Your First Hire Should Be a Doer, Not a Manager

Hire someone who can do the physical work so you can shift toward running the business: estimates, customer management, marketing, and quality control. Your first hire doubles your production capacity while freeing you to grow the business. That is the leverage that takes you from technician to business owner.

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