How To Hire Employees for a Small Business: 10 Tips for 2026

Hiring the right workers is essential to the success of your small business. Because small businesses have a limited number of employees, you need to ensure each individual you invest in is qualified and motivated to contribute to your strategic business goals. 

Identifying and engaging individuals with the necessary skills and traits to thrive on your team can be challenging. However, with the right strategy and process in place, you can hire top talent who will drive productivity, innovation, and financial success for your small business.

Consider signing up for Upwork Business Plus if you have an immediate hiring need for your small business. Business Plus offers small business owners, operators, and founders like you instant access to the top 1% on Upwork and an AI-guided hiring experience to help you go from job post to project start within a matter of hours.

10 tips to hire employees for a small business in 2025 

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Whether you’re in the process of writing a small business plan to launch your company or looking to scale an existing business, the following tips can help you effectively hire the right workers for your team.

Tips include: 

1. Partner with a recruitment expert 
2. Identify your hiring needs and requirements
3. Define and follow a standardized hiring process
4. Write an engaging job description 
5. Promote open roles to attract qualified workers
6. Evaluate candidates 
7. Conduct effective interviews 
8. Check references and complete background checks
9. Extend an offer
10. Prepare for payroll and onboarding 

1. Partner with a recruitment expert 

Sourcing, evaluating, and hiring qualified workers can be time-consuming and requires thoughtful planning and expertise. However, many small businesses don’t have a dedicated recruitment or talent acquisition team so the owner or another business leader is often tasked with sourcing and hiring. 

If your small business doesn’t have a dedicated recruiter or HR leader, you may want to consider enlisting the support of an external recruiting assistant or talent acquisition specialist. A recruitment expert can help you better understand your hiring needs, implement an efficient process, and source and evaluate candidates to ensure you build a high-performance team for your small business. 

Through Business Plus, you can also have exclusive access to Uma Recruiter, an always-on hiring agent that reviews freelancer profiles and delivers within six hours a shortlist of curated freelancers whose experience and skills align with your specific needs.

"Upwork Business Plus allows our team to focus on our many tasks while enjoying the convenience of outsourcing certain tasks we may be too impacted to complete internally. We love the vast array of contractor options available." 

- Chelsea Beyer, Digital Growth Manager, Mutual of Omaha Mortgage 

2. Identify your hiring needs and requirements

Whether or not you partner with an independent recruitment expert, you should take the time to identify your hiring needs and requirements before beginning the hiring process. Outlining what you’re looking for can increase the likelihood of targeting the right candidates, while understanding specific requirements helps you stay within budget and maintain compliance with your hiring process. 

Ask the following questions to understand your specific needs and requirements: 

Business goals and strategy

• What are the short- and long-term goals for your small business?
• Which hard and soft skills or roles are most critical to achieving your business goals? 
• What are the key responsibilities of the roles you’re looking to fill? 
• Where do individuals with the skills you need look for open roles? 

Market, compensation, and work structure 

• What does the job market and competition look like for your immediate open positions? 
• What’s your budget for payroll expenses, including wages, payroll taxes, and benefits? 
• In addition to compensation, which benefits will you offer workers? 
• Will you offer remote or hybrid work opportunities? 

Hiring process and budget

• Who will be involved in the hiring process and final decisions?
• What’s your budget for recruitment and hiring-related expenses such as job postings, recruitment software, background checks, and training?  
• How may your hiring needs evolve as your business grows?

Legal, compliance, and worker classification

• Do you already have an employer identification number (EIN) or do you need to obtain one? 
• Which federal, state, or local labor laws apply for your open roles or business? 
• Who’s responsible for overseeing payroll and onboarding? 
• Do you need to classify workers as employees or independent contractors?
• Are freelancers the right fit for certain roles?

Rather than exclusively hiring full-time, in-house workers, expanding your talent pool to include freelancers offers your small business the flexibility to take a skills-based approach to hiring and more effectively address critical skills gaps at your organization. Skills-based hiring, also known as skills-first hiring, is a hiring approach that emphasizes engaging and advancing workers based on their skills, knowledge, and capabilities, over degrees or previous employers.  

Upwork’s 2025 In-Demand Skills report found that 81% of C-suite executives surveyed report that their organizations are taking deliberate steps to adopt skills-based hiring practices. And many organizations are turning to freelancers as part of their skills-based hiring efforts. The research also found that 51% of respondents believe conducting their business would be difficult without freelancer support.

3. Define and follow a standardized hiring process

As a small business owner or leader, you likely juggle many responsibilities across the business and have limited bandwidth to focus on hiring. However, defining and following a standardized hiring process can help you attract and engage the right candidates while driving efficiencies. 

According to a survey of more than 1,700 hiring managers at small and midsize companies conducted by Robert Half, nearly four in 10 respondents agreed that losing a top candidate to a competitor due to a slow hiring process is a top concern for 2025. 

Benefits of defining and following standardized steps in your talent acquisition or hiring process include: 

• Reduced administrative time spent on hiring
• Increased efficiencies
• Decreased total hiring time 
• Lower hiring costs
• Minimized bias and more objective hiring 
• Objective candidate evaluation
• Stronger candidate engagement
• Improved hiring by continually measuring recruitment effectiveness 

4. Write an engaging job description 

Each time you have an open role, creating a clearly articulated job description has a significant impact on your ability to attract qualified, motivated workers for your small business. In addition to taking your business needs into consideration, write job descriptions or job posts with your ideal candidate’s perspective to excite top talent about joining your team. 

Whether your small business needs to fill an entry-level position, leadership opening, or any role in between, an effective job description should include the following elements: 

• Job title
• Employment type, such as full-time, part-time, or contract
• Employment location, including whether the role is in-person, remote, or hybrid 
• Brief summary of the position
• Overview of responsibilities
• List of required skills, characteristics, and qualifications
• Scope and timeline for freelance or contract roles
• Background information, including details about your company culture, mission, benefits, recent workplace awards, and more
• High-level list of steps to expect during the recruitment process

If your small business has limited resources or internal expertise to write a compelling job description or craft a winning job post, you can simplify the process when you hire freelancers on Upwork. Job Post Generator powered by Uma™, Upwork’s Mindful AI, helps you create an AI-generated job post in seconds — simply share a sentence or two about what you’re looking for with your open job.

5. Promote open roles to attract qualified workers

Once you write a job post or job description, reach candidates where they’re looking for roles by promoting open roles across diverse sourcing channels. 

Your small business may have a limited budget to invest in talent sourcing channels; the costs associated with job board advertisements, recruitment agencies, and other paid recruiting options can add up quickly. To reach a broad talent pool without breaking the bank, use a mix of paid and free or low-cost recruitment channels. 

Consider the following channels to promote your open small business roles and attract top candidates: 

• Your company careers pages
• Talent marketplaces like Upwork 
• Free and sponsored posts on traditional job boards
• Industry-specific job boards 
• Employee referral programs 
• LinkedIn and other social media networks
• University or college career centers
• Professional networking groups
• Local or virtual job fairs
• Classified ads or local classified websites like Craigslist

By posting an open job on Upwork, you have the option to use Featured Jobs, which highlights your job to attract top freelancers and enable making quality hires faster. Featured Jobs are displayed more prominently, increasing the visibility of your listing to top candidates.

6. Evaluate candidates

Receiving an influx of applications, resumes, or proposals can be overwhelming for your small business hiring team — especially if you’re the only person reviewing candidates. According to research from LinkedIn, 22% of HR professionals surveyed spend from 3 to 5 hours a day reviewing applications. As a small business owner, spending hours each day reviewing potential candidates takes away from other critical day-to-day and strategic responsibilities across the company. 

Rather than manually reviewing each individual, which can be time-consuming and introduce bias into the hiring process, automating candidate screening can speed up the hiring process and help your team evaluate all potential team members objectively. 

Ways to evaluate and screen candidates include:

• Sending a brief automated prescreening survey to filter out workers who aren’t a good fit
• Using resume parsing features offered by AI recruiting tools or small business applicant tracking systems (ATS) such as BambooHR or JazzHR to automatically review applications 
• Administering talent assessments using free or low-cost assessment tools like TestGorilla or iMocha
• Reviewing prospective team members’ portfolios
• Asking individuals to complete a paid test assignment or share a presentation 

Through candidate evaluations, Uma evaluates proposals to help you quickly identify and hire qualified freelancers for your open job. After reviewing proposals, Uma generates a side-by-side comparison, which provides insight into how each freelancer’s skills and experience align with your job requirements.

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Keep in mind, while technology solutions can help you simplify candidate screening and evaluations, a member of your team should always make a final hiring decision to ensure any worker you hire is the best fit for your small business.

7. Conduct effective interviews 

While a candidate’s resume, application, proposal, and assessments can provide insight into their experience and qualifications, the interview stage enables you to get to know an individual on a personal level and hear about their background firsthand. 

The best practices below can help you conduct successful interviews at your small business:

• Write interview questions ahead of time to ensure you cover all relevant questions
• Include a mix of questions that assess an individual’s hard or technical skills as well as behavioral questions to better understand how a prospective worker may collaborate with your team 
• Use a scheduling tool like Calendly to streamline interview scheduling  
• Leave time for candidates to ask questions 
• Evaluate all interviews using a standardized scorecard or rubric 

As a small business owner, you may be the only person involved in the interview process. However, if you already have employees on board, consider scheduling a few rounds of interviews, such as discussions with the manager for the specific role and peer interviews between the candidate and potential teammates. 

Hiring freelancers for a short-term project doesn’t necessarily require an in-depth interview process. On Upwork you can access and receive proposals from qualified candidates who already have detailed profiles, featuring an overview of their experience, examples of projects, and reviews from past clients, among other information. Then, you can use Upwork’s built-in video meetings feature powered by Uma, which offers video, audio, background blur, and AI-driven recording and recaps. Meetings can be scheduled or started directly in Messages and AI-generated highlights, summaries, and transcripts are stored for six months. 

You can also use the built-in scheduling tool and Zoom integration in Upwork Messages to schedule and conduct brief phone or video interviews and determine which candidates are the best fit for your open roles.

8. Check references and complete background checks

Following the interview stage, you may be close to making a hiring decision. Before extending an offer, ask candidates for references and conduct background checks. 

A background check enables you to verify an individual’s identity using information from public or private sources. Information highlighted in a background check report may include an individual’s past addresses, criminal record, educational background, driving record, employment history, and credit reports. Completing background checks before extending an offer can minimize risks and legal liabilities.

By conducting reference checks with professional contacts, you can verify a candidate’s qualifications, past performance, work ethic, and job history — including the dates they worked for a company. Typically, employers ask for a few reference contacts, at least one of whom worked directly with the candidate in a managerial role.

Reference and background check software solutions like RefNow, Vitay, and Zinc can save your small business time by helping you avoid playing phone tag with reference contacts or manually searching for information about each candidate’s background. 

9. Extend an offer

As soon as you select your top choice for an open role, move forward with extending the offer. Top job seekers are often in high demand and receive multiple job offers in a short period of time. A formal job offer should clearly outline the job type (such as contract or full-time), duties, salary or pay rate, benefits, and expected start date.

The following steps can support a smooth offer process for your small business

• Align on a top candidate with all decision makers if multiple team members are involved in the hiring process
• Create a formal offer letter with all essential details
• Contact the candidate via email or direct message to schedule a time to discuss the offer
• Extend the offer directly over a phone or video meeting
• Allow time for the candidate to ask questions
• Be prepared to answer questions or negotiate 
• Follow up with a written offer letter for the candidate to sign

When you hire a freelancer on Upwork, you can complete the offer process in a few clicks. After you select the ideal freelancer based on your needs, simply click “hire” on their proposal. This action automatically creates a contract offer and enables you to pay the freelancer with a single click once work is completed.

10. Prepare for payroll and onboarding

Whether you’re hiring your first employee or continuing to grow your small business, preparing for payroll and onboarding can support a smooth start for new team members and help your business maintain legal and tax compliance. 

Here are some actions you can take to prepare:

• Obtain an EIN through the Internal Revenue Service (IRS)
• Register your small business with your state’s labor and tax departments to comply with employment tax regulations
• Ensure workers complete new hire paperwork including tax and payroll forms 
• Accurately classify new workers as employees or independent contractors 
• Determine how you’ll manage payroll — such as manually, through an accountant, or with small business payroll software such as ADP, Paychex, or Gusto
• Develop and implement an onboarding process with steps such as gaining access to systems and equipment from IT, attending training sessions, filling out additional paperwork, completing assignments, and meeting colleagues

Upwork makes the process of onboarding and paying freelancers easy and secure. You can get started working with a freelancer as soon as an offer is signed. Upwork offers safe, easy payments, Upwork Payment Protection, and flexible billing options for milestones or hourly projects. 

As a Business Plus customer, you can manage and pay freelancers — sourced on or off Upwork — in one place using Direct Contracts. With Direct Contracts, you can onboard external freelancers quickly and centralize essential information in a single dashboard, including contracts, timesheets, payments, messaging, and advanced reporting. Flexible payment options are also available, including hourly, one-time, and milestone-based payments.

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Small business resources

In addition to the tips and best practices outlined above, check out the following resources to learn more about hiring qualified employees and growing your small business.

• Why SMBs Aren’t Built To Grow Fast — and How To Fix It
• Level the Playing Field: How SMBs Leverage Tech To Compete with Giants
• Small Business Trends Report: What's New and What's Next?
• Small Business Challenges in 2025: Overcome the Top Obstacles
• How To Write a Small Business Plan in 2025: A Beginner’s Guide‍
• How To  Find Freelancers and and Vet Them in 2026‍
• Employer of Record: Guide for Small Businesses‍
• 23 Ways To Build a Successful Team in 2025‍
• Best Finance Apps for Small Business Budgetin‍
• Business Plan Examples and Templates for Startups and Growing Businesses‍
• 5 Web Pages Any Small Business Website Should Have

Find qualified talent for your small business on Upwork

Hiring employees for expanding a small business is an exciting milestone. With the right team in place, you can continue to achieve your business goals and drive further growth. While hiring employees may seem daunting — especially if you’re overseeing the process on your own — it doesn't have to be overwhelming. 

Upwork can help you identify and engage qualified freelancers whose skills and experience align with your business needs, while saving time and resources so your lean team can focus on other priorities. Hire freelancers on Upwork or upgrade to a Business Plus plan to reach the top 1% on Upwork across multiple categories and gain exclusive access to talent shortlisting powered by an always-on hiring agent.

Get started today. Log in to your existing account or create an account. 

If you’re a skilled freelancer looking to expand your client base and work with a diverse set of clients from solopreneurs to small businesses to enterprises, search for jobs on Upwork today. 

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Upwork is not affiliated with and does not sponsor or endorse any of the tools or services discussed in this article. These tools and services are provided only as potential options, and each reader and company should take the time needed to adequately analyze and determine the tools or services that would best fit their specific needs and situation.

This article is intended for educational purposes and should not be viewed as legal or tax advice. Please consult a professional to find the solution that best fits your situation.