This is the second in an ongoing series covering the value legal agreements bring to your business beyond the surface. From boosting your bottom line and expanding your business, to hiring the most talented team and improving every relationship you enter into, this series offers a comprehensive look at how effective legal agreements can enhance just about every aspect of your operation.
When it comes to onboarding a new team member, whether they are an employee or an independent contractor, it’s fairly common to have the relationship not turn out quite the way you had hoped it would. This occurs because the individual either doesn’t provide the services you thought they promised they would provide, or they fail to live up to your expectations in some other way.
The cost of team-member turnover could be one of the highest expenses in your business, not just financially, but in terms of time and energy, too. In many cases, changing up your agreement process can ensure you are hiring the right people, who will be with you for a long time and grow alongside you and your business.
Most business owners have a standard employment agreement signed by all team members or no signed agreement at all. In either case, you are setting yourself up for loss right from the start. Every single person you hire, whether as an independent contractor or as an employee, must sign an agreement, not because it’s required by law, but because it’s going to save you from big losses down the road.
Your agreement needs to be as specific as possible about your expectations for the relationship, establishing metrics for success and time frames for specific goals and objectives to be achieved. When you share these expectations, metrics of success, and time frames with your new hire, you are setting them up to succeed from the very start. And you are giving them an opportunity to clarify whether the expectations are clear and can be met.
Rather than using a generic legal agreement you find online, you should always work with an experienced business lawyer, who can create comprehensive agreements for both employees and contractors that are specific to your business. In this way, you can have a solid agreement template, including fill-in-the-blank provisions for your specific expectations, metrics, and time frames for each hire, all ready to go whenever you onboard a new hire.
What’s more, a trusted lawyer can customize your agreements to make them more personal, catering to your specific needs, style, and way of doing business. Having well considered and customizable agreements helps you make better hires because it forces you to be proactive and think through your expectations for the relationship ahead of time. It forces you to consider what kind of things will make the relationship a thrilling success, along with what could cause the relationship to fail.
The more important the new hire is, the more time you should take to negotiate the terms of the relationship. As the business owner, you can provide the template, or base agreement, and then give the new team member the time and space to review it with you and ask questions. Taking the time to carefully review and consider the agreement together is extremely important and should not be overlooked.
If you are bringing on a business partner or a high-level team member, I can promise you this: There will be a time in the future when you will no longer want to be in business with that person. And if you don’t have a sound agreement in place that provides you both with clarity on how and when you will no longer be in business together, you can run into a host of problems that you just couldn’t anticipate in the beginning.
It’s vital to create solid agreements from the beginning of your working relationship. By doing so, you can tailor those agreements to reflect your current understandings, as well as address future issues and outcomes.
When used wisely, agreements can provide you with a solid foundation for the relationship when hiring your new team members or bringing on your new business partners. Keep in mind, your agreements aren’t about the paper; they are about the process. You’ll want to work with an experienced lawyer who understands this concept and can guide you through the process, so that you can focus on growing and scaling your business.
This article is a service of Davidek Law Firm, PLLC. We don’t just draft documents; we ensure that families and business owners make informed and empowered decisions about life and death, for themselves and the people they love.