You started your contracting business solo. You did the work, sent the invoices, answered the phone, and drove the truck. Now you’re turning down jobs because there aren’t enough hours in the day. That’s the signal: it’s time to hire.

But hiring your first employee is one of the scariest steps a contractor takes. Get it right and your business doubles. Get it wrong and you’re worse off than before. Here’s how to do it right.

When to Hire (and When to Wait)

Hire when at least two of these are true:

  • You’re consistently turning down work due to capacity
  • You have 3+ months of steady revenue (not just one big project)
  • You’re spending more than 10 hours/week on tasks someone else could do
  • Your backlog is 4+ weeks deep

Don’t hire if you’re busy because of one large contract that ends soon, or if your pipeline is unpredictable. One slow month with payroll to cover will stress you out fast.

W-2 Employee vs. 1099 Subcontractor

This is the first and most important decision. Get it wrong and the IRS will make your life miserable.

W-2 Employee

  • You control what they do, how they do it, and when they work
  • You handle payroll taxes, workers’ comp, and unemployment insurance
  • More expensive upfront, but you get loyalty and control
  • Best for: full-time help, apprentices, someone who works exclusively for you

1099 Subcontractor

  • They control their own schedule and methods
  • They carry their own insurance and handle their own taxes
  • You just pay them for completed work
  • Best for: overflow work, specialized skills, project-based help

The IRS test is simple: if you control the how, when, and where — they’re an employee. If you only control the final result — they’re a subcontractor. Misclassifying a W-2 as a 1099 can result in back taxes, penalties, and fines.

When in doubt, consult an accountant. The $200 consultation is cheaper than the $20,000 penalty.

Where to Find Good Workers

Finding reliable help is the hardest part. Here’s where successful contractors look:

Trade Schools and Apprenticeship Programs

Contact your local trade school or union hall. Students and recent graduates are eager to work, trainable, and often looking for exactly the opportunity you’re offering.

Referrals from Other Contractors

Ask contractors in complementary trades if they know anyone looking for work. The trades are a small world — word of mouth is still the best recruiting tool.

Job Boards

  • Indeed — cast a wide net with a clear, honest job posting
  • Craigslist — still works surprisingly well for skilled trade jobs in many markets
  • Facebook Groups — search for “[your trade] jobs [your city]” groups

Your Own Crew Network

If you’ve subcontracted with anyone who impressed you, approach them. “Hey, I’m building my crew — would you be interested in a steady W-2 position?” A known quantity is always better than a stranger.

Interview Tips for Contractors

Interviewing in the trades is different from corporate hiring. Here’s what matters:

Ask about specific jobs: “Tell me about the last project you worked on. What was your role? What went wrong and how did you handle it?” Vague answers are a red flag.

Test practical skills: If possible, bring them to a job site for a paid trial day. Watch how they work, how they handle tools, and how they interact with customers. One day tells you more than ten interviews.

Check references: Call two previous employers. Ask: “Would you hire them again?” The hesitation (or lack of it) in their answer tells you everything.

Look for reliability over skill: You can teach someone to do the work. You can’t teach them to show up on time, stay off their phone, and care about quality. Prioritize attitude and work ethic.

The Onboarding Checklist

Your first employee’s first week sets the tone. Don’t wing it.

Before Day 1

  • Set up payroll (Gusto and QuickBooks Payroll are popular for small contractors)
  • Get workers’ compensation insurance
  • Prepare a W-4 and I-9 form
  • Order any uniforms, safety gear, or tools they’ll need
  • Add them to your scheduling system — Crew Rivet lets you assign jobs to crew members and track their hours from day one

Day 1

  • Walk through your safety procedures
  • Show them how you communicate (texts, app, radio)
  • Set clear expectations: start time, dress code, phone policy, how to call in sick
  • Introduce them to your current customers on active job sites

Week 1

  • Pair them with you on 2-3 jobs so they learn your standards
  • Give direct, specific feedback daily (not just “good job”)
  • Check in at the end of the week: “How’s it going? Any questions?”

Common First-Hire Mistakes

Hiring a friend or family member first. It rarely ends well. If you have to fire your brother-in-law, Thanksgiving gets awkward forever. Hire a stranger you respect professionally.

Not having clear expectations. “Just help me out” is not a job description. Define the role, the hours, the pay, and the standards before they start.

Paying under the table. It feels simpler until there’s an injury on the job site and you have no workers’ comp. Or until the IRS audits you. Do it right from the start.

Waiting too long to fire a bad hire. If someone isn’t working out after 2-3 weeks of clear feedback, let them go. Every week you wait costs you money and morale.

The Payoff

Your first good hire changes everything. Suddenly you can take on two jobs at once. You can focus on estimates and sales while your employee handles production. Your revenue grows without you working more hours.

It’s scary, but every successful contractor has been exactly where you are right now. Take the leap — just do it methodically.

Ready to manage your growing crew? Try Crew Rivet free for 60 days — scheduling, job assignments, time tracking, and crew communication in one app.