7 Keys to Hiring Your Start-up's First Employee

Hiring your first employee is a huge step for your start-up. In addition to the sudden sense of responsibility (you’re now in charge of someone else's livelihood!), it’s a strong signal that your company has real merit: Someone has chosen to turn down other opportunities to help make your idea happen . And in many cases, he or she is embracing a significant amount of risk to do so.

But the most fundamental way in which it changes your business is bandwidth. A new person dedicating all of his or her time and focus to the company means that suddenly you get to move faster. A lot faster.

At my company, ReWork , it took over a year to get to the point where we were ready to bring someone else onto the team. We didn’t read any here’s-how-to-hire-someone books, but instead relied upon our observations of other start-up experiences, and advice from our Unreasonable mentors. And after three months, 30 applicants, and a steep learning curve, we were able to find exactly what we were looking for. His name is Shane Rasnak, and he is awesome.

Based on our experience (and that of other founders we’ve talked with ), here’s the advice we’d give anyone else in this boat.

1. The Sooner, the Better (If You Can Afford It)

Hire someone as soon as you know that you need them and can afford them, even if it’s tight at first. The extra oomph that another person gives in brainpower, creativity, and sheer legwork is totally worth it. Things that would otherwise take you weeks will be doable in days. Entire work streams will disappear from your to-do list.

In many cases, founders who are reluctant to hire even when it’s clear they’re overworked end up kicking themselves later when they realize how much they weren’tgetting done while they delayed. We sacrificed our own pay to make room for Shane, and it was more than worth it.

2. Hire for Potential, Not (Just) Track Record

One key trait of a skilled hiring manager is the ability to see potential, not just evidence of past success. Look for someone who has a strong interest or passion for causes or missions that are similar to yours, and, separately, evidence that the person is really good at what he or she has done before (even if that’s a variety of different things).

Unlocking potential has to do with marrying someone’s skills and passions, so even if a person hasn’t yet found a way to truly unleash herself, if your position can do it for her, you’ll likely see results. We turned down applicants with Master’s degrees and 10 years of experience because we sensed that Shane had immense potential to excel at our company. Also, it was clear that he was interested in punching above his weight .

3. Have Applicants Demonstrate Skill or Aptitude

Many people know exactly how to answer interview questions in a way that instills confidence in a hiring manager. In short, it’s (relatively) easy to bullshit. So, research shows that the best way to vet someone is to have him or her complete a task for you—for example, if you’re hiring a salesperson, ask them to sell you something. We had our applicants create an outreach strategy to reach our target audiences, giving them relatively little direction to see how they would tackle the assignment without guidance. The results were telling, and those that clearly didn’t put the time or energy into making it quality were removed from the running.

4. Have Everyone on the Team Interview the Stars

Finding a cultural fit for your team is tricky. Just because Person A and Person B get along, and Person B and Person C get along, doesn’t mean that Person A and C will get along (let alone work well together). As three co-founders with quite differing personalities and work styles, it was important that each of us would work well with our first hire. So we interviewed him four times, twice after we knew he was our top choice. That may seem excessive, but we needed confidence that he’d fit in well. When each of us felt that we’d have a productive working dynamic with him, we knew we had the right guy.

5. Invite Them, Truly, to be Part of the Team

Once you hire someone, you have a choice: You can consider him an employee, in the sense that you issue him directives, evaluate his work, and compensate him for his time. Or, you can consider him a member of the team that has chosen to dedicate his time to making your vision a reality, including learning alongside you and experiencing the ups and downs of your venture. And the latter is one of the mainreasons why people join start-ups in the first place. We made it a point from day one to show Shane that he was part of our team, and that intention has already paid dividends.

6. Design an Onboarding Process

While we did some things right during the hiring process, there are others we would have done differently. For example, the extent of our “official” onboarding for Shane was a two-hour conversation on his first day on the job. Other than that, we tried our best to show our culture and expectations over the course of many smaller conversations. And though the result has been fine, we’d definitely do it differently next time—we would put together a series of sessions ranging from our culture and intent to company history and strategy. At the very least, having all these things spelled out means that everyone who joins the company will have the same experience.

7. Have Your Legal Ducks in a Row

Here’s a bold admission: We didn’t have an employment contract for Shane for the first six months that he was working for us. As a young business, we just hadn’t prioritized our legal documents. Again, though everything has turned out fine, I do notrecommend this approach. Not having a contract in place (or terms discussed with advisors and lawyers) meant that both Shane and our team were legally unprotected. Fact is, not all hires work out. And when you’re laser-focused on revenue and market development, the last thing you need is a legal headache. Knowing that everyone is officially taken care of means that you can focus on what matters most.

Your first hire is a huge step in the life of your company. Take the time to do things the right way, and you’ll make sure that your first employee will be there for the long haul—and be one of the greatest things to happen to your company in its early days.

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4 Tips for Better Employee Scheduling: Avoid Scheduling Abuses and Save Money

In recent months, scheduling abuse and “unfair scheduling” in the retail industry has come to light as a huge issue. As someone who has been subject to scheduling abuse myself, I can assure you that it is, in fact, a widespread problem that the retail industry not only needs to address, but is actually well-equipped to deal with.  

So what is scheduling abuse and how can you ensure that your store isn’t abusing employees?

Scheduling abuse comes in many forms and, overall, it means being a jerk to your employees. The most common form of scheduling abuse is known as on-call scheduling. That means employees are scheduled to potentially work a certain time. Employees must block those hours out in the day to be available IF their manager calls them in, but there’s no guarantee that they actually will work.

Typically, these hours are unpaid if the employee is not called in, and it means the employee is not able to schedule anything else that might prevent them from getting to work ASAP. For most people, this means they can’t plan errands, go to the doctor, pick their kids up from school, or other things you would usually do on a day off.

A few other major scheduling abuses include:

• Cancelling your employees’ shifts last minute. While it might seem nice to have a surprise day off, most retail workers do not have the budget to be losing hours, especially hours they counted on.
• Making the schedule only days (or hours!) in advance.
• Updating the schedule only days (or hours) in advance. I had a boss who not only did this, but then wouldn’t tell you she’d updated the schedule until you were late to a shift you didn’t know you had.
• Requiring your employees to stay past the time they were scheduled to, without asking if they were ok with that.

With the last two, at least employees get paid, but nothing makes a worker feel disrespected like their boss showing how little they care about that employee’s life by switching up scheduling and keeping them late without asking. Plus, most people have important things to do after work, like picking a kid up from school, or running to a doctor’s appointment. You can really ruin someone’s day, or worse,  by keeping them late.

Scheduling abuse occurs mainly because scheduling managers must keep to a very strict payroll budget. This strict budget is at odds with making sure you have enough people to man the floor at all times.

With this kind of tension, on-call scheduling actually makes a lot of sense. After all, it means that if the day is busy, you have someone on hand, but if the day is slow, you don’t have to pay anyone extra.

Changing the schedule in the middle of the week also makes a lot of sense. If you’ve been having a slow week, by Tuesday you know you need to cut some people to try and keep to the budget. Managers’ busy schedules don’t help either. Many managers end up prioritizing scheduling far down the line and, as a result, schedule only a few days in advance.

Ultimately, at best, this leaves employees with low morale, feeling disrespected by their employer. At its worst, it causes you to lose an employee because they had to go find a job with more stability and predictability so they could support their family.

This is not good news for you. Losing a $10/hr retail employee costs you $3,328 – so much more than actually paying them for the eight hour shift you didn’t need them to work. The retail industry has a turnover rate of nearly 70%, due greatly to scheduling abuse. That’s a lot of money lost.

Scheduling abuse is not only a horrible thing to do to your employees, but it’s actually a horrible business practice in the long term. A store staffed by ten people plus a manager is, on average, going to spend $23,296 a year to replace seven of those workers! That same store would only spend $8,320 a year if they consistently scheduled two “unnecessary” eight hour shifts a week for each employee. That’s a pretty obvious solution. Scheduling abuse = bad. Treating your employees well = good.

While scheduling abuse costs you more in the long term –even $8,320 is too much to bleed out. Is there a way to save all that money?

Actually, yes, there are a number of things you as a scheduling manager can do for your store to help cut down on your payroll budget, while still treating your employees well.

1. Know your store.

As a manager, you have access to a lot of information about your store – from how busy you’ve historically been on Mondays to what tasks which employees perform best. Use it. Spend some time with your POS’s reporting capabilities to determine your peak hours and best sellers. Armed with this knowledge, you can make better decisions about whether or not you should schedule that extra person for Tuesday night or not. You can also be sure to schedule your strong workers for peak hours, and your new or “better-at-folding-than-selling” workers for quieter hours.

2. Be considerate.

When your employees ask for a day off, do everything in your power to give them that day off and don’t make them feel bad about it. If you need an employee to work late, ask them ahead of time. If you need to make a change in the schedule, also ask your employees ahead of time and be willing to allow shift swaps. Make your schedule at least a month in advance.

Treating your employees respectfully and with care will keep morale high and foster loyalty. An employee who knows you care about them will be more likely to pick up an extra shift if you need, or accept a cancelled shift. (Pro tip: ask your employee if they’d be willing to take the pay cut for the day, and be ready to suck it up if they can’t.)

Overall, employees who are treated well will be understanding when times are tight, or when you didn’t schedule enough people. They know that you’ll do them a solid in return for their help in your time of need.

3. Hire dedicated on-call workers.

On-call is not a bad practice, provided you hire someone specifically for this purpose. The way on-call scheduling becomes abusive is when retailers hire without informing an employee this will be a large part of their job. It gets worse when employees are scheduled for on-call shifts without being asked.

Most retail employees need a stable paycheck and to be able to take care of outside responsibilities  like children. For them, on-call scheduling is a nightmare. However, if you hire employees specifically for this purpose, your store can have all the benefits of on-call scheduling without the major problems. Look for students or people who otherwise do not depend on this job for survival, and let them know explicitly they will be used for on-call scheduling.

4. Use scheduling software.

Employee Scheduling software is the best. It makes scheduling easier by allowing you to see the whole week, the hours you’re open, the availability of your employees, and how many hours you can schedule without going over budget, all laid out in a clean, visual manner.

Many solutions are even able to partially schedule for you, using an algorithm involving peak hours and best sellers. While software is not able to fully schedule by itself (yet), having a software that can pre-place best sellers according to highest sale hours not only saves you some time, but actually helps ensure your best people are always on your toughest jobs.

Scheduling software has other perks:

• It can display the schedule in an online portal or email to your employees so they don’t have to come or call into the store each week.
• It can automatically alert your employees when there’s been a change in the schedule.
• It can display open shifts to employees so they can choose their own shifts.
• If someone needs to swap a shift, it can let you know who else is available for the shift that needs to be covered. In fact, many solutions even let employees handle shift swaps themselves.

Scheduling software easily does the math to ensure you’re staying under-budget, and many times can act as your time clock, and integrate with your payroll software, making HR easier.

And there’s no reason not to have scheduling software. Many solutions are very cheap WhenToWork, for instance, is only $8/month (when you pay in advance for a year). You can even find a few for free!

More?

What works for you to avoid scheduling abuse and come in under budget? How do you schedule your retail employees? Let us know in the comments below!

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3 Employees You Should Fire Immediately

As a business owner, your time is limited; you hired a team of capable professionals because there's no way you can do it all. Even if your organization runs like a well-oiled machine, there's usually at least one team member who causes you more stress than the others.

You may not even realize it, but these "time-suckers" hurt your business by drawing your attention away from the tasks you need to do each day.

While there are many types of productivity-zappers in an office environment, none are as disruptive as those who directly impact strategic decision-makers. These three types of people should be removed from your staff as soon as possible.

1. The drama queen

If your office doesn't have a drama queen, consider yourself lucky. Found in almost every group of people, these individuals live life as though it's a reality show. They enjoy stirring things up, then sitting back to watch the fireworks. You'll likely find yourself frequently breaking up arguments between employees, only to find the resident drama queen at the heart of it. Whether it's exposing what someone said about someone else or accusing someone of neglecting his work, these individuals will constantly require your attention as referee.

Unfortunately, drama queens do more than simply waste worker productivity. Their behind-the-scenes conversations are often negative in tone, and the attitude can be contagious. This is especially true if the drama queen directs attention to the company's leadership, causing a general distaste for management that leads to greater problems within the organization.

Managing drama queens can be a delicate situation, since much of what they do is social. Some businesses have implemented no-gossip policies, but these policies are usually impossible to legally enforce. They can also lead employees to feel that their personal conversations are being monitored and judged. Instead, employers should document the behaviors that have led to incidents in the office and address themdirectly with the individual.

2. The victim

One of the toughest challenges of managing people is knowing how to handle the ones who like to play the victim. These people avoid accountability for their own actions, preferring to blame others for bad situations. They'll always have an excuse, and their constant complaints aren't missed by their co-workers, who can even begin to develop their own victim mentality as a result of seeing others do it.

Even stickier is the employee who seems to always have some ailment. While every employer wants his staff to be as healthy as possible, there are occasionally people who take advantage of the employer's generosity by claiming an array of medical conditions that, over time, turn out to be unfounded. Too often, the employer is left not knowing for certain if the person is truly ill or is simply trying to take advantage of the system.

The overriding issue in the workplace is how the person's actions are impacting the business as a whole. One person's chronic absences and refusal to participate will eventually be noticed by other employees, who likely will feel resentful about having to cover. To avoid issues, have a set policy in place regarding absenteeism, making it clear that after a certain number of days within a cycle, a doctor's notice will be required. When an assignment impacts a vast majority of the staff, make it clear that everyone is required to participate.

Keep careful documentation of each incident and, if issues persist, have a talk with the employee about their issues. Make it clear that if the person continues to miss work or decline to participate in work assignments, action will be taken that may include termination. It's important to review the Americans with Disabilities Act (ADA), since you'll be required to provide accommodations if the condition falls into an area that would be classified as a "major impairment."

3. The nonconformist

These rebels without a cause are determined to break the rules, from the simplest to the most complex. If you have a dress code that prohibits T-shirts with slogans, this person will wear one every Friday. If you have a set procedure for how tasks should be completed, they'll go off script every time. While some businesses are less restrictive than others, every business usually finds it must enact some rules to avoid problems and remain productive. These employees seem to see "rules" as "control" and want to battle you each step of the way.

Instead of engaging in a power struggle with these renegades, determine if there are ways you can work with rebels rather than against them. Often a rebel is nothing more than an independent thinker who wants to make a difference in the world, rather than just following along with what others tell them. If you can put these qualities to work for your organization, you may find you have an employee who can help your organization grow.

Sometimes, however, the rebel mentality comes from someone who takes it a step further and tries to take over. This person tends to come across as a know-it-all, refusing to listen to instruction and instead choosing to do things his own way. Worst of all, he may have appointed himself as a leader within the organization, ordering other employees around. If given enough time, this type of toxic behavior could drive some of your best employees away.

Whether an employee's independent attitude is a benefit to your organization or not, it can definitely take a toll on employee morale. As others see that someone is violating company policies, they may begin to wonder why they have to follow the rules when everyone else doesn't. For that reason, you'll have to enforce your company policies in a uniform manner, whether it's corporate dress code, office hours and attendance, meeting project deadlines, or some other clearly outlined rule.

Conclusion

Employee management is one of the toughest challenges for business owners. By identifying employees who drain productivity and slow your business growth, you'll be able to remove them and bring in professionals who will help you meet your long-term goals.

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20 TIPS TO IMPROVE EMPLOYEE ENGAGEMENT AND PERFORMANCE

High levels of employee engagement in an organization are linked to superior business performance, including increased profitability, productivity, employee retention, customer metrics and safety levels.
That’s way we all want employees to be engaged at work, right? But how can we actually get there?

#1 – Communicate clear goals and expectations to your employees

The majority of employees want to be a part of a compelling future, want to know what is most important at work and what excellence looks like. For targets to be meaningful and effective in motivating employees, they must be tied to larger organizational ambitions.

#2 – Share information and numbers

Let them in on what is going on within the company as well as how their jobs contribute to the big picture. When you keep you employees informed they tend to feel a greater sense of worth. Keep communication hopeful and truthful – do not be afraid to share bad news, instead be more strategic about how you deliver it. Improve performance through transparency – By sharing numbers with employees, you can increase employees’ sense of ownership.

#3 – Encourage open communication

You can get insight into what things are important to the employee by using surveys, suggestion boxes and team meetings. Be open-minded and encourage them to express their ideas and perspectives without criticism. This means putting into practice everything you have learned about effective listening. Address their concerns in the best way you can.

#4 – Not communicating or communicating late can damage engagement

Hearing about an important update from media, colleagues or family and friends can have a negative impact on employee engagement. Ensure employees hear these messages from the business as soon as possible.

#5 – Actively promote organizational effectiveness, reputation, values and ethics

Actively promote organizational effectiveness, reputation, values and ethics – Employees want to feel good about their leaders, where they work, the products they sell and the reputation of their company.

#6 – Culture

Encourage employees to find a personal fit with the company culture.

#7 – Let staff tell their own stories

Encourage them to tell their own stories about what they are doing to support company strategies or embody organizational values.

#8 – Trust

Employees need to trust each other as well as their leadership. Employees are constantly watching leadership to see how their decisions affect the strategic direction of the organization and if their behaviors reflect what they say.

#9 – Build engagement

Show that you’re genuinely concerned about employees’ opinions and use social media as a communications tool to build engagement.

#10 – Encourage innovation

Engaged employees are innovative. They’re always looking for a better way.

#11 – Create a strong team environment

Strong employee engagement is dependent on how well employees get along, interact with each other and participate in a team environment.

#12 – Sense of belonging

Non-work activities that foster relationships increase employee engagement.

#13 – Provide constant feedback on the positives

When people know what they’re doing well, they’ll keep doing it – or, even better, do more of it. Providing someone with a little recognition on what they’re doing well can go a long way toward boosting morale. This is not to say “ignore the weaknesses” – just don’t make the weaknesses the only focus area of feedback. This doesn’t mean you should not create accountability, it actually means the opposite – but, if all you do is criticize, people will learn how to hide their mistakes or shift blame.

#14 – Give immediate feedback

Feedback is two way communication. It is the opportunity to share opinions and find solutions. Too many managers think should be the province of the annual personnel revue. It’s not. It should be a daily occurrence.

#15 – Show how feedback is being used

Demonstrate to staff how their feedback is being used.

#16 – Support employees in their work and growth

How many of you have responded to a subordinate’s idea as brilliant or even good. Success begets success. You can support employee growth by providing education and learning opportunities, cross training, coaching, and any other interactions that support employees’ personal development.

#17 – Collaborate and share on problem-solving

When employees get the idea that their manager or leader is the one who has to solve all the problems, it takes away from their sense of empowerment, and ultimately is likely to decrease engagement over time. Encourage team members to take responsibility, and work through problems or issues on their own, or collaboratively. It’s not the manager’s job to fix everyone else’s problems.

#18 – Delegation

Delegation is good for you because it expands your managerial span of control. It’s good for your employees because it is a growth opportunity for them. It demonstrates your trust in them to do the job correctly and increases their ownership of the task.

#19 – Incentives

Incentives that are matched to accountability and results. Managers who want their employees to be engaged recognize that incentives must be allocated based on objective criteria and that different employees are motivated by different things.

#20 – Celebrate both financial and non financial achievements

Employees need to feel validated and that they are a valued part of the organization. Leadership needs to show how much they care for their employees and show recognition for efforts: “If you want something to grow, pour champagne on it“.

Employees don’t leave a company, they leave their manager. If you want to reduce turnover, improve the number and quality of your managers. The lack of employee engagement is a real problem, but effective managers can make a difference.

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6 Steps To Improving Your Current Employees’ Soft Skills

Let’s face it: Soft skills like critical thinking, emotional intelligence, and adaptability are necessary for all employees to have. However, the majority of attention in the management world has been focused more on hiring employees with those skills than developing them in current employees.

The term “soft skills” refers to skills like collaboration, problem solving, conflict resolution, and communication, which have more to do with how you act than what you know. Much of the time, these soft skills have to be seen “in action” and can be difficult to objectively measure (unlike technical qualifications, which can be tested).

However, when you look around your own office, it is usually fairly easy to find those employees lacking soft skills. They are the ones unwilling to accept any kind of change, the ones unable to properly manage subordinates, and the ones constantly upset about one thing or another (whether in their professional or personal life).

What should a manager do with employees lacking these skills? Fire them? Just put up with them? Why not help them develop the skills?

–– ADVERTISEMENT ––

During the past 25 years, various research has shown that emotional intelligence (EI), a key part of many of these skills, can be developed and improved (unlike IQ, which is static). This is great news for managers, because EI has been shown by expert and researcher Daniel Goleman to be twice as important as cognitive abilities in predicting outstanding employee performance.

So if it is possible to dramatically improve the key predictor of employee success, how would you go about it?

Soft skills can’t be learned by just studying about them. They have to be learned through a process of change that can be difficult and uncomfortable at times, but it can have dramatic effects on your company’s bottom line. The following six-step process is a basic overview:

1. WILLINGNESS TO CHANGE

While this isn’t a big step, it is an important prerequisite. You cannot force people to become more self-aware; they must be willing to begin the process of change themselves. If this basic building block is not present, there isn’t much that can be learned through this process. If this is the case in your organization, there are many good resources available for creating “readiness for change.”

2. EDUCATION

While learning soft skills is not simply “book learning,” there still must be an aspect of education on best practices. Reading books like Stephen Covey’s Seven Habits of Highly Effective People and Marshall Goldsmith’s What Got You Here Won’t Get You There are great starting places for learning the basics.

3. EVALUATION

It is one thing to know the best practices–it is another to know how you stack up against them. Assessments help to evaluate where an employee stands (areas of strength and areas in need of improvement) as well as to describe the natural tendencies an individual has. It is important to include both self-assessments (like the MBTI) and assessments that include input from others (like a 360-feedback tool), as both types give important feedback.

4. SELF-REFLECTION

Once employees have learned more about themselves (strengths, faults, tendencies, etc.), it is necessary for them to reflect on what they have learned. Are they humble enough to realize they aren’t perfect? Are they willing to put in the effort to grow even though it may be difficult and uncomfortable? Can they understand their natural tendencies and see how they interact with others?

5. GOAL SETTING

Defining a clear vision for the future is an important next step, which should involve choosing three to five tangible goals to work toward. These goals should be developed from the information learned through the process (especially feedback from others), and then should be shared with others (supervisors, direct reports, peers) so observers are able to notice the changes and hold the employee accountable (see Goldsmith’s Coaching for Behavioral Change for more rationale on this).

6. PRACTICE

Soft skills do no good in a vacuum. They have to be put into practice in “real life” over a long period of time. Some failure is inevitable, but growth will come. After a few months, employees working toward change should revisit the goals with coworkers to gauge the progress being made.

This process can be done on an individual basis or in groups; it can be completed internally or with an outside facilitator; it can be used at work or at home–but the key takeaway is that it is a process. It’s different than book learning and can take some time, so be patient. In the end, the time invested will be worth it–both to the employees involved and the company’s bottom line!

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Start-Ups Finding the Best Employees Are Actually Employed

When Ron Johnson was pitching his idea for an e-commerce delivery company to venture capitalists last year, one of the sticking points was his vision for how to treat employees.

Mr. Johnson’s company, called Enjoy, sends experts to deliver and set up tech products in homes and offices. But rather than requiring people to work as independent contractors, a practice championed by most so-called on-demand companies, including the ride-hailing app Uber, Mr. Johnson wanted to actually employ the people who would be working for him.

“I said there’s a good chance that one day there could be a change in how the law qualifies these contractor jobs — and I’d rather be taking the high road from Day 1 and not be subject to that business risk,” said Mr. Johnson, the executive who founded Apple’s retail division and later ran J. C. Penney.

The risk of relying on independent contractors became more salient with the revelation last week that the California Labor Commission recently ruled that an Uber driver should be classified as an employee, not a contractor.

While the ruling does not set a binding precedent, it may push some in Silicon Valley to look for alternatives to the contractor model. Mr. Johnson’s company is among a handful of app-based outfits that suggest there may be another way.

Though the start-ups that are avoiding the independent contractor system are far smaller than Uber, which has contracted with hundreds of thousands of drivers across the world, their nascent success offers hope that on-demand companies will be able to offer stable careers rather than an unpredictable patchwork in which people stitch together app-based tasks to make a living.

But it isn’t just the murky legality — or even what Mr. Johnson calls a moral obligation to do the right thing for workers — that has pushed these businesses to part with Uber’s vision for the future of work. Instead, they argue, real employees are better employees.

“We’re providing a personal service — our product is a person,” Mr. Johnson told me. “The vision says that it’s really smart to make them employees, so we can get the best people to deliver the best service.”

If you’ve ever wondered why there are such vast differences in quality between Uber rides you’ve taken, this is why: Beyond customer ratings and warnings, Uber can’t tell drivers what to do.

Under the independent contractor system, workers are considered to be tiny businesses responsible for their own expenses and taxes. A key feature of an independent contractor relationship is autonomy. According to the Internal Revenue Service, a business that hires an independent contractor is not entitled to dictate how or when the contractor performs a job. This limits a company’s power to train and schedule its workers.

The on-demand companies that have embraced the old-fashioned employee model all say they aim to deliver an experience that wows customers. The best way to do that, they say, is to train and systematically deploy their workers — a practice that can be accomplished only with actual employees.

“This is M.B.A. 101 stuff,” said M. Diane Burton, a professor of human resource studies at Cornell University. “When people are your source of competitive advantage, it’s clear that a long-term employment relationship and what we would call a ‘good job’ is good for the workers and good for the companies.”

At Beepi, a company that lets customers buy and sell used cars online, new auto inspectors are trained for three months to become “Beepi Certified” — a system that would not have been possible under the independent contractor model.

“The promise of our brand is that we are going to inspect every vehicle as if it’s one you’d sell to your mother or a good friend,” said Ale Resnik, the co-founder and chief executive of Beepi. “For that, you need people who are invested in the customer. They need to really care — and they only care when you invest in them.”

Tech people like to talk about “full-stack start-ups,” a new trend in entrepreneurialism in which companies aim to control every part of their service rather than just the technical aspects. Hiring front-line workers is the ultimate expression of the full stack.

“Fundamentally what it boiled down to was that we had to create good jobs to make sure that our operators were vested in our company,” said Saman Rahmanian, a co-founder of Managed by Q, a start-up that provides commercial cleaning and supply services.

Of course, creating “good jobs” entails costs. Managed by Q’s workers get an “above market” wage, plus full medical benefits. “They are the same benefits that our programmers and engineers get,” Mr. Rahmanian said, because “we didn’t want to create a company that had a divide between people that worked in headquarters and the others.”

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Munchery, a dinner delivery service, pays drivers a base wage that exceeds the minimum wage, plus their driving expenses, plus tips. Taken together, it comes out to about $23 an hour in San Francisco, far higher than most other delivery jobs. Those who work more than 30 hours a week also get health and retirement benefits.

Beepi’s auto mechanics and delivery people get an above-market salary, overtime pay and medical benefits. MoveLoot, a start-up that sells and delivers used furniture, also provides above-market wages and benefits to its workers.

And at Enjoy, which began operating in San Francisco and New York this spring, delivery experts are paid either a full-time or part-time salary, not a per-customer fee. Mr. Johnson declined to specify the salary, but he said that it was above what workers at high-end technology retailers might make — meaning around $40,000 to $50,000 a year. Enjoy’s employees are also given benefits like health coverage and retirement plans, and they even get stock in the company.

This week, Instacart, a grocery delivery company that is one of the largest and most successful on-demand companies, announced that beginning with its operations in Boston and Chicago, it will shift the independent contractors who now pick groceries in its stores to part-time employee status. (Workers who drive for the company will remain contractors.)

Instacart’s new employee plan is for part-time workers only, according to a company spokeswoman. Workers will not be able to schedule more than 30 hours a week, the threshold that would require them to receive health coverage.

It remains to be seen whether the costs of the shift to employment will impede growth. But for now these start-ups are all growing rapidly, and their business models have been blessed by investors who, while initially skeptical, have been won over.

“They were able to back it up with spreadsheets and projections, not just with enthusiasm and evangelism,” said Hunter Walk, a venture capitalist at Homebrew, a firm that has invested in Managed by Q. “When you look at the level of churn amongst the employee base and the customers, the high reviews from workers, the high customer-satisfaction rating — they were proving it from hard-core business metrics.”

This is not to say that Uber’s model is doomed. David Plouffe, Uber’s chief adviser and a board member, told me that a flexible schedule was one of the main benefits of working for Uber and that much of that flexibility would be lost under an employee relationship.

“We don’t have many drivers who are saying, ‘I’m going to do this for five, 10, 15, 20 years,’ ” he said. “We hope a lot of them do, but the honest truth is that many will do it in a more transitional nature, and it will ebb and flow. One week they may drive 30 hours, the next they may drive five.”

Uber, then, is for the in-between work in your life. But if you’re looking for a career, there are now apps for that, too.

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