How to Interview Employees and Contractors (A Small Business Guide)

When you're a small business owner, a bad hire costs more than money — it costs momentum. Yet most owners interview on instinct: a nice conversation, a good feeling, an offer. Gut feel is exactly how you end up with a great talker who can't do the work.

A structured interview beats gut feel every time. Here's a framework you can run in 45 minutes.

Before the interview: define what "good" looks like

You can't evaluate a candidate against a vague idea. Before anyone walks in (or logs on), write down:

• The 3–4 outcomes this role must deliver in the first 90 days
• The skills that are non-negotiable vs. nice-to-have
• One or two real tasks they'll actually do

If you want a head start, AI is genuinely useful here — see our guide on how to hire with AI for generating role scorecards and question banks.

The four-part interview structure

Run every interview the same way so you can compare candidates fairly.

1. Warm-up (5 min)

Put them at ease. Nervous people interview badly and it tells you nothing. Explain the structure so they know what's coming.

2. Behavioral questions (20 min)

Past behavior predicts future behavior better than hypotheticals. Ask for specific stories:

• "Tell me about a time you had to figure something out with no instructions. What did you do?"
• "Describe a project that went sideways. What was your role in it, and what did you do about it?"
• "Walk me through a piece of work you're proud of, start to finish."

Listen for specifics and ownership. Vague answers ("we just worked hard") and blame-shifting are red flags.

3. A real task or work sample (15 min)

The single best predictor of job performance is watching someone do a scaled-down version of the job. Give them a real (small) problem and talk through it together. Skills show up here that no question reveals.

4. Their questions + logistics (5 min)

What they ask you is data. Great candidates ask about outcomes, expectations, and how success is measured. No questions at all is a mild red flag.

Red flags to watch for

• Can't give specifics. Everything is "we" and generalities.
• Blames everyone else for past failures.
• No curiosity about the actual work.
• Inconsistencies between their resume and their stories.
• Disrespect to anyone "below" them (including you, if you're not the "important" person in the room).

Interviewing a contractor is different

If you're hiring a 1099 contractor rather than a W-2 employee, the interview shifts:

• Evaluate the deliverable, not the person's fit with your culture. You're buying a result, not a teammate.
• Ask about their process and independence. Contractors should control how they work — that's part of what legally makes them contractors.
• Check their portfolio and references hard. You have less time to course-correct.
• Confirm the scope and rate up front, and get a W-9 before the first payment.

Getting the classification right matters for taxes and liability — read 1099 vs W-2 worker classification before you decide, and set contractors up cleanly with the contractor payments tool.

After the interview: score, then decide

Immediately after, score the candidate against your scorecard while it's fresh. Don't let a single charismatic moment overwrite a pile of mediocre answers. Compare candidates on the same criteria, not on who you "clicked" with.

Frequently asked questions

What's the best interview question for a small business?

"Tell me about a time you had to figure something out with no instructions." Small businesses need self-starters, and this reveals them instantly.

Should I give a work sample or paid test project?

Yes — a small, realistic task is the strongest predictor of performance. For larger tasks that take real time, pay for them.

How is interviewing a contractor different from an employee?

For contractors, focus on the deliverable, their independent process, and portfolio/references — not culture fit. Confirm scope, rate, and collect a W-9 up front.

How many people should I interview before deciding?

Enough to have a real comparison — usually 3–5 for a role — but don't drag it out so long you lose good candidates to faster-moving competitors.

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Structure turns hiring from a gamble into a decision. Define the outcomes, ask for specific stories, watch them do real work, and score before you fall in love. When you're ready to move faster, pair this with how to hire with AI.