HR advisor Sara Nicholson joins Jet Bunditwong to explain what small-business owners should understand before hiring their first employee. Sara shares practical guidance on employee-versus-contractor classification, onboarding, documentation, behavioral interviews, managing conflict, and building teams with clarity and empathy. Learn more at https://sdivsbdc.org.
Transcript note: This transcript was lightly formatted for readability. Speakers are Jet Bunditwong and Sara Nicholson.
Jet Bunditwong: Welcome to The Personal Side of Business, where every business has a story. Today my guest is Sara Nicholson. She's a human resource advisor with the SBDC here in San Diego. Welcome to the podcast, Sarah.
Sara Nicholson: Thank you so much for having me. It's a joy to be here.
Jet Bunditwong: You're welcome. So tell us, how did we get here?
Sara Nicholson: HR never was actually on my radar. I got my degree in accounting once upon a time, and that evolved into a career in the hospitality industry over in Hawaii. I had a wonderful career with Marriott International. Then it came time to shift gears and come back to the mainland, and I was able to work in HR in various positions within healthcare industries, private industries, construction, and more.
Jet Bunditwong: What was it that you picked up from being in a corporate setting that carried over into you being a good advisor in human resources?
Sara Nicholson: Clarity of the rules. It wasn't about micromanaging anyone, but understanding labor law guidance, applying common sense, and thinking about the human element. Putting that all together was really attractive and easy to get behind.
Jet Bunditwong: I always think starting in corporate lets you see what’s really right before getting into gray areas. If someone starts out as an entrepreneur and jumps straight into HR, they may not know what’s right or wrong.
Sara Nicholson: I’m very grateful for starting at ground level in the hotel where I worked. I got to be the first person employees saw — they saw my bowl of candy and stopped there. That’s where conversations started. I didn’t have authority to speak for directors, but I could direct people and fine-tune those human connection moments.
Jet Bunditwong: Having HR must help buffer entrepreneurs from dealing with things they don’t want to deal with.
Sara Nicholson: It’s partly a buffer, but really it’s collaboration. HR is the oil in the engine. Many people see HR as telling them what to do, but it’s a partnership. Especially in California, we have extensive labor laws. They exist because people were taken advantage of. HR helps you hire correctly, maintain compliance, and separate employees properly if needed.
Jet Bunditwong: It probably reduces mental and emotional stress for entrepreneurs.
Sara Nicholson: Absolutely. And at the SBDC, 99.9% of what I do is talk about HR foundations — what you need before you even think about hiring. I don’t recommend specific vendors; I educate on what entrepreneurs need to know.
Jet Bunditwong: What foundational pieces should entrepreneurs have in place?
Sara Nicholson: Start with your business entity. Are you set up correctly? Do you have the right licensing? General liability insurance? Possibly errors and omissions? Then your EIN, state employer ID number, workers’ compensation, payroll, timekeeping, employee classification, and workplace safety. There’s a long checklist before hiring.
Jet Bunditwong: Entrepreneurs often feel like the ground is moving fast and they just need to hire someone immediately.
Sara Nicholson: Yesterday. Yes, panic mode. And many think they can just hire independent contractors. But AB5 changed the laws. Misclassification can lead to lawsuits. Please consult an employment attorney before casually classifying someone as a contractor.
Jet Bunditwong: California can be confusing.
Sara Nicholson: Completely confusing. That’s why I created HR boot camps at SBDC. First session: preparing your business for employees. Second: do’s and don’ts of hiring. Job descriptions are critical. Then behavioral interviewing — asking candidates to describe processes instead of yes/no questions.
Jet Bunditwong: Does interviewing change across generations?
Sara Nicholson: Not really. Younger generations are incredibly savvy. They research interviews deeply. Don’t assume they know less. They’re empowered and fearless.
Jet Bunditwong: What’s a major HR myth?
Sara Nicholson: That HR is evil. We’re not evil — we’re guardians of the gate. HR is about boundaries with humanity. There’s black and white and lots of gray. HR is often the “no” person every business needs.
Jet Bunditwong: Is AI going to heavily affect HR?
Sara Nicholson: AI is useful for documentation and organizing training materials. But it can’t replace human judgment. I had a client who thought employees cost 15% more because AI told her that. In reality, costs often start at 25% and go up.
Jet Bunditwong: How can entrepreneurs on a budget attract good employees?
Sara Nicholson: Have your act together. Be organized. Be kind, fair, direct, and honest. Understand benefits and policies before interviewing. Confidence and clarity matter.
Jet Bunditwong: Culture seems important.
Sara Nicholson: Extremely. Culture isn’t about making people happy. You can’t make anyone happy. You create an environment where people flourish. Intentional culture attracts talent — even if pay is lower.
Jet Bunditwong: Does HR get lost as businesses grow?
Sara Nicholson: 100%. I’ve seen companies grow from 6 to 60 employees quickly. If HR isn’t scaled intentionally, it causes problems. Growth requires structure.
Jet Bunditwong: What about a four-day workweek?
Sara Nicholson: California has alternative workweek schedules like four 10s or three 12s, but they require legal compliance and employee votes. It depends on the industry. Administrative roles can adapt easier than service industries.
Jet Bunditwong: What would you tell your younger self?
Sara Nicholson: Be prepared for a solitary work life. HR departments of one carry huge responsibility. You must be proactive, empowered, and constantly learning.
Jet Bunditwong: Final question: Where can people find you?
Sara Nicholson: Through the San Diego & Imperial Valley SBDC at sdivsbdc.org. We serve over 11,000–12,000 unique people annually and help drive significant economic growth in San Diego.
Jet Bunditwong: Thank you so much for being on the podcast.
Sara Nicholson: Thank you. It was a joy to be here.
Jet Bunditwong: …John A. King: …