What to look for when hiring a designer!
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1) Passion, vision and self-motivation. Without these, you’ll be dragging a rock. You need someone who shares your vision. Nothing’s worse than a “what-do-you-want-me-to-do-next?” kind of designer. Well, no, yes there is. One who’s touchy and confusing, too.

2) Vocabulary. A creative lead should be able to articulate what’s happening and why, in language that you and your staff can understand. If you start hearing vague terms like “pop” and “impact,” make him explain what he means. Listen for, “If we do A and B, we can expect C.” This is not trivial.

3) Inquisitive intelligence. Look for someone who’s curious about almost everything and approaches life with a sense of wonder. Similarly, I want someone who’s taken the time to learn about my company and whose questions are perceptive.

4) Good conceptual skills. There are many ways to achieve any stated design goal. Conceptual skills find the new and interesting ones. You might articulate a hypothetical situation and ask her to describe three possible directions. Prepare to get out of your box. The best concepts are often unrecognized at first.

5) A portfolio. You’ll know in 15 seconds the designer’s skill level. Compare his work to excellence that you’ve seen, and don’t compromise. If it’s below what you’re seeking, end the interview right there. Politely, please.

6) Projects. If you see a lot of one-off stuff, no matter how attractive, it won’t tell you much; most designers can do nice, single pieces. Look for complete projects — Web site, print material and stationery, for example — that share a common look and purpose. Such work is more difficult to visualize, organize, and execute.

7) Real-world experience. The emphasis here is on “real.” Always ask under what conditions a design was achieved. How did the designer interact with the client? What was the role of each? Time frame? Revisions? Budget? Fantastic “portfolio pieces” are less desirable than solid design done under realistic conditions. If you find both, cheer!

8) Production skills. Your person will need production skills or know how to hire them. Nothing will slow you quicker than not being able to make something happen that you want to happen. Also, someone who understands typography is preferable to someone who can just type. Likewise, someone who understands the guts of Web coding is preferable to someone who can just run Dreamweaver.
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Miscellaneous notes:
It goes without saying that personalities must be compatible. Never hire an otherwise perfect candidate assuming that “he’ll change,” or that “you’ll change her.” You can usually feel the vibe right away. Trust it.

Even if you (both) like the vibe, it’s a good idea to establish a trial period. A person can be qualified and compatible, but for one reason or another can’t get the work done. You’re out of rhythm. Your work styles don’t jell. Something was misunderstood. Whatever the case, give yourselves at least a 90-day period in which either of you can terminate employment at will, for no cause at all. This is good for both of you. Creative work comes from love, passion and relationship. It can’t be faked.

Consider hiring and working long distance. Design is perfect for this, what with live chat and e-mail and FTP sites. I’ve worked with designers for 20 years who I’ve yet to meet face to face! If face time is really important, fly in once a month. That said, remember that it’s a slow market, and you may find the perfect someone who’d love to transfer to your area!

If your designer works from home, arrange for a trial period. I had a designer who tried working from home and his productivity plummeted, yet another thrives at home.

Last thing. I don’t look for a college degree. About 50% of my lifetime hires have had degrees. The average difference in skills is slight. The ones who’d been in good design programs were better than those who hadn’t, but such programs are not plentiful. I have observed, speaking broadly, that the college people tend to show better discipline in their work.
There are, of course, exceptions to all of this.