For small and medium-sized enterprises, taking on your first employee is a big milestone. Like most things there are advantages and disadvantages to the process.

To help you out, we’ve put together a quick guide with the key areas of focus.

Pros

Let’s start with the benefits. Perhaps you’ve been busy for a while and have had to hire in the odd contractor here and there. Hiring a permanent member of staff may work out cheaper than a freelancer or contractor, you won’t need to continually train somebody for the role and they may generally be more loyal to your business. You may also be able to cope better with the ebb and flow of your business and best of all, you can take holiday knowing that your business is hopefully in safe hands.

Cons

But of course there are downsides too. You’ll have to pay a regular salary at an agreed time every month so you need to ensure you have the money and you will be responsible for added expenses, such as sick pay and holiday pay. There is the inevitable paperwork to complete, and advertising and interviewing potential employees can be expensive and time-consuming.

Hiring Your First Employee

Write a job description, detailing the role you’re advertising for including the tasks and responsibilities, hours of work, location and whether it’s full-time, part-time, temporary or permanent.

Next, write a person specification, detailing the essential and desirable skills, knowledge, and qualifications you’re seeking. Then decide on the wages you wish to pay, which must be at least the National Minimum Wage1.

Advertise the role where you’re most likely to find potential candidates – online is usually cheaper than in local newspapers, and the Government’s Universal Jobmatch scheme is a great place to start2.

Before hiring your preferred candidate, you need to carry out a few checks, including whether that person has the legal right to work in the UK3 and whether you need a DBS check4 if they are likely to be working with vulnerable people.
You also need to provide them with a written statement of employment5.

Setting Yourself up as an Employer

The final piece of the puzzle is ensuring that you’re set up as an employer.

In most circumstances where you employ staff, you will require by law to have employers liability insurance. This covers you if an employee falls ill, is injured or killed, or their property damaged as a result of working for you. This includes cover for work-related anxiety or stress6.

In addition, you need to register with HMRC as being an employer before the first payday, although you can only register two months before you start paying people7.

Finally, from 2018 all employers must provide a workplace pension for eligible staff, so you need to start thinking about setting up an appropriate pension scheme and making contributions8.

1. https://www.gov.uk/national-minimum-wage
2. https://www.gov.uk/advertise-job
3. https://www.gov.uk/legal-right-work-uk
4. https://www.gov.uk/disclosure-barring-service-check
5. https://www.gov.uk/employment-contracts-and-conditions/written-statement-of-employment-particulars
6. https://www.gov.uk/employers-liability-insurance
7. https://www.gov.uk/register-employer
8. https://www.gov.uk/workplace-pensions-employers

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