Taking on New Employees

Hiring Employees for the First Time

Running your own business can be empowering and rewarding. But you could find yourself working long hours, and having responsibility for every aspect of your business can be challenging.

You may decide to ease the pressure by employing staff. Taking on your first employee is a significant milestone. Like most things, there are advantages and disadvantages to the recruitment process.

To help you out, here are some points to consider.

Advantages of Employees

Perhaps you’ve been busy for a while and you’ve had to hire the odd contractor here and there. This flexible approach may work short-term, but taking on a permanent staff member could work out cheaper than a freelancer or contractor. You shouldn’t need to repeatedly train new people, which could save you time. Hopefully, you’ll build trust with your employee and create a sense of loyalty to your business. Imagine being able to take holidays knowing that your business is in safe hands!

Disadvantages of Having Employees

There are downsides too. You’ll have to pay a regular salary at an agreed time each month, so you need to ensure you have the finance and income to commit to this. You’ll be responsible for added expenses, such as sick pay and holiday pay. There’s the inevitable paperwork to complete, and advertising and interviewing potential employees can be expensive and time-consuming.

If You Decide to Take on a New Employee, Where do You Start?

Here are some steps to follow to help you recruit the best employee possible for your business.

1. Define the role

Your employee needs to be clear on what they are being hired for and what their job will entail. Set out a clear job title and description outlining key tasks and responsibilities, hours of work, location and whether it’s full-time, part-time, temporary or permanent.

Try and be specific about tasks but allow some flexibility so their role can adjust and evolve with your business.

Think about what type of person you need and if they need to have any specific experience. Are they going to be customer-facing? In that case, they’ll need strong communication skills.

Then decide on the wages you wish to pay, which must be at least the national minimum wage.¹

2. Advertise the position

Advertise the role where you’re most likely to find potential candidates. Online is usually cheaper than in local newspapers. The Government’s ‘Find a job’ service is a great place to start.²

People are increasingly using social media sites to look for work, particularly LinkedIn. You should advertise on your website if you have one, your company LinkedIn page and even your personal social media accounts. Speak to suppliers and companies you deal with and your local network/community; they may know of people looking for opportunities.

Be sure to specify what you’re looking for, how they should apply and when the deadline is.

3. Selecting and interviewing

You need to confirm your candidates have the right skills on paper, either through a CV or an application form. However, once you’re at the interview stage, it’s a good idea to test their skills and aptitude.

The easiest way to do this is to ask them to perform one of the tasks they’ll be doing in the role.

Before hiring your preferred candidate, you need to carry out a few checks. Confirm whether that person has the legal right to work in the UK,³ and you’ll need to run a DBS check if they are likely to be working with vulnerable people.⁴

There are a number of things you may need to ask your new member of staff to provide, such as: evidence of their qualifications, ‘right to work’ documents such as their passport or national identity card, and national insurance number to set up their salary payments.

You also need to provide them with a written statement of employment.

4. Appointing your new member of staff

It’s advisable to start a new employee on a probationary period. This gives them, and you, the chance to end the employment contract without any issue. It might be that you don’t work well together or they need a different type of job.

Ensure You’re Set up as an Employer

In most circumstances, when you employ staff, you'll have legal responsibilities.

You’ll usually need to have employers liability insurance by law.⁵ This covers you if an employee falls ill, is injured or a fatality occurs, or their property is damaged due to working for you. Employers liability also includes cover for work-related anxiety or stress.

In addition, you need to register with HM Revenue and Customs (HMRC) as being an employer before the first payday. However, you can only register two months before you start paying people.⁶

Before you can pay your new employee, you’ll need to check if you should be paying them through PAYE. You usually have to if they earn more than £123 a week (£6,396 a year).⁷

You’ll need to see their tax code and find out if they have a student loan to repay. These details are needed to set up your new employee in your payroll software.

Finally, employers have to provide a workplace pension scheme for eligible staff, so you need to start thinking about setting up an appropriate pension scheme and making contributions.⁸

You may also need to provide statutory sick pay. If you have multiple employees, you might want to look into a formal payroll software.

Then all that’s left to do is to make sure they feel welcome and part of your team!