Taking on Your First Employee

Employing staff 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 process.

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

Advantages of employees

Perhaps you’ve been busy for a while and have 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 won’t need to repeatedly train new people – saving you time. Hopefully, you’ll build trust and a sense of loyalty to your business from your employee. 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 every month, so you need to ensure you have the finance and income to commit to this. 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.

If you decide to take on a new employee, where do you start?

Here are some steps to follow to 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 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 any specific experience is required. 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

  1. 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. You should advertise on your website if you have one and even your personal social media accounts. Speak to suppliers and companies you deal with; they may know of people looking for opportunities.

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

  1. Selecting and interviewing

You need to confirm that 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 is 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 will 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 will need to run a DBS check if they are likely to be working with vulnerable people.4

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

  1. 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 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 will be required to have employers liability insurance by law.5 This covers you if an employee falls ill, is injured or killed, 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 HMRC as being an employer before the first payday. However, you can only register two months before you start paying people.6

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.7



  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/dbs-check-applicant-criminal-record
  5. https://www.gov.uk/employers-liability-insurance
  6. https://www.gov.uk/register-employer
  7. https://www.gov.uk/workplace-pensions-employers

You Could Save Over 20%*

Contact our team to receive a no obligation, instant quote today.

* Please click here to view our pricing disclaimer.

Want more? Subscribe to our bulletin.

Quotes from well-known and specialist insurers, including:

Insurers smei work with