Hiring your first employee is an exciting sign that your business is expanding. However, it's important to be sure that you're getting the right person for the right role - and to make sure that both you and your future employee have a mutual understanding of what this means.
Determine what exactly the role will require. Once you have an understanding of the role requirements, do some research to find out what other businesses are offering for this kind of role. If you're unable to provide anything within this salary range, you may have to adjust your expectations of the role. Remember, you must pay your employees more than minimum wage.
Once you are determined the role and its salary, create a job description. Job descriptions generally follow the following format:
Decide where the role would be best advertised. You may choose to work with a recruiter, or alternatively, there are job sites and platforms like LinkedIn where you can list the job yourself. There are strict regulations around recruitment, so make sure that you are aware of these: read about preventing discrimination on gov.uk.
Interviews are key part of the hiring process for both you and your potential employee. An interview gives both parties the opportunity to determine whether the role is a good fit. It also allows you and your future employee to find out whether you have good rapport. This particularly important in a small business when you'll be working closely at all times. Once you are happy with the number of applicants that have been interviewed, shortlist suitable candidates.
A contract of employment is crucial to the hiring process. It is a formal agreement between the employer and employee. The bare minimum that can be provided to an employee is a "statement of terms", which must be provided to the employee within two months of their start date. Most employers provide an employment contract, which is more detailed than simply a "statement of terms". This reduces the likelihood of misunderstanding the terms of employment, between the employer and employee.
Note: Remember to make sure that you are registered with the HMRC as an employer. This is something that you will have done already if you are employing yourself as a director of your company.
A contract of employment should include the following:
There are a number of checks that should be carried out on an applicant to ensure that they are suitable for the job. These checks vary according to the role your are recruiting for, but may include:
As an employer, you will need to make sure that you have employers' liability insurance in place. Employers' liability insurance is a legal requirement for any business - regardless of size - that employs people. It will cover the cost of claim and legal defence expenses and compensation should an employee get injured or become unwell as a result of the work they are carrying out for the business.
There are many regulations around employment. Some that you may need to carry out include*:
Sole traders can hire employees. However, like other businesses, they must collect income tax and National Insurance Contributions (NICs) from employees and pay these directly to HMRC. This involves operating a PAYE (Pay As You Earn) payroll scheme.
Alison Wild BCom (Hons), MAAT, ATT, Taxation Technician is a highly respected industry professional who has been working with and advising SMEs in areas including tax, pensions, insurance and marketing for over 25 years. She is a member of the Association of Accounting Technicians (AAT) and Association of Tax Technicians (AAT) and also has considerable experience as a residential landlord.
Date: June 05, 2018
Category: Small Business