Hiring your First Employee: When is the right time and how to be HR Compliant
As a business owner, hiring your first employee is a huge milestone! It is the first step in expanding your business. But hiring too early can also affect your cash flow, so it’s important to make sure that you’re hiring for the right reasons. Some indications that it might be the right time for you to hire, include:
If you’re turning down work.
You’ve developed a clear plan for growth with increased revenue streams.
Your customers are at risk of feeling undervalued because you aren’t able to give them the
attention they deserve.
The quality of your products or services are suffering.
You don’t have time to keep on top of your financial accounts.
Your growth plan requires a specific skill set.
Taking on your first employee is a big step. Whether you find the prospect daunting or exciting, there are some things to consider from an HR perspective to make sure that you are legally compliant.
Here are our top 6 things to consider when hiring your first employee:
1. Set your budget
When factoring in the cost of bringing an employee, you need to take into account not only what you will pay them, but also the cost of recruiting them. Some example costs can include:
Their salary (at least National Minimum Wage)
Employer’s National Insurance (NI) contributions
Their Holiday pay
Statutory payments such as sick pay, maternity leave and paternity leave
Pension contributions
Job advertising
Payroll
Employer’s liability insurance,
New equipment
Training
2. Define the role requirements
After you’ve decided that you want to hire someone and you’ve made sure that you can afford it, you should take the time to lay out your plans for how you would like them to spend their time and what you would like their focus to be. This is also a good point to decide whether they will be full time, part time or whether your plan is for them to work with you on a fixed term contract.
Details of their daily work requirements are best laid out in a job description and the skills and knowledge required to carry out the role can be put in a person specification.
To ensure you cover everything required we recommend that you use a template when creating these documents.
3. Advertise the Role
Once the role has been defined you can begin advertising. Choose the medium that will best suit your business and the type of candidate you’re trying to attract. For example, the amount of people who look for job adverts in a hard copy paper is rapidly reducing, with job seekers and prospective candidates more likely to look on specialist recruiting sites, LinkedIn or through a recruitment agency.
On the advert, specify how you would like the candidate to apply and include a closing date (and where possible interview dates).
Top Tip: If you ask applicants to apply by completing a standardised application form, you will be able to compare them against your required criteria more easily than receiving a pile of CV’s. This process will also sift out those who are serious about applying for the job compared to those who want to send out CV’s to every role going!
4. The recruitment process
To ensure fairness and compliance with equal opportunities legislation it is important to detail the process you’ll be following, including how candidates will be short listed and selected. Some things to consider include:
Advertise the vacancy (with closing date)
Shortlist applicants for interview against specific criteria
Interview candidates using a standardised list of questions with a score chart
Ask candidates whether they felt the interview process was fair
Depending on the role, do a skills test for all candidates
Select the successful candidate
Make a written offer (subject to references and checks)
Follow up references and checks including the legal right to work in the UK
Arrange a start date and induction
5. Know your legal requirements as an employer
As an employer, you need to learn a new set of legal processes and need to be legally compliant with the Equality Act of 2010 which aims to prevent discrimination in the workplace.
An HR consultant can help to ensure you are fully compliant but here are a few things to be aware of.
Give your employee their Contract of Employment or Written Statement of Employment
Particulars by the first day of employment, and their wider terms no later than their first day
of employment.
Take out employer’s liability insurance in preparation for becoming an employer.
Register with HMRC as an employer before the first pay day.
Check if you need to enrol your employee into a workplace pension scheme.
Comply with National Minimum Wage
Consider and protect the health, safety and welfare of your employee.
Adhere to UK Government employment rights.
You must have the following policies available for your employee:
Grievance Policy
Disciplinary Policy
Employer Privacy Notice
6. Managing your employee
Once your new employee commences employment, it is really important that you manage their probationary period effectively. Use this time to set out your expectations and provide clarity around what success looks like in the first few weeks and months. This time will also provide you with the opportunity to monitor how your new employee is performing.
Employees generally look for challenge and fulfilment in their work, but they also need structure, support, guidance and appreciation. They also need assurance that their salary will be paid on time and that they have opportunities for training, development and growth.
As an employer, you will need to monitor any absence, handle any problems which occur using discipline or grievance procedures, and review their performance with regular appraisals. If things are not working out, you’ll want to know how to legally let your employee go, and lots of that comes from the procedures and policies you put in place from your first day as an employer.
How Danton HR can help
Danton HR help business owners with all stages of the recruitment process and supporting their people once they have been brought on as an employee. We offer a free 30 minute, no obligation,
call for anyone wanting to talk through their plans. <Call now>
Employer Bundles
If you are bringing your first employee into your business our employer bundles give you the basics (and more!) that you need to get you legally compliant and getting the best out of your team. We offer a range of solutions depending on your requirements from the very basics to a broader suite of policies, procedures, templates, and guidance.