Taking on staff for the first time

You don't have to be a limited company to employ staff, sole traders can employ staff too. 

But it's a big step for a small business so think carefully about what you need before you start hunting around for the right person!
    

What is it you want them to do?

Do you just want an extra pair of hands or should you take a longer term view on how to structure your business and what new skills to introduce.  Think about what tasks you're going to pass over and what you want to do that you haven't been able to do until now.  Seniority is important too - are you looking for a future manager and someone that can cover for you when you're away, or someone for a more junior or operational role?


Managing your staff, setting expectations and avoiding disputes

You're taking a big risk by introducing a stranger into your business and mistakes can be time consuming and costly.  Here's how you can mitigate some of the risks:
  • Use the right legal employment and HR forms and policies
  • Have an agreed job description from day 1
  • Set clear expectations on the level of performance required, and how it'll be measured
  • Agree a trial period of a few months
  • Be clear on what is, and is not, acceptable behaviour
  • Have clear and written guidelines on using the company's property and resources for personal use, including phoning and emailing
  • Have a written grievance procedure and disciplinary procedure
 

Ready to go ahead?


Make sure you go through the right employment procedures with our Checklist for Employing Staff.

Download these recruitment documents, employment contracts, and disciplinary procedures for full time and part time staff and freelance workers.

You must have employers liability insurance and display the certificate in every place your staff work.


      

Full-time, part-time, short-term, or freelance

Don’t just think you need to employ someone on a full-time basis on a full-time salary.  Why not employ someone part-time to start with until the role develops? Or a seasonal worker on a part-time basis just to cover your busiest times of the year? Or a specialist freelancer for a particular project?

Whichever you decide make it very clear from the outset what the role is, what the terms of the appointment are and how long it's for.  Put this writing and get you and the person you're hiring to sign it.


Expect to take a dip in profits

It's inevitable that your profits will go down in the early days as the same income is now going to cover 2 salaries.  Unless you've left it far too late that is, and have worn yourself well and truely into the ground by earning enough to pay 2 salaries already! (see our article on don't to do everything yourself).


Provision of staff pensions

From 2012 it's compulsory to either have a company pension scheme for your staff or to auto enrol them into the new National Employment Savings Trust (Nest)