It is a familiar dilemma for many small businesses and sole traders. Business is booming and the future is looking decidedly bright. But with the amount of work coming through the door, it sometimes feels like there are not enough hours in the day.
The last thing you want is for your customers to suffer because you can’t cope with demand. Perhaps now is the right time to take your business to the next level and think about hiring your first employee?
Good people will be a valuable asset to any business – the right person will bring knowledge, experience, enthusiasm and maybe even a different skillset to those you already possess.
However, it’s a big step for any small business and one you will want to get right. If you’re looking to take on your first employee soon, take a look at 5 things to consider.
Is It the Right Time?
Timing is everything. If you take on someone too soon, the extra expense can have a negative impact on your business, cause cash flow problems and leave your new employee feeling unfulfilled – especially if there is not enough work to keep them busy.
However, wait too long and your business may suffer because you are unable to meet demand, satisfy your customers or reach your full potential.
So how will you know? If you start having to turn away business because you can’t handle it alone, that’s a sure-fire sign that the time is right to hire an extra pair of hands. Maybe you will get to the stage where you need to hand over day-to-day administration so you can concentrate on growing the business and using your skills to their best effect.
Or, there may come a time when you realise your knowledge in a specific area is lacking and you need to work with someone who has more expertise. That’s when it’s time to start hiring.
Finding The Right People To Hire
The first thing you will need to do is draw up a job description. This will ensure you have a clear picture in your mind of what skills and experience you want your new employee to possess, as well as the scope of their role and responsibilities.
This is a crucial step, not only in understanding exactly what help and support you need, but also for potential candidates to know what will be expected of them and if they have the skills and experience needed. If you’ve never had to do this before, there are many online resources to help you get started.
When looking to hire, there are a number of avenues you can use to advertise your position without necessarily needing to pay for the services of a recruitment agency:
- LinkedIn, Facebook and other social media platforms.
- Reed, Indeed, CV Library and other online job platforms.
- Networks such as business groups.
- Attend job fairs or host a drop-in career session.
Space To Grow
Another important factor in taking on your first employee is where they will work. If you are currently working at home, can you expect them to join you at the kitchen table surrounded by the children’s breakfast bowls?
Perhaps instead, you will want them to work from their own home, or maybe you will need to take on some dedicated office space. It needs careful consideration, as does any decision that will impact on your overheads.
Legal Obligations When You Become an Employer
As soon as you become an employer, there are many compliance issues to consider and you must ensure that you adhere to the latest regulations affecting employment law. These include:
- Setting a wage for your new employee, note that this must be at least the National Minimum Wage (NMW).
- Checking that your new employee has the legal right to work in the UK.
- If you work in specific fields such as security, you’ll need to check if you need to apply for a DBS check.
- Ensuring you have employers’ liability insurance as soon as you become an employer.
- Sending details of the job in writing to your new employee, this must include the terms and conditions of the role.
- Telling HMRC that you are an employer by registering as an employer.
- As of October 2017, all new employers must automatically enrol your employees into a workplace pension scheme.
To help with this process, you can get advice from a trusted advisor who can help you understand your legal obligations particularly around payroll. The most cost effective way to obtain this is by outsourcing your payroll so that you not only get the right advice but someone to help manage the process for you.
Health and Safety Obligations
The minute you take on an employee, their health and safety during working hours is your responsibility. If they fall ill due to their working conditions or have an accident at work, you could be liable. To cover yourself against compensation claims and for your employee’s protection, you are required by law to have employers’ liability insurance cover of at least £5m.
This may seem like a lot of information to digest and the jump from working on your own to being an employer is certainly a mammoth one. However, with the right workforce in place, your business will be able to grow and flourish.
Need a Hand?
We are here to provide help and guidance to businesses that are about to take on their first employee. If you’re currently going through a stage of growth and are concerned about your tax or payroll obligations with the arrival of a new employee, we can help.
Give one of our team a call today on 0117 379 0810 to book in for a free, no obligation consultation.
- The Job Retention Bonus – What You Need to Know - July 15, 2020
- Coronavirus Job Retention Scheme – Updates From 1st July - June 17, 2020
- What Benefits Could Outsourced Payroll Bring Your Business? - May 28, 2020
This post was written by Steph Roffey