So, you’re ready to hire your first employee. Congratulations! This is an important milestone. And some extra hands about the place should take some of the pressure off.
Entrepreneurs are used to wearing all the hats, and if you’re hiring your first employee, it’s time to add another one to your already packed hatstand. The HR hat.
But it’s not something to be taken lightly. Donning the HR hat includes a fair amount of admin and there are plenty of pitfalls. Getting it right is a big responsibility. People are going to start relying on you to be able to pay their rent.
Here’s what you need to know about hiring your first employee.
The compliance stuff:
There are a few non-negotiable things that all employers must do to avoid running afoul of legislation and potentially being slapped with fines:
Register with HMRC – you need to tell HMRC about your new employer status before the first pay day of making your first hire. More info on that here. It’ll be your job to sort out payroll and ensure you’re compliant with National Minimum Wage rules, while making the necessary deductions for PAYE and National Insurance. If you’re unsure about this, small business HR and payroll software can help you take care of these tasks in moments and remove much of the risk of error.
Get insured – the Employers’ Liability (Compulsory Insurance) Act 1969 means nearly all employers are required to take out liability insurance, which will cover you in case of claims made against you if, for instance, an employee is injured or becomes ill at work. More info here.
Carry out applicant checks – the people you employ must be legally allowed to work in the UK. Also, if you’re working in a sensitive area like healthcare or childcare, you may need to request a Disclosure and Barring Service (DBS) check to ensure your new employee hasn’t got anything unpleasant in their past that would disqualify them from being able to do the work. More on that here.
Pension auto-enrolment – the requirement for pension compliance begins on the first day you employ someone. Even if your employees are younger than the state pension age (22) – meaning they don’t yet qualify for auto-enrolment – there are still compliance hoops you’ll need to jump through. The pensions regulator website will helpfully walk you through your responsibilities.
Absence and leave – there are a ton of rules around sick leave, holiday entitlement, maternity, paternity, adoption pay. It’s a minefield and if you don’t stay organised and keep track, it can easily turn into your biggest time sink. This is another area where decent HR software can save you a heap of time and stress.
Health and safety – although you don’t legally need a written health and safety policy until you have five or more employees, it’s still your responsibility to provide a safe and secure working environment. You’re not expected to remove every conceivable hazard, but it’s good practice to consider how people might be harmed at work and think about how to reduce the risk. The Health and Safety Executive has published some decent advice on this here.
Put it in writing – your new employee will need a written statement of employment from the first day of employment with you. This will include the important details: their name and the legal name of your business, their start date, job description, conditions, pay, hours, and place of work. It should also state holiday entitlement, including public holidays, and holiday pay. More on that here.
What employers wish they knew at the start:
We’ve been helping entrepreneurs manage HR for a decade – not only providing cost-effective software that makes HR admin easy – our team of HR experts also provide top-level HR advice and support to thousands of small businesses.
Here are some of the things they tell us they wish they’d known at the start of their journey as an employer.
Just do it
Bringing new people in can seem like an unnecessary expense when you’re used to working on your own. But lots of small businesses stay small because they delay bringing in the skills and talent they need, when they need it.
You’re passionate about your business. You put in long hours, live and breathe it, because it’s yours. And while it’s important to emphasise this enthusiasm when you’re talking to prospective new hires, be careful not to overegg it. You can hire good people, but if they start with false expectations you may struggle to keep them.
The startup environment is kind of unique and candidates coming from larger businesses – who might look great on paper – can sometimes find it a struggle to adjust to the lack of structure, hierarchy, and generally having to wear whatever hat that day’s challenge requires. That doesn’t mean they won’t be great; we’re just emphasising the value of startup experience.
Attitude vs experience
The most likeable person isn’t necessarily the best one if they can’t do what you need them to. That said, hiring someone you don’t like might not be much better in the long run. The attitude vs experience balancing act is something all hiring employers need to work out for themselves. Skills, however, can be learned, while a poor attitude is much harder to address.
Interviews can only tell you so much
Even if you’re the best interviewer in the world, you won’t learn as much from talking to someone as you will by seeing them in action. So don’t be afraid to test them, ask them to solve a problem or perform the type of task you’ll need them to carry out as part of their job.
Sometimes, you need expert help
Employment legislation is complex and getting it wrong can be extremely costly and damaging, both for you and your employee. So if you’re unsure, please speak to an expert.
Our HR software is designed for startups and small businesses. Thousands of entrepreneurs use it to take the guesswork out of HR.
The content of this blog is for general information only. Please don’t rely on it as legal or other professional advice as that is not what we intend. You can find more detail on this in our Terms of Website Use. If you require professional advice, please contact 0333 014 3888 or email firstname.lastname@example.org.
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