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Recruiting Your First Employee: What You Need To Know

Hiring your very first staff member is an exciting time within your business. It shows that you’re ready to start taking the next steps and a to embark on a new chapter within your company. We feel it’s important to establish some key steps to ensure you are 100% ready to start looking at employment, this post will cover some topics that should provide you with some peace of mind before you hire.

Firstly, it’s important to consider any work that can be done yourself, as this will reduce costs as much as possible. However, this can’t always be the case as it may not be possible to cover the work you need completed and in fact, hiring at the right times to reduce your own workload can give your business the boost it needs.

To have an extra pair of hands on deck and to even give you a different outlook on your current business activities can be the difference between a business failing or growing. It’s extremely important for the business to be in a comfortable position to pay the new staff member whilst still managing other costs.  

Yes, employees do come at a cost, but if your business can afford this cost it will allow you, the business owner to free up your time and to focus on the higher level areas that will help you grow the business further. You need to understand why you are hiring an employee and be clear about what role they will take before you start wasting time and money looking for the wrong person.

If you are ready to hire and have outlined what you will be comfortable to pay them and what position they will take, you can advertise the role yourself by using social media or job posting websites such as Indeed. Secondly, you may look to use a recruitment company to help you hire the right person. They usually hold a plethora of talent but remember that it will come at a cost. A recruitment agencies fees will increase in line with the salary you are offering.  In most cases, these fees range from 10%-30% of the yearly salary.

If you want to try and hire without a recruitment company, by using platforms such as Twitter, Facebook & LinkedIn, you have a wider scope at potential talent without paying the fees. It is important to remember that you may get contacted by individuals that do not have the skills you’re looking, which could potentially cost your time, which as a busy business owner, you do not want.

Things to look for in your first employee?

With your first hire, It’s important to look for someone with a wide variety of skills as initially they may be required to complete a range of tasks and activities as the business starts developing. Within time, they may fit them into a more specific role but this is an important point to consider with your first employee.

The candidate you may need will depend entirely on the type of business you are running and what exactly you need them to do. This also includes on the amount of money you are offering to pay them, candidates with a large range of skills and experience will expect a higher wage than candidates who are less experienced will work for less. Keep in mind, you get what you pay for and this saying hits the nail on the head within recruitment.

Have you also considered whether they will be working part time or full time within the business? A good strategy is to take on your first employee on a part time basis and as the business develops and cash flow increases, their hours may be increased to full time.

It is also important to consider that an experienced individual may not have as much passion or drive to work, or simply be difficult to manage if they are quite stuck in their ways.  An individual with less experience may bring the energy and willingness to learn that your business needs, they do whatever it takes to succeed as they want to make a good impression. Can you remember your first job? Did you want to excel to give off a good impression?

When you get to the interview stage, as important as their credentials are make sure you dig deep and learn about their personality as well. With your initial staff members, it’s important to have a good working relationship as you’ll working closely until the business starts hiring more people. Take some time to find out their interests and what they get up to in their spare time as this will help you build a character profile about the individual and assess their level of commitment. Are they a party animal? Does this mean they may call in sick regularly? (Not necessarily)

Also, go with your gut! Once you have gotten the individual to the interview stage and you have started to understand a little more about them, if they give you a strong gut feeling about getting on well with each other, and having they have the skills needed, then listen to it. Keep in mind and remember, don’t fall into the trap of hiring them because you think you will become great friends, you must keep in the place the ‘boss & employee relationship’.

If you feel a candidate is ticking the right boxes but you just don’t get a strong gut feeling about them, then this may not be the best person to hire as not only will you be working with them daily, but it could cause further complications down the line which may lead to tribunal issues.

Take your time with hiring an employee, it’s not always a race even though you may need someone to quickly come on board, it’s better to be safe than sorry.

You also have legal obligations as an employer, below we are going to outline some key legal responsibilities:

Candidate Checks

Are they eligible to work in the United Kingdom? This is absolutely vital when hiring and the government has put together some basic questions for you. The purpose is to outline which types of documents give an individual the right to work in the UK and what a ‘right to work’ check involves.

Candidate checks should also include a DBS check (a criminal record check) to highlight any convictions an individual may have as this is crucial if your business operates in particular areas such as childcare.

Employment Statement

This must be sent to your employee within the first 60 days of employment and it will outline the conditions of their employment with your company. If you are hiring an individual for less than a month, this isn’t necessary (i.e hiring for an event)

Job Description & Employment Contract (view an example)

To ensure both you and the employee understand what is required for the role, its necessary to provide them with a document that sets out the exact criteria of the job and what you will expect from them. This should be part of an employment contract and the agreement section of the contract must be signed before they commence work.

HMRC Registration

You need to register with HMRC as an employer, this must be done within four weeks of hiring on your first staff member and it will be solely your responsibility to pay the employee the agreed salary whilst taking into account the deductions of PAYE (income tax) and national insurance.


The amount you pay your staff member must be the agreed amount either on the advertisement for the role or a figure that was discussed at interview stage. Your payment amount must also comply with the National Minimum Wage law.

Every employee you hire requires a payslip to outline their deductions for National insurance and PAYE and of course their gross and net pay and any other deductions (e.g pension schemes). Subject to the real time information regime implemented in 2013, you are legally bound to submit any payroll data to HMRC.

Another very important aspect of employee payment to consider is holiday pay, maternity pay and your employees may be eligible for SSP (Statutory sick pay) which is £92.05 weekly for up to 28 weeks,

If you want to read more about the governments pay rules click here.

Employee Pensions

Employers within the United Kingdom are legally obliged to enrol staff members that earn more than £9,440 and are over the age of 22 into a workplace pension scheme. Need more information about pensions in the workplace?

Health and safety measures

When you hire staff, you become entirely responsible for deaths and any injuries or illnesses that affect a member of staff as a result of working for you. If you have more than 5 employees, only then will you will need to have a formal health and safety policy in place, however even if you don’t have 5 employees, it’s important to complete risk assessments and safety checks to ensure the workplace is safe.

Business Insurance

Once you start employing, you are legally obliged to have an employers liability insurance policy in place and looking at different insurers to get an employers liability insurance quote will help you decide on which insurer you would like to use. For example, Constructaquote.com offers a variety of insurances specifically for businesses from public liability, employers liability right through to tools insurance.

In the unfortunate event of an illness or injury caused by your workplace, the employee may want to claim against you. Without having a policy in place, means that you would have to pay any legal fees and compensation to your employee. You could also be faced with some heavy fines if you do not have the correct insurance policies in place… If you do not have a valid employers liability insurance policy in place, you could face fines of £2,500 for every day you’ve been trading without it. PS. Make sure you display your employers liability insurance within the workplace or you may be fined up to £1,000.

Written by the team at Constructaquote.


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