Small Business Research and Enterprise

by Ope Koshemani, Founder and principal HR consultant at Protean HR

Let’s delve into the practical steps and legal considerations when hiring your first employee.  

Introduction

As your business grows, bringing on your first employee is an exciting milestone. However, it comes with significant responsibilities and legal obligations. This guide will walk you through the essential steps to ensure a smooth transition into your new role as an employer.

1. Financial Readiness

It is important to assess your financial stability before you begin hiring. This includes budgeting for salary, National Insurance contributions, payroll setup, and other costs like equipment and training for your employee(s).

2. Understanding Your Legal Obligations

As an employer in the UK, you must register with HM Revenue and Customs (HMRC), obtain Employers’ Liability Insurance, verify employees’ legal right to work in the UK, and provide a written employment contract. Compliance with employment laws is critical, including offering statutory rights like minimum wage, holiday entitlement, and pension enrolment.

3. Recruitment Process

Once you have taken care of the legal and administrative tasks, the next step is finding the right person for the job. Clearly define the role and the skills required, and consider using various channels to reach potential candidates, such as job boards, social media, or recruitment agencies. Take your time with the recruitment process, as finding the right fit is critical to your business’s success. You must also check that anyone you employ has the legal right to work in the UK. You may have to carry out other checks too such as a Disclosure and Barring Service (DBS) check, if they will be working in a field that requires one such as with vulnerable people or security. 

4. Choosing a Competitive Salary

Determining the right salary is crucial to attracting and retaining top talent. As a statutory requirement you must pay at least the minimum wage. Research industry standards and consider your business’s financial capacity when setting salaries. Remember to factor in additional costs, such as National Insurance, pensions, and other employee benefits, to ensure your offer is competitive but sustainable for your business.

5. Setting Up Payroll

One of the most critical administrative tasks for a new employer is setting up payroll. Payroll ensures that your employees are paid correctly and that their taxes and National Insurance contributions are deducted and reported to HMRC. Many small businesses choose to use payroll software or hire an accountant to manage this process, ensuring compliance with all regulatory requirements.

6. Drafting an Employment Contract

Every employee should have a clear and detailed employment contract. This contract should outline the terms and conditions of employment, including job role, salary, working hours, benefits, and policies on issues such as sick leave and termination. A well-drafted contract not only sets expectations but also protects your business legally.

7. Ensuring Workplace Safety

As an employer, you are responsible for ensuring a safe working environment for your employees. This includes conducting risk assessments, providing necessary training, and adhering to health and safety regulations. Depending on your business, you may also need specific insurance, such as Employers’ Liability Insurance, which is mandatory in most cases.

8. Pre Boarding and Onboarding

Pre boarding is critical for maintaining engagement and reducing anxiety before the employee’s start date. It helps maintain engagement and excitement, reduces new job anxiety, and improves retention by fostering a sense of belonging. Additionally, pre boarding boosts productivity by handling administrative tasks early and setting clear expectations, allowing your new employee to start confidently and integrate quickly into your business.

Prepare their workspace, plan their induction, and ensure your new employee is ready to integrate smoothly into your company. Onboarding is equally important, helping new employees understand their role and align with company culture.

9. Ongoing Responsibilities

Your responsibilities don’t end after hiring. Continue to meet legal obligations like paying at least the National Minimum Wage, providing paid holidays, and maintaining a safe and fair workplace. Regularly review and update your workplace policies to ensure compliance and promote a positive work environment.

Conclusion: Setting Your Business Up for Success

Hiring your first employee is an exciting opportunity for growth, but it is essential to do it right. By understanding your legal responsibilities, setting up necessary systems, and carefully selecting and onboarding the right candidate, you can build a strong foundation for your growing team.

How Protean HR Can Help

At Protean HR, we offer comprehensive support to help you navigate the complexities of hiring. From conducting skills audits to creating tailored recruitment strategies, our services ensure that your hiring decisions align with your business goals and set you up for long-term success. 

• Recruitment Support: We can help you define job roles, create attractive job descriptions, and source qualified candidates.
• Compliance Guidance: We ensure you meet all legal requirements and avoid common pitfalls.
• Onboarding Support: We can help design effective onboarding processes to integrate your new employees seamlessly.
• Ongoing HR Support: As your business grows, we provide continued guidance on HR best practices and compliance.

Let Protean HR guide you through this exciting phase of your business growth, ensuring your hiring decisions align with your goals and set you up for long-term success.

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