Hiring your first employee

When starting your own business, there are lots of tasks to do and we’re always in awe of anyone who has the passion and drive to take it on. In the early days, you’re a team of one - responsible for everything - and wearing so many different hats can be pretty tough.

So if you’ve reached a point now where you think you’re ready to hire your first employee, firstly let us say congratulations! You’re obviously smashing life as an entrepreneur, and for that, you deserve a pat on the back.

But making that first hire isn’t as simple as it seems, it’s a big commitment and one you need to be sure you’re ready for. Here at takepayments, our goal is to make your life easier, so here we’ll look at what’s involved in hiring your first employee and take you through the steps to making sure it’s a smooth process.

Are you ready?

First things first you need to be sure your business is ready for the responsibility of a new member of staff, after all, deciding to hire someone means you’ll be committing to paying their wages for the foreseeable future.

Do it too soon and you could run into cash flow difficulties, so being absolutely sure the funds are available should be the first thing you do. Once that’s sorted, other signs that might indicate you’re ready to have an extra pair of hands include:

• You need help driving sales
• You’ve had to turn down work because of limited capacity
• You need help with specific skilled tasks - such as accounting
• You never have enough hours in the day to complete all tasks
• You’ve spotted a new opportunity but can’t take it on because of time constraints

Sound all too familiar? Then it’s probably time to hire your first employee, so let’s look at how to do just that in nine steps.

1. Define the role

What are you hiring this person for? It’s crucial you and they both know exactly what it is they’re expected to be doing.

Write down a list of tasks you’d expect them to carry out week in, week out and then work out how long these would take on average. A good rule of thumb is if they amount to more than 20 hours, you’re ready to bring someone on board.

Top tip: while it’s important to have a clear set of expectations, it’s also a good idea to leave a little wiggle room in your job description so your new hire can be flexible and their role can grow with your business.

2. Get specific

Clearly document the procedure for each task your new hire will carry out and include this information in your job description.

It’ll help you accurately assess candidates’ credibility when they apply, and also serve as a useful document once your new hire starts - you can refer back to it regularly to ensure they’re performing as expected.

3. Work out wage

The whole point of bringing on an employee is that they bring money into your business or free up enough of your time that you can concentrate on boosting profits, so you can afford to pay their wages. Spend some time considering what your day-to-day will look like once they’re on the books, and be sure the numbers tot up.

Working out what you’ll pay should be a fairly straightforward matter of researching what similar roles at other companies pay and being sure what you offer is in line with the market. 

When working this out remember you must comply with the National Minimum Wage legislation - find out more here.

4. Advertise the role

Next up you need to spread the word that you’re looking to hire, and there are loads of options for how you can go about doing this.

Traditionally businesses advertised jobs in the local paper, but nowadays the job market is increasingly moving online, so make sure the best candidates possible see your advert by putting it on social pages and the likes of LinkedIn, Indeed, and Reed.

There’s a handful of really important info you need to include in your advert (besides the job description) including:

• Any necessary qualifications
• Closing date for applications
• How they should apply
• When you need them to start
• Hours (full time, part-time, etc.)
• Any perks you’ll be offering

5. Shortlist

Once the applications start rolling in it’s time for you to sort through the candidates and decide which ones to bring in for an interview and which ones to rule out of consideration.

Look for things like qualifications, especially those which are listed in your advert, as well as experience, references, and personal statements. 

Remember not to base your decisions on instinct alone, and don’t be fooled into believing everything you read - it’s suggested as many as 40% of job applications contain some form of fake information - so have your guard up and check information where possible.

Remember: some information will be available in public records whereas others are strictly personal, so consider asking your applicants for proof of things like educational qualifications if it’s an important hiring factor.

6. Interview

Besides running background checks or asking for proof, a great way to assess whether a candidate is suitable for the job is in the interview using skills and aptitude tests. The most straightforward way of doing this is by asking them to carry out some of the tasks that will be expected of them if they get the job, e.g.:

• Communicating with customers
• Making sales
• Writing emails
• Creating spreadsheets
• Stacking shelves, etc.

Remember: you don’t necessarily have to throw your candidate in at the deep end and actually put them on a call with a real customer, but a simple role-play could show you what they’re capable of.

7. Make a hiring decision

It’s time to cut the wheat from the chaff and decide which candidate you want to hire based on the process so far.

At this point, you’ll need to have a contract in place so that both you and they are crystal clear on the legal standing of the employment. Hopefully, you’ll never need to refer to the contract, but even just the act of receiving the contract will help your new hire feel part of your business.

8. Be a boss

You’ve done the hard work, so now it’s time to decide what kind of boss you want to be - do you want to become your employee’s best friend or is all that matters that they do what you say when you say it?

We all know who we’d rather work for, but at the end of the day your business is your baby, so you need to run it the way you see fit and there’s a big difference between the two leadership styles.

It wouldn’t be fair to your new hire to be Little Miss Sunshine one day and Mr Angry the next, they wouldn’t know if they were coming or going, so put some thought into how you’ll attack your new role as boss and stick with it.

9. Enjoy 

Once the hiring process is over, contracts are signed, and you’ve got your boss hat on, it’s time to enjoy the benefits of having a new team member on board. 

Remember it’s a learning journey for both of you, so be patient and support your new hire in learning the ropes - no one will be perfect at everything right off the bat and it’s your job to turn them into the employee of your dreams.

Important things to remember

Before you sail off into the sunset hand in hand with your new staff member, there are some super important things to remember when making your first hire:

• Right to work - make sure your new hire has the right to work in the UK before signing on the dotted line, you can do this here. 
• Statement of employment - you’re legally obliged to provide a statement of employment to anyone working for you within two months of them starting - this is different from an employment contract - find out more here.
• Get insured - take out adequate employers liability insurance to protect yourself from any claims made by employees in the workplace.
• Register - you need to register yourself and an employer with HMRC within four weeks of hiring your first employee. Find out more and get registered here.
• Payslips - you must provide your new hire with a payslip detailing their income tax, NICs deducted, gross and net pay, and any other deductions. As of 2013, you’re also required to submit payroll data to HMRC each time you pay your employee. 
• Health and safety - you’re obligated to provide your employee with a safe and secure work environment - but you don’t need a formal written policy until you have five or more employees. Find out more here.
• Pensions - you must enrol your employee(s) into a workplace pension scheme - find out all the information you’ll need here.

• Maternity/sick/holiday pay - it’s a smart idea to brush up on the latest rules and regulations around employees’ rights to taking time off work for various reasons - you can familiarise yourself here.

For tonnes more useful resources for small businesses head to our jam-packed blog or get in touch with our friendly experts to discuss your options when it comes to taking payments. 

Bryony Pearce

Copywriter