SafeHR: What You Need to Know About Hiring Your First Employee image

SafeHR: What You Need to Know About Hiring Your First Employee

What are the key legal requirements for new employers, and what insights do experienced entrepreneurs offer on effective hiring practices?

onThursday, 16 May 2024

So, you’re ready to hire your first employee, great. This is an important milestone, and some extra hands about the place will take some of the pressure off. Business owners are used to taking on a variety of roles, and now it’s time to take on HR.

HR usually includes a fair amount of admin but there can be plenty of pitfalls, getting it right is a big responsibility. So here’s what you need to know about hiring your first employee.

Here are just some of the things that all employers must do to mitigate legislative risks and avoid facing hefty fines:

  1. Register with HMRC – Firstly, inform the HMRC about your new employer status before the first pay day of making your first hire, more information on that here. It’ll be your responsibility to manage 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.

  2. 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 information here.

  3. Carry out applicant checks – your employees must be legally allowed to work in the UK. If you’re working in a sensitive area like healthcare or childcare, you may need to request a Disclosure and Barring Service (DBS) check. More information on that here.

  4. 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.

  5. Absence and leave – there are a lot 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 became overwhelming and unmanageable. This is another area where intuitive HR software and friendly HR support can save you a lot of time and stress.

  6. 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 useful guidance on this here.

  7. Put it in writing – your new employee will need a written statement of employment from their first day on the job. 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.

Don’t oversell

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.

Start-up experience

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, contact us today to an expert.

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