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Hiring & Taking On Your First Employee?

Posted by on 07 January, 2013

If you are reading this article then no doubt you are looking to take on your first employee. Well firstly congratulations that you have grown your business to this point, and whilst it is an exciting time we know that it can be a stressful time. We therefore write this article for all first time employers or those who are taking on their first employee in some time.

Cost of Hiring An Employee

The most difficult task you will face is undoubtedly finding quality members of staff.  The time and money you put into fishing an employee can vary depending on your budget, but there is no doubt that taking on an employee costs more than the wages alone. Some of the things that you should budget for:

  • Advertising Costs – newspaper & online adverts will cost. You can advertise for free with the local job centre
  • Interview Costs – Interviewing takes time. As will taking going through applications and taking up references.
  • Legal Costs – Giving your employee a contract of employment should be viewed as a necessity.
  • National Insurance – For every £1 you pay your employee you will have to pay 13.80% in employers national insurance. This is on top of the employees contributions. 
  • Insurance – Public and employers liability insurance.  You can also take out optional insurance to cover legal expenses in the event of a dispute with an employee, disputes with HMRC.
  • Holiday Pay – 28 days is the minimum amount of holiday you can give an employee. How will you cope when the employee is on holiday and will you need to pay for cover?

Carrying Out the Recruitment Process Lawfully

For the most part you will be able to employ anyone whatsoever you choose.  This is however subject to anti discrimination laws. Therefore you can pretty much employer whoever you choose so long as you do not discriminate against applicants based on any “protected characteristics” they may have. The protected characteristics are:

  • age;
  • disability;
  • gender reassignment;
  • marriage and civil partnership;
  • pregnancy and maternity;
  • race;
  • religion or belief;
  • sex;
  • sexual orientation.

Additionally if your business is in certain fields of work, such as with children then you will be limited to who you can employ based on their past criminal convictions.  

What To Do When You Have Employed Somebody

So you have advertised, interviewed, rejected the unworthy and chosen your first employee, but what now? Well besides the obvious risk assessment of the workplace before the staff member starts and notifying your insurance company there are further steps you should take. Within 8 weeks of your employee starting you should give them a full statement of the main terms and conditions relating to their employment. We recommend that this takes the form of a full contract of employment.

Moving forward you should look at regularly reviewing the performance of your employee. During the first 2 years of employment you can dismiss by simply giving the contractual notice period (a minimum of 1 week). By regularly reviewing an employee you can see whether or not they are right for your business within 2 years, allowing you to dismiss much easier as the employee will not have gained full employment law rights in relation to unfair dismissal.

Found An Employee That is No Good?

It happens to the best of recruiters, but occasionally an employee is not all they are cracked up to be. It is important to weed out under performing employees as quickly as possible. We therefore advise that you don’t take a risk with new employees. If they are underperforming from the off and/or show little commitment then you should really consider cutting your losses and looking for another employee.

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