You’ve grown your business (huge congratulations!) and now you need some help as you can’t continue to do it all yourself. You’ve reviewed the business finances and you’ve decided it’s now time to hire your first employee. But you’re not really sure where to start and you’re keen to get it right. So, what things do you need to think about and prepare for? 
Setting up 
Employers liability insurance is a legal requirement when you employ your first person. Growth and progress also carries extra risk and it safeguards your business against legal and compensation expenses from employee claims. It’s designed to cover the costs if an employee claims compensation for illness or injury that they believe has been caused by their work. A court can order your business to pay compensation for injury, costs and other damages which may include medical care and lost income. It will also cover your legal costs up to your policy limit. 
You will need to register as an employer with HMRC to get your employer PAYE reference which you need to run your payroll. It can take up to 5 days to get this so don’t leave it to the last minute. 
You will have to set up a payroll system to pay your people. You can either do this yourself through a software package or outsource it to a payroll provider or accountant. You have to provide each employee with a payslip which shows 
their gross and net pay 
income tax and national insurance deductions 
other deductions such as pensions or loans. 
Since the implementation of RTI (Real Time Information), you must also submit payroll data to HMRC each time you pay your staff. 
Find a Pensions provider. Every UK business now has to provide a workplace pension which you, as an employer, has to pay a minimum contribution of 3% (your employee will need to pay in 5%). You will have to automatically enrol them in the scheme unless they choose to opt out. Your employee will need to be aged between 22 and retirement age and earn at least £10,000 per year to meet the criteria for auto enrolment. You can find more information about workplace pensions on the government website or the pensions regulator website. 
Recruiting the right person 
Before starting any recruitment process, you will need to clearly define the job and write a job description. Apart from the tasks you want the new role to do, think about the skills and behaviours you are looking for in the perfect employee. 
To attract the right person to your business, you’ll need to design a job advert, decide where to advertise, review CVs and shortlist, interview applicants and when you find the right person, offer the job. Recruitment agencies can help with all, or part of this process, if you want to outsource it and will usually charge a fee which is equivalent to a percentage of the salary. 
To be able to offer a job you will need to have a couple of things in place. You have to give your prospective employee an employment contract outlining their terms and conditions of employment with you. This has to be provided ideally before they start work with you, but definitely no later than their 1st day. You also have to do pre-employment checks to make sure they have a legal right to work in the UK. Both of these things are required by law and carry hefty fines if you don’t do them. 
Employee experience 
So now they are here and in your business, what now? 
Develop a great induction programme where you can show them the ropes, set expectations of what they need to deliver and introduce them to customers, clients or suppliers. This is what sets people up for success. They are not mind readers and you want to get them up and running as quickly as possible. 
Create a culture and environment where people want to thrive. Your culture is the character and personality of your business. The business mission, values, attitudes, ways of working, behaviours and your leadership style all go to forming your culture. It can have a big impact on engagement, retention, attraction, productivity and efficiency so it’s really important that you develop your culture to deliver the kind of business you want. 
Understand your Health and Safety responsibilities. You now have a duty of care to protect the health, safety and welfare of your employees (even if it’s only one person). This means assessing risks and making sure your employees are protected from anything that may cause harm, injury or health in your workplace. 
Understand basic employment legislation. Once you employ your first person, you become a people manager as well as a business owner so it’s really important to understand the basics. Things like knowing holiday and leave entitlements, what to do if someone is sick or is going on maternity leave. Having policies in place will set expectations and help you manage any people issues but in the absence of these, use ACAS codes of practice. 
If you are feeling daunted with the prospect of taking on your first employee or even your 10th, don’t! Get in touch and we can guide you through any part of the process. 
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