In the first quarter of 2021, 137,000 new businesses were created across the UK, a rise of 14% compared with the previous quarter, according to the Interdepartmental Business Register.
Industries that showed the greatest increase were from the retail, wholesale and logistics sectors.
Does your company fit into these one of your sectors? Is your business booming?
Do you need to start hiring employees to cope with the workload? Should you have people working for you as freelancers, contractors or permanent full-timers?
In this article, we explore how to hire the right employee, and reveal how cloud HR software can help you with the recruitment process.
Here’s what we cover:
Finding and hiring employees
There’s no perfect time to hire your first employee as every business is different and every sector has its own specific needs.
But some of the reasons why you might look to hire someone include:
- Your business is expanding
- You’ve taken on your first client
- You’ve taken on a big project
- You don’t have the right skills to do a particular job.
Whatever the reason, you must judge when it is the best time to do this for you and your business.
Mandy Watson, managing director at Ambitions Personnel, a recruitment expert based in the East Midlands, says: “A good way to analyse if you are at the right time to be hiring is looking at your own weaknesses.
“If there is any knowledge or gaps in your skills, what is going to add the most value to your business? After all, you can’t be in two places at once.
“That being said, you should not compromise on service or quality by spreading yourself too thinly. It might be cheaper short term, but it won’t pay off in the long term.
“For example, you could be a master craftsman, but struggle to keep on top of financial information or perhaps you are an incredibly successful ‘face’ of a business but need some help behind the scenes.”
Watson adds: “Hiring an employee is a big commitment and it’s important to get it right.
“From advertising to the eventual hire, you must be compliant with the law. And it doesn’t stop there. You have an ongoing duty to anyone you recruit on a permanent and employed basis.
“A continual responsibility to develop, nurture and support employees is something many don’t consider when starting out in business.”
Employees vs freelancers vs contractors
Once you’ve decided to take the plunge, the next step is to figure out whether you need someone on a temporary or full-time basis.
If you want to hire someone on a temporary basis, a freelancer or contractor might be the best option. If you want someone long term, a full-time employee might be what you’re looking for.
Julia Kermode, founder of IWORK, an information firm for gig workers, says: “In my experience as a small business owner, I would always recommend that you consider engaging freelancers or contractors as an alternative to permanent staff as it reduces your risk and brings many benefits.
“For example, a good freelancer will be able to hit the ground running without needing huge amounts of induction or training, and they can be engaged on an as needs basis, or ongoing, depending on the requirements of your business.
“By virtue of working for lots of different clients, freelancers often have vast amounts of experience, expertise and knowledge gained from many sectors, and you will benefit from that unique cross-fertilisation.
“Freelancers are used to juggling multiple projects so may be able to step in at short notice, whereas in contrast it can be very time consuming to recruit employees.”
If you choose to hire an employee this comes with a different level of responsibility compared to hiring a freelancer or a contractor for a one-off project or job.
You will find, for example, a freelancer might take care of their own taxes due to their self-employed status, so you will not have to worry about their tax affairs.
Kermode adds: “If you are considering hiring employees, don’t forget that they are entitled to some 80 or more statutory rights and protections, which means additional responsibility and therefore risk for your business.
“This can be one headache too many for some businesses, especially if you’re under pressure, so don’t forget that there are alternatives which you may prefer.”
However, there are benefits to taking on someone as an employee. Having someone who joins you on a permanent basis can be a real asset to your company and they’ll only focus on your business. Freelancers and contractors, meanwhile, will have other clients to keep happy.
In addition, you can nurture an employee to grow with the business. And as you build your team, your business will have a great chance to prosper.
- How to hire employees for the first time
- Setting up payroll: How to get it right first time
- How to get new employees up to speed at your business
- How to support your first employees and help them thrive at your business
- How to tackle people management processes and support employees
How to find potential employees
There are many ways to find employees for your business.
You could perhaps start by using word of mouth and approach friends or family. If that doesn’t work, you can try advertising on social media or online job sites.
You can promote your own business to potential candidates by publicising generous perks and benefits. You can also approach a head-hunter or specialist recruitment agency to find a suitable candidate.
Technology-driven tools can help too.
How HR software can help
Using cloud HR software is a great way to help you recruit and manage new employees for your business. In relation to recruiting new employees, you can use HR software to screen applicants or schedule interviews.
In relation to managing new employees, you can also use cloud HR software for the onboarding process, timesheets, communicating company policies, approving absence requests, approving holiday and sick leave, approving expenses and dealing with performance management.
In addition to providing a salary, pension and annual leave, offering an employee benefits package is a great way to attract people and retain them at your business.
Providing access to a cycle to work scheme, retailer discounts and an online GP are just some of the things that people will really value.
However, introducing new technology into your business for the first time also has its challenges.
Tom Gibson, Head of Technology at non-profit Be the Business, says: “We know technology is a key driver of productivity for small businesses and can make a massive difference during periods of growth and consolidation.
“As part of our mission to help businesses perform better, we created a six-step technology adoption guide, which provides a clear roadmap to successfully introducing digital tools.”
The interview process (in-person and remote)
After sifting through many social media profiles, online job sites and CVs, the interview process follows.
In the past, face-to-face interviews or interviews were commonplace but over the past year, the pandemic has brought about a change to this process.
Potential candidates can now meet their new colleagues remotely using video conferencing software or even over the phone.
Whatever way you choose to interview potential candidates, be prepared to use either format – face-to-face or remote.
Before the interview, take the time to prepare and think about the questions you want to ask your candidates.
There are certain questions you can’t ask, so it’s worth brushing up on your interview dos and don’ts prior to your chats.
Making the job offer
Once you have found the right person for the role, it’s time to make a job offer.
Tell the candidate verbally and then follow up with a confirmation email or letter to confirm the terms and conditions and start date. Be prepared to negotiate on the salary and benefits at this point.
Essentially, you want to ensure both parties are happy with the terms before you can proceed.
And once that stage is complete and your candidate has agreed to work for your business, you can focus on the next step – welcoming your new employee, onboarding them and getting them up to speed on the requirements of the job.
Final thoughts on finding and hiring the right employee
Hiring your first employee can be both nerve-wracking and exciting. But take your time as it is a big emotional and financial decision to make. You don’t want to hire too soon or hire the wrong person/people as this could be a costly mistake.
But get this process right and you’ll be taking steps in the right direction to help your business grow and thrive.
The pandemic has definitely changed how businesses across every sector find and recruit employees.
Technology is a key part of the recruitment process, with the likes of artificial intelligence, cloud HR software and video-conferencing tools available to help you select the right candidates for the job.
So ensure you use the technology that’s available to make the process of finding and hiring employees as smooth as possible.
Editor’s note: This article was first published in August 2021 and has been updated for relevance.
A guide to hiring and supporting your first employees
At Sage, we’ve joined forces with Be the Business to help you hire and inspire your new employees like a boss. Check out this guide for top tips to help you along the way.
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