Taking on new employees is an exciting but often daunting experience for a fast-growing small business.
According to research published in 2021 by Hitachi Capital Invoice Finance, nearly a fifth (19%) of small and medium-sized enterprises (SMEs) in the UK are planning to recruit more staff for new roles following the UK’s successful vaccine roll out.
Recruiting your first employees is a sure sign that your business is growing, and it offers opportunities to power further growth.
But if you’re used to running your business yourself or with a partner, then having people to manage could be a source of concern.
Add to that the legal aspects of employing staff and it’s clear that taking good advice and ensuring that you’re ticking all the legal and financial boxes is essential.
This article covers the following:
The legal aspect of recruiting new employees
“When the employee starts work with you, you need to ask for sight of their passport or right to work in the UK,” says Jane Johnson, a solicitor and director of LJL Legal.
“If you employ someone who does not have this right, you can face a large fine and risk a criminal offence.”
Assuming there are no problems with this, you’ll need to provide an employment contract to your employee as well as any relevant policies.
“The contract is the most important document between the parties and sets out important information such as workplace, hours, pay, holiday, sick leave, confidentiality, and whether there are any restrictions upon leaving, such as not working for a competitor for a period of time,” says Johnson.
You should be aware of an employee’s statutory rights, explains Katie Fletcher, senior HR projects adviser at employment lawyers Howarths.
This includes paid holiday, sick leave and maternity/paternity pay, as well as providing staff with a written statement covering the terms of their employment.
All employees and workers have a statutory right to receive a statement of employment particulars from day one of their employment, and the statement must contain specific information outlined within the Employment Rights Act 1996.
If you don’t provide a statement, or if a statement is provided which doesn’t contain the required information, this could lead to the employee making a reference to an employment tribunal to determine their terms of employment.
Have a plan for your induction process
Before your new employee starts, make sure you’ve got a plan in place that includes the meetings they’ll be expected to attend and the training that you want them to undergo.
Set aside time to go through with them how your processes work, from the likes of fulfilling orders, to working with suppliers and requesting holiday.
Explain why you do things as well as how you do them. Be very clear on their role and how it fits with others in the company, while emphasising its importance.
Set aside plenty of time in your diary so that you’re on hand to answer their questions.
The more face-to-face meetings and interaction you can arrange the better.
But in these uncertain times, it’s a good idea to agree with them any hybrid working arrangements. When are they going to be in the office?
If they’re working from home, make sure that you’re ready to check in with them with videoconferencing tools such as Microsoft Teams or Zoom, or by phone.
- How to find and hire the right employee for your business
- How to hire employees for the first time
- Setting up payroll: How to get it right first time
- How to support your first employees and help them thrive at your business
- How to tackle people management processes and support employees
Setting objectives for new employees
If you’re used to doing things yourself or working closely with a business partner, it can take a change of mindset to start thinking about what you want to delegate to your new team member.
“Setting goals with employees is important because your staff want to see how their contribution is aligned with greater corporate objectives,” says Liz Sebag‑Montefiore, executive coach and director and co‑founder of HR consultancy 10Eighty.
“Setting expectations is part of the process of providing data for career conversations and feedback.”
Pitching these goals correctly is essential, she explains.
Sebag‑Montefiore adds: “You’ll cause resentment if you set objectives that are too challenging but, by the same token, if you don’t pitch expectations high enough, you won’t motivate employees nor encourage better performance.
“Encourage employees to self-report on how they think they are doing and what they have learned, or what needs to change.”
Using software to set up HR and payroll processes
There’s a growing number of online technologies that will allow you to manage and organise your workforce remotely, including essential tools such as communications, reporting, asset management and organisational charts.
Using cloud HR software and cloud payroll software to manage your people processes means you can expand your usage quickly, easily and cost effectively rather than having to buy an entire new system or go through a costly, cumbersome upgrade process.
This is a much more effective way to deal with your HR and payroll tasks than using spreadsheets and Word documents, which will slow you down.
And by using modern HR and payroll software, you’ll be able to submit data to HMRC quickly and accurately so you can manage your PAYE and National Insurance contributions.
You also need to consider a solution that will allow you to send your staff’s pension contribution details to your auto-enrolment pension provider.
Your employee’s salary, bonus (if they have one) and expenses payments should be integrated into your cloud accounting software so payments are made quickly and accurately, and are easily integrated into your monthly accounts.
You’ll need to ensure that the payslips and P60s that you create for your new employees are easy to access (if your cloud software has a portal, this means your people can access them online) – especially in this new world of hybrid working – but, at the same time, they also need to be secure.
Self-service tools for your employees
The more you can empower your employees to handle their HR and payroll tasks (such as updating bank details and requesting annual leave) via an online portal, the more time you’ll have to focus on value-add tasks, such as supporting your team, building good working relationships and growing the business.
With a self-service portal, you can give your employees instant and remote access to everything from their payslips to information about company policies and newsletters. Your employees can also check their holiday entitlement without the need to send you an email requesting the information.
As you recruit more employees, you’ll find that expenses claims become more numerous. Keeping an eye on them can be complicated and time consuming.
However, you can use your self-service portal to allow your people to submit their expenses simply by inputting the amount in question and photographing their receipts, often directly from the mobile app, so that they can submit them quickly and easily.
With many systems you can turn receipts into expense entries automatically, then group these entries together and submit an online expense report, giving you better coordination and transparency.
Final thoughts on getting new employees up to speed
Taking on new employees should be done in the right way.
Like any business decision, getting it right depends on preparation – identifying every stage of the process and ensuring you’re taking the right actions.
It also requires investment – not just in salaries, bonuses if you’re offering them, and expenses that your people might incur when they’re out and about on your behalf, but technology too.
Adopt HR and payroll software so you can handle your new people responsibilities with ease.
And make an investment of your own time, too, to bring your new employees on board effectively.
The good news is the technology is increasingly affordable and scalable – and devoting time with your latest recruits can be enjoyable in itself, as they introduce new ideas, perspectives and experience.
The key is to maintain these close relationships as you take on more staff.
“Relationships, values and communication become even more important and are trickier to achieve as the business grows,” says Simon Paine, CEO and co-founder of Rebel Business School, which helps people from all walks of life to start their own businesses.
“What got you to where you are will hold you back from getting to where you want to be.
!You need more processes, and you need to work harder at building great relationships alongside doing the do.”
Be the Business, an independent not-for-profit focused on improving business performance, has created a series of resources and actions plans to help business leaders to most effectively inspire, communicate and manage their employees.
Anthony Impey, CEO of Be the Business says: “Getting the best out of your people means you’ll be able to get the best out of your business.”
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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