Hiring Your First Employee as a Small UK Business

first employee

Expanding your small business in the UK by hiring your first employee is an exciting milestone. However, the process requires careful planning and consideration to find the right fit, create a positive onboarding experience, and set up procedures to remain legally compliant as an employer. Follow these tips when hiring your inaugural team member.

Define the Role

First, detail the specific role and key responsibilities to provide clarity on the employee you need. Outline required skills and qualifications so candidates understand expectations. A tightly defined role profile helps attract qualified applicants a small business can envision succeeding.

Research Salary Benchmarks

 To offer a competitive salary within UK market rates, research average pay ranges for similar roles, experience levels, locations, and industries. While budgets may be tight, underpaying could make attracting talent difficult. Consider exaggerating salary up to 10% above actual planned wages to allow room for negotiation.

Choose Where to Post the Job

Promote the position through multiple free and paid channels to maximize applications like your website, LinkedIn, job boards, university career centers, and social media. Leverage your business and personal networks by sharing the role within them. Cast a wide initial net to attract as many prospective employees as possible. You want to find the best person to help your company grow.

Screen and Interview Candidates

Once applications come in, screen CVs for required qualifications before moving forward with interviews. Develop a structured interview approach covering key role aspects and assess both hard and soft skills. Take time interviewing multiple applicants to find the best culture fit. As there will only be two of you initially, they have to be a suitable personality fit as you don’t want to be coworking with someone you constantly clash with.

Check References

Vet shortlisted candidates by contacting professional references to confirm details provided, dig into work ethic and strengths, and get third-party perspectives. Secure permission first and probe with open-ended reference questions to ascertain what kind of person they are and how they’ve worked in previous roles.

Make the Job Offer

 Once the ideal candidate is selected after careful consideration, make a formal written offer specifying the role, responsibilities, salary, benefits, start date, probation period, and employment conditions. Get signed acceptance before announcing the hire.

Handle New Hire Paperwork

Ensure necessary paperwork like the employment contract, NDA, right to work checks, P45, P60, and workplace policies are signed. Set them up with UK tax documents like a P46, National Insurance number, PAYE registration if needed, and payroll details. Send a welcome kit covering UK guidelines, contacts, and next steps.

Consult Your Accountant

Meet with your accountant prior to hiring to discuss how bringing on an employee will impact your business’ payroll, taxes, insurance, and compliance obligations in the UK. An accountant can ensure you fully understand your requirements and have everything set up properly. Implementing a payroll system or using an outsourced payroll provider are options to explore. 

Onboarding and Training

A structured onboarding process integrating the new employee into your company culture and ramping them up is key. Outline training programs, mandatory compliance courses, introductions, and touchpoints during the initial 90 days. A new employee will usually want to know the roadmap and have structure to their onboarding journey so make sure you’ve covered the first few weeks.

Set Performance Goals

Work collaboratively with your new team member to establish goals, metrics, and performance indicators aligned to their role. Track progress against defined targets through the probation period with regular check-ins and feedback.

Adjusting to having employees requires an entrepreneurial mindset shift when transitioning from working independently. But a strong hiring process, positive onboarding, and supporting your new team member positions your growing business for ongoing success.

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