The nine things you MUST do when employing people in a small business

Are you ready to hire someone for your small business? Discover the nine things you MUST do to be legal and attract and retain the right person.

So, your product or service is looking good. You’ve got all your finances sorted, and you’ve worked out your marketing plan. Now all you need is some people to help you make a success of your brilliant business.

But how do you find the right people and what do you need to do to maintain a happy and productive workforce, while also ensuring that you are a responsible and legally compliant employer in a regulated world?

Nine things you MUST do when employing people

Recruiting and training a new employee can be expensive (according to Oxford Economics it can cost over £30.5k per employee). So it’s important to get it right!

To help you, here are nine things you must to when employing people in a small business from Maria Jefcoate from Velo HR.

1) Recruit the right person

Make sure you create accurate job descriptions and person specifications for every role. These are useful information for applicants, but should also be used to objectively measure the suitability of applicants during the recruitment process.

Then carry out a thorough selection process using interviews, tests, trial shifts, assessment centres, etc. This will give you a chance to meet the candidates and assess their suitability for the role, the team, the business.

When writing recruitment adverts, base them on a job description that accurately reflects the business and the vacancy to ensure you attract the right candidates, and ensure you don’t mislead candidates as to what the role is.

Also, importantly, be aware of phrases in your adverts and job descriptions that may be seen as discriminatory.

And finally, sell your business and your ideas to your candidates – if you’re not enthused about what you are doing, the best candidates won’t be either. If you want your business to grow, identify individuals who can grow with you. This will help save on recruitment costs as the business develops.

2) Check their employee status

Identify whether you are employing ‘employees’, ‘workers’ or ‘contractors/self-employed’ as they all have different employment rights.

This is quite a contentious issue at the moment, particularly following recent employment tribunal cases about whether or not workers are self-employed (such as Pimlico Plumbers ltd v Smith, and Uber v Farrer and Aslam).

3) Issue an employment contract

Issue an up to date, written employment contract. This will ensure that employees know their rights and responsibilities. If there is no written contract some of the terms and conditions may become established over time and this could lead to misunderstandings as to what is in the contract.

4) Have a clear pay and reward system

Have a clear, consistent and attractive system for paying and rewarding employees. And establish objective bonus and incentive schemes, if you are using them.

Identify any benefits provided too, such as company car, health care, gym membership and flexible working (this can include working from home or flexible hours).

You also need to understand your legal requirements for setting up a workplace pensions scheme. (All qualifying employees should be automatically enrolled onto a pension scheme by 2018.)

5) Create an employee handbook

Create an up-to-date employee handbook that sets out the expectations of the employer and employee. This is a useful way of communicating the organisation’s employment rules and procedures, and can be tailored according to the culture of the organisation.

Some of the information your handbook should cover includes:

  • Induction process.
  • Equality and diversity policy.
  • Pay and benefits.
  • Hours of work.
  • Annual leave.
  • Absence policy.
  • Working parents policies.
  • Communications policy.
  • Training and development.
  • Disciplinary and grievance procedures.
  • Health and safety procedures.

6) Communicate your performance standards

You need to clearly communicate the performance standards required, so your employees know what is expected of them.

Ensure line managers meet with employees regularly to discuss and address any issues as they arise to prevent them escalating unnecessarily, and keep documents of any discussions. You also need to have a clear disciplinary and grievance process, as set out in your employee handbook.

7) Provide training

Provide a thorough induction programme for new starters. This is essential for the retention of new staff as they will feel welcomed into the organisation and feel a part of the team.

Establish what training can be done in-house and what needs to be done externally, and identify what budget is available for training.

Developing your staff is essential for improving engagement. If employees feel that you are investing in them, they will be more likely to invest their effort into your business.

8) Communicate

Keep employees informed about what’s happening within the organisation via internal communication systems, such as social media, intranet, noticeboards and email.

Give employees the chance to feedback their views on the organisation, too. This will support the Psychological Contract (the unwritten agreement between an employer and employee that the employer will, for example, provide fair wages and treatment, and the employee will in turn work hard and follow the rules) and encourage employee engagement, as employees will feel listened to and valued.

Communication can help to reassure employees during times of change, too – something that may become important with Brexit potentially on the horizon.

9) Keep personnel records

All employees should have a paper or electronic record of their personal and employment details. This is essential for managing your employees and workforce planning.

Need further HR advice? Visit Velo HR, the CIPD (Chartered Institute of Personnel and Development) or ACAS (Advisory, Conciliation and Arbitration Service).