If you have been running your business on your own for a while, there may come a time where you arrive at the point where you need to hire an employee. But hiring your first employee can often be a confusing process and you may be unsure how to get started. Here’s a guide to the main factors you need to consider.
Do You Really Need an Employee?
First of all, work out whether you actually need to hire an employee in the first place. Consider alternatives like hiring a contractor instead, which may end up being cheaper and less of a hassle. There is a lot of responsibility when you hire an employee, so you want to make sure you are making the right decision.
Register as an Employer
If you decide that you definitely want to hire an employee, you will need to register as an employer, which you can do by registering with HMRC. You will need to do this at least four weeks before paying your employee, and you can do this online at the Gov.uk website.
Set Up PAYE
PAYE stands for Pay As You Earn, and you will need to set this up before you can pay your employee. This allows you to handle all of the tax and National Insurance contributions that your employee will have to pay. You could also outsource your PAYE to make things easier.
Start the Search
Once you have the above in place, you need to then find the right employee. This can be a quick or lengthy process, but make sure you go about it properly so you find the most suitable employee for your business.
You could start by asking around, placing an ad in the local paper or online, or even using a recruiter to help you.
Make sure you think very carefully about their role and responsibilities, and include these in the advert to reduce applications from people who are not suitable for the job. You should also decide how much you are willing to pay your employee.
There are various other considerations to keep in mind when you are hiring your first employee. You may need to check whether they have the legal right to work in the country, and depending on their role, you may need to apply for a DBS check. This is also the time to get employment insurance, and you should also find out whether you need to enrol them in a pension scheme.
Make an Offer
Once you have chosen an applicant, you need to make them an offer and provide them with a contract. You may want to get legal help for this. The offer should include the title, specific features of the job and the salary, as well as details regarding hours, holiday entitlement, sick pay and more. Make sure these are sent in writing.
Get It Right when Hiring Your First Employee
While hiring your first employee may cause some confusion, once you have done it once, you will have a much better idea about how to go about it the next time you need to hire someone. So follow these steps and find the right employee to help your business grow.
For more advice in the small business world, check out the Accountants East London blog.