Hiring your first employee: A practical guide for small business owners

Hiring your first employee is a monumental milestone for any small business. It signals growth, a demand for more hands on deck and a step towards scaling your operations.

But let's be honest – it's also daunting. With legal responsibilities, payroll and finding the right person, where do you even begin?

That's where our Talent Hub guide, Hiring your first employee, comes in.

Created with our partners Indeed, Employment Hero and Unibeez, this comprehensive guide breaks down the recruitment process into manageable steps, helping you navigate everything from defining the role to onboarding your new hire.

Here's an overview of the key insights and steps outlined in the guide.

Assessing your business's needs

Before diving into the recruitment process, pause and ask yourself: Why am I hiring? Whether it's to manage increasing demand, fill a skills gap or delegate time-consuming tasks, understanding your specific needs will help you hire strategically.

Tips

• Define the role: Outline the skills, tasks and responsibilities the role will require. Start with part-time or temporary contracts if you're uncertain about workload.

• Budget smartly: Factor in salary benchmarks, National Insurance contributions, pension costs and other expenses like training and equipment.

• Take advantage of technology: Use tools like salary benchmarking platforms or a simple task grid to identify where you need the most help.

Crafting a clear job description

A job description is your shop window to potential candidates. Done right, it will attract the right applicants and save you from sifting through irrelevant CVs.

Tips

• Be specific: Clearly state the job title, responsibilities and skills needed. For example, if you're hiring for an admin role, highlight proficiency in tools like Excel or project management software.

• Sell the role: Highlight perks like flexible working, career development opportunities or a chance to contribute to a growing business.

• Showcase your culture: Today's candidates value a good cultural fit as much as salary. Briefly share your company's values and work environment.

Knowing your legal obligations

Employing staff in the UK comes with certain legal requirements. While it may seem intimidating, understanding these will save you time, money and potential legal trouble.

Tips

• Employment contracts: Provide a written statement of terms within two months of employment. Include job title, pay, working hours and notice periods.

• Right to work checks: It's your responsibility to make sure your new hire has the legal right to work in the UK. This involves verifying documents like passports or biometric residence permits.

• National Minimum Wage: Pay employees at least the National Minimum or Living Wage, depending on their age.

Conducting effective interviews

The interview process is your chance to find not just the most qualified candidate, but the one who best matches your business goals and values.

Tips

• Prepare thoughtful questions: Use behavioural and scenario-based questions to gauge how candidates have handled challenges or would approach tasks in your business.

• Avoid discrimination: Focus only on the candidate's ability to perform the job. Avoid questions about age, marital status or health to stay in line with the Equality Act 2010.

• Test skills: For roles that need specific expertise, consider a practical test. For example, an Excel exercise for admin roles or a writing test for marketing roles.

Getting the paperwork right

Once you've found your ideal candidate, it's time to formalise things with an employment contract.

Tips

• What to include: Cover salary, working hours, holiday entitlement, probation periods and notice periods. Transparency upfront reduces misunderstandings later.

• Meet the two-month deadline: Under the Employment Rights Act 1996, you must issue a written employment contract within two months of their start date.

Registering as an employer and setting up payroll

Before your new hire's first payday, you'll need to register as an employer with HMRC. This makes sure you're keeping to the rules of the UK's Pay As You Earn (PAYE) system.

Register with HMRC at least four weeks before your employee's start date to avoid delays.

Tips

• Choose payroll software: Tools like Sage, Xero or HMRC's Basic PAYE Tools can simplify calculations and ensure you're making the correct deductions.

• Understand deductions: Be prepared to manage income tax, National Insurance contributions, student loan repayments and workplace pension contributions.

Onboarding your new employee

A structured onboarding process sets the tone for your employee's success and ensures you're following UK employment law to the letter.

Tips

• Prepare their first day: Set up their workspace, introduce them to the team and provide an induction into your company culture and goals.

• Training and development: Offer job-specific training to get them up to speed and clarify short- and long-term expectations.

• Monitor progress: Use the probation period (typically three to six months) to assess their fit and performance, and provide regular feedback.

Expert tools to help you succeed

Enterprise Nation's Talent Hub partners Indeed, Employment Hero and Unibeez, offer tools and platforms designed to make recruitment smoother for small businesses:

• Indeed: Post jobs and streamline the application process with screening tools.

• Employment Hero: Manage payroll, HR and onboarding from one central platform.

• Unibeez: Connect with talented students and graduates for fresh ideas and project-based roles.

Why download the guide?

We've covered the highlights here, but the full Talent Hub guide dives into the nitty-gritty of recruitment, contracts, payroll and more.

It's packed with resources, checklists and expert advice tailored to small business owners like you. Whether you're overwhelmed by legal jargon or just need practical steps to get started, this guide will be your ultimate recruitment companion.

Ready to grow your business? Download the full guide now

Expert insights, practical steps and essential resources to make your first hire a success. Don't let the process overwhelm you – get the support you need to grow with confidence! Get the free guide