What do I need to do to hire an employee?

When you have decided to hire an employee follow the 20-point checklist below. Make sure you know what to do before, and after, hiring an employee in the UK

1. Double check hiring an employee is the right solution for your business

There have never been so many options for businesses when it comes to addressing how the needs of the business can be met. It may be worth considering “Do I need to hire an employee?” Would a piece of software or technology be preferable? Have you researched all other options? Would outsourcing the role, or using a consultant be more beneficial? Do you have any internal resources which could be used to greater effect? 

2. Agree internally the specific outcomes you want to achieve by hiring an employee

Whether you are the sole decision maker, or part of a wider management team, ensure you agree the exact role, outcomes and duties you require to be performed by the successful candidate. This can often be overlooked, e.g. we need another receptionist. What specific role, outcomes and duties are required in the role? This will provide an outline of the skills required from a candidate 

3. Review your budget and any existing wage structure before confirming a salary bracket for the role

The starting point is to make sure you are aware of the national minimum wage and the living wage. More details can be located on the government website here. There is a calculator to support your calculations via the government site. The figures depend on the age of the employee and if they are an apprentice. The size, age or type of business is irrelevant. 

Make sure you can afford the wage, package, taxes and other contributions (e.g. workplace pension enrolment), before committing to hiring an employee. Are there any business risks in the foreseeable future which need to be considered? 

4. Create a clear job description

You do not want to waste time, and money, whilst recruiting and you do not want to waste the time of the candidates seeking employment with you. It is therefore crucial you define the title, role, duties and skills needed to perform the role required 

5. How do you intend to advertise the position?

There are many options to consider. What is your company policy for internal promotion? Could you ask any colleagues, friends, or family to recommend someone? You could place a job advert in written press or industry specific publications. There are also many job sites online where you can place an advert such as Indeed or CV Library. You may choose to use a recruitment agency. Ensure you read the terms and conditions very carefully to assess your rights and the fees payable and when! 

6. Who will oversee the recruitment and interviewing process?

Who has the right skills and time to commit to the process of recruitment? Do you have the right resources internally or is it better to outsource to an agency? Completing all the preliminary and post interview processes can be very time consuming not to mention the interviews themselves! 

7. How will you interview candidates? 

It is crucial you keep records of every interview alongside the candidate’s CV and any correspondence between you. This will be needed a) for your selection process, b) for your own internal records, and c) as evidence if you are later challenged as to the method and process of selection 

8. Find out what each candidate really wants

Just because a role is similar does not mean everyone performing the role is the same. Some people require greater certainty in their role. Knowing exactly how to do their job, no surprises, no changes, and a certain structure is crucial to them. Performing the same duties day in and day out is what they seek. Others need variety. They get bored performing the same roles day in and day out. Some people are highly ambitious and want to pursue promotions. Others may be motivated by employee benefit packages, bonuses, flexible working or additional holidays. Getting to know your candidates and understanding their needs is crucial to you being able to get the best out of each other. 

9. Ensure a clear and fair system is in place for selecting the right candidate

The process must be fair and transparent. Knee-jerk decisions, presumptions, prejudice, informal information, are to be avoided. Scoring is an option used by some companies where there is a scoring grading in all the key areas. This may include certain areas where a minimum score is a must for that role – with regard paid to the opportunity to train the candidate and for them to improve in those skill sets. The system for selection should be agreed and in place prior to advertising for the role. 

10. Communicate with the unsuccessful candidates

Communicating with unsuccessful candidates is undoubtedly the right thing to do. Being polite, respectful and professional costs nothing. It is also important for other factors. We live in a social media dominated world and one customer, employee, or person who has connected with your company can praise or criticise you to many with those views available for an infinite time. The candidate may be someone you would want to hire in the future or may wish to re-interview for the role in the future, so maintaining a professional relationship is to be recommended. 

11. Perform checks on the successful candidate

There are mandatory requirements such as, National Insurance number, right to work in the UK, potentially DBS checks if this is relevant to your business e.g. working with vulnerable people or security, etc. You can also request references and request the same. Some companies like to run pre-employment background checks. It is important to confirm this to the candidates. For certain background checks you would need the candidate’s prior written approval. Other companies like to search the publicly available social media channels and research whether there has been any adverse press regarding the person which may affect their right to work, regulatory status or damage the brand of the employer. 

12. Make sure you send out the right employment contract as soon as possible

You must confirm a ‘written statement of employment particulars’ if the employment contract lasts a month or more. This isn’t technically an employment contract but will include key conditions associated with the employment. This written statement must be supplied within 2 months of the start of employment. The statement needs to include, not limited to, areas such as, how long a temporary job may last, notice periods, whether a workplace pension applies (see later notes), grievance guidance, how to complain, any end dates if a fixed term contract. You can access more information on written statements of employment and employment contracts here in our Business Legal Club and via the online legal document library

13. Ensure you have employer’s liability insurance in place

Employers’ Liability (EL) insurance is required as soon as you become an employer. The insurance policy must cover you for at least £5 million and be provided by an authorised insurer. If you are not properly insured fines can be £2,500 every day you are not insured! In addition, you can also be fined £1,000 if the EL certificate of insurance is not available to inspectors when they ask? When you are next looking for El/PL/PI insurance remember to check out our Business Services Club and/or email us at info@mylegalclub.co.uk. We have leading insurance partners who provide fantastic products, great customer service and exceptional value for money. 

14. Ensure you are registered with HMRC as an employer

It is mandatory that you register with HMRC as an employer. Many companies can do so online. You must register before the first payroll run. It can take a few days up, to a week, to receive the employer PAYE reference number. 

15. Check whether employees need to be enrolled into the workplace pension

We would recommend outsourcing the workplace pension, but you can run this yourself. It is a requirement that you register with HMRC and, as at 2019, provide a workplace pension as an employer where you have staff who are aged between 22 and the State Pension age, earn at least £10,000 a year, normally work in the UK (this includes people who are based in the UK but travel abroad for work). When considering your options please remember to check out our Business Services Club for highly recommended partners who specialise in this area and/or email us at info@mylegalclub.co.uk

If staff become eligible because of a change in their age or earnings, you must put them into your pension scheme and write to them within 6 weeks of the day they meet the criteria. 

16. Ensure you understand your HMRC, payroll and tax records obligations

Whether you handle your HMRC obligations in-house, or outsource, you are responsible flor the same. It is vital you review the up to date HMRC guidance regularly. If you wish to outsource your book keeping, accounting, and end of year accounts remember to check out our Business Services Club for highly recommended partners who specialise in these areas and/or email us at info@mylegalclub.co.uk 

17.Ensure you have a clear induction and training programme

Many businesses fall into the trap of thinking that hiring the perfect candidate is the end of the hard work and the employee will now inevitably hit the ground running and everyone lives happily ever after. No two roles are the same. It is well known that Zappos (the US shoe company) provides a four-week induction on full pay that focuses on culture, obsession, strategy and exceptional customer service. After a week or two of the induction they offer the employees the chance to leave with their time paid to date and a $1,000 bonus! We are not recommending you do the same, what we are highlighting is the importance of the induction and training program you provide to successful candidates. A great induction allows the employees to really consider whether this company is the right fit for them and ensure they can hit the ground running when they start work in their teams. A complete induction / training programme will reduce mistakes, increase engagement and improve performance whilst reducing any risk of early conflict. 

18. Keep and maintain a personnel file

It is crucial to ensure safe keeping of a personnel file. GDPR rules and statutory requirement must be followed ensuring recording of key employee information, regular updating and security. 

19. Ensure you have suitable H.R. / employment law systems, processes and reviews

Working in H.R. is often cited as one of the top two most stressful professions. It is crucial you ensure this does not apply to your H.R. team and they are fulfilled and not citing the same about you! Whether you handle H.R., employment law compliance, systems and processes in-house, or outsource, you must ensure everyone knows the processes and policies in place and where to access them. We offer in-house and outsourced solutions for H.R, employment and other legal areas so please remember to access more information here in our Business Legal Club and via the online legal document library 

20. Help the employee grow, improve and perform to their maximum

There are many ways to ensure your employees are engaged, happy and making the most of their potential. Understand their needs. Understand what makes them perform at their maximum and what their fears are. One to ones held by the right people, with the right questions are an easy first step. There are many tools and methods to increase productivity and increase wellbeing, performance and engagement. If you want to hire a specialist team to help your business in these areas remember to check out our Business Services Club for highly recommended partners who specialise in these areas and/or email us at info@mylegalclub.co.uk 

Further Information

For more information on employment law for businesses be certain to review the additional guidance on our site here

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