Top Five things for start-ups to think about before hiring the first employee

Guest post from Emma del Torto, Effective HRM

Why are start-ups special? When you are first starting out in business there are lots of things that can make your head spin. Take a breath and think carefully before you take the leap.

As your business grows you will need to be able to rely on other people, even if you started out from your kitchen table. So don’t let hiring the right people be something that daunts you or stops you in your tracks. Make the necessary preparations for building your empire.

Here are my Top Five Tips when it comes to getting the right people on board.

 

 

 

 

 

1. Have a plan and plot your route – you are going on a journey with your business. If you don’t have some kind of route map and plan, then you won’t get to the destination. You might not even know where you are going. So, have a really good think about what it is you are looking for with your people resourcing. Are you the technician* in your business – the one with the technical knowledge and skills? If so, you might need administrative or back office support or help with sales and marketing. (*if you have not read it, do read the classic business book the E-Myth – it is short and full of great wisdom) – identifying what resource you need to grow will help you with recruitment or other resourcing.

2. Check yourself – have a good look at yourself and ask yourself if you are ready to make the leap to being an employer.

 

 

 

 

 

It is a big difference running a lifestyle business or being a freelancer to then having to hire and manage employees. Fortunately, there are lots of ways to grow a business and not all of them include having employees straight away. Are you ready for what is essentially quite a significant commitment from you? Perhaps start off by sub-contracting to someone who is self-employed. Use the services of a Virtual Assistant, an outsourced bookkeeper or marketer, or look into order fulfilment if you are an e-commerce business.

3. Stay calm and do the maths

 

 

 

 

 

Being able to afford to bring on staff is a really important consideration. You might want to consider doing some cash flow forecasting for this additional overhead. Lots of people get a bit daunted with finances (it would be good if you could learn to love finances but don’t panic if that is not your bag). Cash flow forecasting might be something that your accountant could help you with if that sounds a bit too technical.

Also, it is not just wages that need to be taken into consideration either. Every organisation (regardless of size) will also have to provide pension contributions for their employees. We are advocates of outsourcing the payroll function (again your accountant could assist you or you could get some quotes from a payroll bureau). Outsourcing this function is cost effective and means that they could deal with the pension administration on your behalf also.

You’ll want to consider: wages, PAYE (pay as you earn income tax) and NIC (national insurance contributions), pension contributions, benefits (private health care, company car etc), expenses and mileage, holiday pay, sick pay…… What tools of the trade will you need to provide? Computer, phone, tablet, uniform, protective clothing and other equipment? Don’t get caught by any surprises. Have we put you off yet? No….then go to number 4.

4. Great Expectations

 

 

 

 

 

 

 

Now I love a literary reference, and a Dickensian classic at that, but trust me the last thing you will want is a drama when it comes to hiring an employee.

In fact the whole mission is to avoid any kind of drama and the best way we have found is to make sure that everyone is really clear about what is expected from them right from the beginning.

  1. Write a really clear job description – it does not need to be more than a page of A4 (we have some great templates to help you with this)
  2. Contracts of employment that clearly set out start date, amount of pay, frequency of pay, place of work, job title and other relevant terms that will help manage your employee’s expectations. If you set them out expressly, there is no room for imagination to fill in the gaps.
  3. A sensible and compliant Staff Handbook will set out the procedures for employees to follow and will help you build your team and your business with some consistent processes.

5. Ready to roll? Just get out there and start to Build Your Empire. In other words, if you have a plan and you have reflected on your mission and your plan……then put your building blocks in place – well, the next step to take is to just go out and do it. What’s stopping you? (if you are stopping yourself, go back to step 2 and take a look at what might be getting in your way). Good luck!

Effective HRM has launched a brand new service especially for small businesses and start-ups –  PitStopHR