6. Employing your First Person

Taking on your first employee is a big step. It is a really positive step as it means your business is growing, but it can also be a bit scary.

Here are our top tips for taking on your first employee(s). Following these steps will help ensure that you meet your legal requirements. They will also provide you with additional protection and flexibility while giving clarity to your new member of staff. 

What do you want them to do?

It may sound obvious, but you need to know what you want your new employee to do. This will normally mean outlining the general duties and areas of responsibility in a job description.

The more information and guidance you can give, the easier it will be to recruit, and it will be easier for your new employee to get on with the job. Be as clear as possible about what you want someone to do (and the standards you expect).  You will still need to provide them with training and guidance, but never underestimate the value of a good job description.

You can also put together a person specification. This describes the personal attributes you are looking for in your new employee. It may include qualifications, skills and experience. It may also include attributes such as problem-solving, a positive attitude, using initiative and organisational skills. 

Use the job description templates to help you put together this important document.

Contracts of Employment

There is a legal requirement to issue employees with a written statement of their terms of employment. This must be done on or before the first day of employment.

The written statement will include mandatory terms set out in legislation. However, you can go further than this (and we would recommend you do) and issue a written contract of employment (that will include the terms required by the written statement).

A good contract of employment will provide you with protection and flexibility, as well as ensure you meet your legal obligations to provide written terms.

Contracts that are poorly drafted, or provide terms more appropriate for a large corporate, will potentially cost you money and restrict what you can do and the options you have in any situation.

A good employment contract will provide you with protection and flexibility, and save you money.

Use the template contracts of employment (or written terms) and read the guidance and case study to see how an employment contract can truly help protect your business.

Policies and Procedures (and Employee Handbooks)

There are some legal requirements relating to HR policies and procedures. You are legally required to have a written Disciplinary and Grievance Procedures. We would also recommend you have an Equal Opportunities Policy. These are the absolute minimum requirements.

You may choose to go further and have additional policies and procedures or a full employee handbook.

An employee handbook is an invaluable tool and a great way to communicate information to your employee(s).  As well as including your HR policy documents, an employee handbook can also cover your standards and codes of conduct (e.g. dress code, use of mobile phones, facilities, relationships at work etc).

It is a great document to give to new employees, so they understand your standards and how to act.  It will also allow you to deal with any issues or poor standards effectively and amicably. But you must keep it up to date.

Use the policy templates to put in place your HR policies and procedures. You can use the handbook framework template to build your own handbook.

Employee Files and Data

You should set up an employee file for every employee and keep a copy of any employment documentation or correspondence in the file. This might include a copy of their CV and application form, a copy of their signed contract of employment, references received and documentation relating to eligibility to work in the UK.

As employment progresses, you should also keep records of any sickness or other absence, notes of any discussions and documentation regarding any changes in terms. Files should be kept confidential and under lock and key (see GDPR). Alternatively, they can be kept electronically – but should still be kept securely and confidentially to ensure you meet your obligations under data protection and GDPR.

See the section on Employee Files to see how to structure a personnel file and what information to keep.

For an online solution, you can use YourHR.space that provides an online HR Portal that allows you to keep all employee files electronically.

Payroll and Pensions

If you employ someone, you must set up a PAYE (Pay As You Earn) scheme and a workplace (auto-enrolment) pension.   

You will need to run a payroll, make payments to pensions (if an employee is eligible) and provide itemised payslips to employees.

For more information, visit the pages within the Employment Facts area including pages on Payroll, Pensions and Itemised Payslips

You can run your payroll in-house, or you may choose to outsource this. 

Minimum Wage

You must pay your employee at least the National Minimum Wage. The rates will depend on an employee's age, the rates change (and increases) every year, so you also need to make sure you keep up to date with this.

Details about the current minimum wage and how to calculate minimum wage can be found within the Employment Facts area.

Right to Work in the UK

You must check that all your employees have the legal right to work in the UK. To meet your legal requirements, you need to hold a copy of acceptable documents within the employee’s file. This will commonly be a copy of their passport, but you can see a full list of acceptable documents by visiting the page on Right to Work in the UK.

Induction Training

A good induction will help people settle in and become productive more quickly.

It can be beneficial and is good practice to have an induction programme. An induction will provide new employees with essential information about their job and how you do things. It is also an opportunity to make them feel welcome and comfortable.

You can have a checklist that you can go through to make sure you have covered key points with new starters. This may include collecting information for payroll or other information you will require from your new employee. You can then keep a copy of the completed checklist on their personnel file.

A good induction will help people settle in and be productive more quickly. It also ensures you have a record of areas you have covered, and information collected. 

See the Training and Development section for further details.

During Employment

Many situations can arise during employment. These include anything from changes in terms of employment, absence, performance or conduct issues, employee grievances and all the family friendly rights. All of these are covered on YourHR.guide in the various sections.