It may be time to hire your first employee if you’ve reached the point where you need some assistance running your company. Even sole proprietors are able to hire staff if necessary because their business structure has no bearing on their ability to do so!

However, being an employer is more than just hiring someone and paying them. Depending on the type of work and the person you recruit, the hiring process can change, but there are some fundamentals that all employers should know.

What should I think about before employing people?

Every firm will have a different approach to this, but in general, it’s worthwhile to ask yourself the following questions:

Is it within my means to take someone on?

Since hiring someone is a commitment, review the company’s financials to ensure you can support them for the length. The cost of hiring someone involves more than just paying them, therefore additional considerations could be:

• Contributions to the employer’s pension
• Statutory Sick Pay (SSP), potential sick pay, and employee coverage
• Contributions made by employers to national insurance
• Paying parents and providing suitable leave coverage, like maternity or paternity leave
• Pay for holidays

It’s also helpful to consider any additional equipment you could require, such as desk and computer supplies, equipment and tools, and even training expenses.

Is it affordable for me to not hire someone?

If you’re operating at full capacity and risk missing out on fantastic business growth prospects, it might be time to hire someone with more expertise and abilities.

Is outsourcing a better option?

There is always a moment of concern about whether it is the proper choice to hire new employees. Consider outsourcing to a third-party company or independent contractor if you are unable to defend hiring staff.

Is there enough room for you to grow?

More employees mean more room is needed, yet claustrophobic environments can actually lower output and lower morale. This could signal that you need to consider a larger workspace or that you need to hire remote or hybrid workers to share the area.

How can I find a candidate?

It is your duty as an employer to make sure your hiring procedure is equitable and free from discrimination, even though there isn’t a set legal procedure for doing so. It’s crucial that the advertisement steer clear of any potentially discriminatory wording, whether you choose to market the position directly or through a recruitment agency.

Creating a recruitment policy can help ensure that your hiring, screening, and interviewing procedures are followed consistently.

Should I conduct background checks on applicants?

After you have decided who you want to hire, you must confirm that they are legally permitted to work for you.

Verifying the applicant’s eligibility to work in the UK with you as their employer is the first step. Those who neglect to perform the necessary checks and are discovered to be hiring illegal labor face severe penalties:

• The maximum fine for each unauthorized worker is £20,000.
• Employers who intentionally hire people who are not authorized to work in the UK risk up to five years in prison.

Although there are few exceptions, employers often require a sponsor license in order to hire someone from outside the UK.

If someone is seeking for a job, you might also want to check their criminal history by doing a Disclosure and Barring Service (DBS) search. If you are hiring in the childcare or health care industries, this is a must.

Does becoming an employer require insurance?

If you hire employees, you must make sure you have employers’ liability insurance. You must have at least £5 million covered by this.

Having it in place is crucial (and required by law), as it will provide compensation in the event that an employee sustains an injury at work or becomes ill as a result of their job.

Should I notify HMRC if I hire someone?

Within four weeks of paying your first employee, but no later than two months before you begin paying others, you must register as an employer for PAYE. As an employer, you will be in charge of paying your employees their agreed-upon salaries and using PAYE to deduct any income tax and National Insurance contributions.

Every new hire should complete a new starter checklist to guarantee that they are properly set up in your payroll system and taxed at the appropriate rate.

Does my employee require a pension at work?

Additionally, employers must offer a workplace pension plan and immediately enroll all qualified workers. Your payroll provider or accountant can handle this process for you! Another resource is the Pensions Regulator website.

Give a written employment statement.

Anyone who will be employed by you for more than a month must have a formal statement of employment from you. A written contract outlining their duties, rights, and working conditions should also be given to employees. This can consist of multiple documents and needs to contain the following at the very least:

• The name of the company
• The name, job title, and work description of the employee start date
• Pay rate and schedule
• Hours of work
• Holiday entitlement
• The workplace
• Any bonuses or advantages included in the contract

If you are looking for an accountant to help you with your queries related to your business accounts, Call at 020 35765107 or send a message to book a free consultation. Learn more about our online accounting services and pricing.

Note: It must be noted that the information provided in all our blogs are solely for the awareness purposes and are designed with the intention to create an ease for the reader to understand the rules and their importance. However, it should never be considered as an ultimate replication of rules. RezEx Accountants (RezEx Ltd) does not own any responsibility for any unpleasant event that may arise due to misinterpretation of a specific part or whole of the information.