10 Essentials for Employing People in a Small Business

So, your product or service is looking good, you’ve got all your finances sorted, and you’ve worked out your marketing plan, now all you need is some people to help you make a success of your brilliant business. But how do you find the right people and what do you need to do to maintain a happy and productive workforce, whilst also ensuring that you are a responsible and legally compliant employer in a regulated world? Recruiting and training a new employee can be expensive, over £30.5k per employee according to Oxford Economics. The following is advice you should follow when becoming an employer to help you get it right:

1. Recruitment
• Create accurate job descriptions and person specifications for every role. These are useful information for applicants but should also be used to objectively measure the suitability of applicants during the recruitment process.
• Carry out a thorough selection process, using interviews, tests, trial shifts, assessment centres, etc. This will give you a chance to meet the candidate and assess their suitability for the role, the team, the business.
• Write adverts, based on the job description, that accurately reflect the business and the vacancy to ensure you attract the right candidates and that the candidate is not mislead as to what the role is.
• Be aware of phrases in your adverts and job descriptions that may be seen as discriminatory.
• Sell your business and your ideas to your candidates, if you’re not enthused about what you are doing, the best candidates won’t be either.
• If you want your business to grow, identifying individuals who can grow with you and this will help save on recruitment costs as the business develops.

2. Employee status
• Identify whether you are employing ‘employees’, ‘workers’ or ‘contractors/self employed’ as they all have different employment rights. This is quite a contentious issue at the moment particularly following recent employment tribunal cases about whether or not workers are self-employed. eg. Pimlico Plumbers ltd v Smith or Uber v Farrer and Aslam

3. Employment contracts
• Issue an up to date written employment contract. A written contract will ensure that employees know their rights and responsibilities. If there is no written contract some of the terms and conditions may become established over time and this could lead to misunderstandings as to what is in the contract.

4. Pay and Reward
• Have a clear, consistent and attractive system for paying and rewarding employees.
• Establish objective bonus and incentive schemes, if using.
• Identify any benefits provided eg. Company car, health care, gym membership, flexible working (this can include working from home or flexible hours).
• Understand your legal requirements for setting up a workplace pensions scheme. All qualifying employees should be automatically enrolled onto a pension scheme by 2018. For more information https://www.gov.uk/workplace-pensions-employers

5. Employee handbook
• Create an up to date employee handbook that sets out the expectations of the employer and employee. It is a useful way of communicating the organisations employment rules and procedures, and can be tailored according to the culture of the organisation.
• The handbook should include information on, for example: induction process, equality and diversity policy, pay and benefits, hours of work, annual leave, absence policy, working parents policies, communications policy, training and development, disciplinary and grievance procedures, health and safety procedures, etc.

6. Performance management
• Clearly communicate the performance standards required, so employees know what is expected of them.
• Ensure line managers meet with employees regularly to discuss and address any issues as they arise, to prevent issues escalating unnecessarily.
• Keep documents of any discussions.
• Have a clear disciplinary and grievance process as set out in your employee handbook.

7. Training
• Provide a thorough induction programme for new starters. This is essential for the retention of new staff as they will feel welcomed into the organisation and feel a part of the team.
• Establish what training can be done in-house and what needs to be done externally.
• Identify what budget is available for training.
• Developing your staff is essential for improving engagement. If employees feel that you are investing in them, they will be more likely to invest their effort into the business.

8. Communication
• Keep employees informed about what’s happening within the organisation via internal communication systems eg. social media, intranet, noticeboards, email.
• Give employees the chance to feedback their views on the organisation. This will support the Psychological Contract (the unwritten agreement between an employer and employee that the employer will, for example, provide fair wages and treatment, and the employee will in turn work hard and follow the rules) and encourage employee engagement, as employees will feel listened to and valued.
• Communication can help to reassure employees during times of change. Something that may become important with Brexit potentially on the horizon.

9. Personnel records
• All employees should have a paper or electronic record of their personal and employment details. This is essential for managing your employees and workforce planning.

10. Further Advice

• Velo HR – www.velohr.co.uk
• CIPD – Chartered Institute of Personnel and Development www.CIPD.co.uk
• ACAS – Advisory, Conciliation and Arbitration Service www.ACAS.org.uk