Staff can be the greatest asset to your business. But how do you know that you’re taking on the right person? How can you inspire them to give their best? How much should you pay them, and what happens with maternity or sick leave, or if things don’t work out?
Here are 7 key things your should do before taking on staff.
1. Watch this 2-minute video
If you follow our Facebook or Twitter, you’ll probably have noticed that I’m a bit of a Simon Sinek fanboy. In this two-minute video he explains how to manage employees so that they work at their natural best. It’s an absolute must-watch for any employer. (The full speech is also really good.)
2. Get an employment contract ready
All employees must be given a “written statement of employment particulars” from their first day. A clear, carefully worded statement will give you and your employee confidence and help to prevent misunderstandings. Read our blog post on employment contracts to see what you should include.
3. Work out the total cost of employing someone
It’s just the hourly rate multiplied by the number of hours, right? Well, not quite. There are two other potential costs when you employ someone: employer’s NI and employer’s pension contributions. It’s always worth talking to an accountant to find out whether these will apply, and to get an idea of how much they’ll be. There’s also holiday pay, maternity pay and sick pay to consider. See point 6 below for more on these.
4. Set up a pension scheme (or ask us to)
If your staff meet certain conditions, you have to put them into a pension scheme. Even if they don’t, you still have to offer them a pension, so it’s important to have a scheme ready. If you’re a client of ours, we’ll sort this out for you. If not, you can set one up yourself, and there are plenty of providers who don’t charge a setup fee. Our free guide to pensions and auto-enrolment covers everything you need to do.
5. Check rates of pay
Deciding what salary to offer can be tricky. How do you attract competent staff without breaking the bank? A good place to start is the TotalJobs Salary Checker. This will give you an idea of the going rate for the role you’re looking to fill in your part of the country. Of course, you’ll also need to consider how much your business can afford to pay – and make sure you’re offering at least the minimum wage!
6. Brush up on the basics
Employment law is pretty complex, and you should always speak to your accountant about anything you’re unsure of. However, before taking on staff, it’s worth familiarising yourself with a few of the basics.
– Holiday pay – Employees who work 1 day per week are entitled to 5.6 paid holidays per year. Those who work 2 days get 11.2 holidays (2 x 5.6) and so on, up to 28 holidays for employees working 5 days per week. HMRC’s step-by-step holiday calculator is handy for getting a quick and accurate calculation. NB: Staff start earning holidays as soon as they start working for you, even if they’re on a probationary period. When a staff member leaves, they’ll be entitled to pay in lieu of any holidays they’ve accrued but not taken up to their leaving date.
– Maternity pay – Employees who have worked for you for at least 26 weeks and earn on average at least £120 per week have a right to 39 weeks’ statutory maternity pay. You can reclaim this from HMRC and in some cases get them to pay it to you in advance. Here‘s how to calculate maternity pay.
– Sick leave and pay – One thing employers can’t reclaim is sick pay. For the first three days an employee is off, you don’t have to pay them anything. After that, you have to pay them £96.35 per week for up to 28 weeks, assuming they provide you with a doctor’s note and were earning at least £120 per week before their sick leave. (These figures apply to the 2021-22 tax year.)
7. Have a clear disciplinary procedure
A quiet chat is often the best way to resolve minor issues and improve an employee’s conduct. But you need a clear written procedure for more serious breaches of the rules. We recommend basing this on the ACAS Code of Practice, and using their letter templates for each stage. You can also call them for free confidential advice at any time.
Thinking of employing people, but not sure where to start? Get in touch.
