Hiring your first employee


Hiring your first employee can be daunting, and, especially for a small business, a big responsibility.

Although the step to take on your first member of staff is exciting, it can be a minefield and a demanding process alongside the day-to-day running of your small business.

And while it is testament to the present success of your venture, hiring your first employee may prove stressful before beneficial, especially as it is often many founders’ first taste of the world of recruitment.

Know you’re ready 

Assessing whether a member of staff is currently necessary for your small business is integral to its future prosperity.

While an extra pair of hands can seem like the answer, it is easy to act prematurely to the detriment of your business and finances.

Confirm whether you can afford to hire someone, as they will have to be paid at least National Minimum Wage no matter the size of your business.

Employees also accrue employment rights immediately, and the commitment to sick pay, paid leave and tax deductions can have big financial implications.

There are, however, many indicators that you do need to take on an employee, like tasks that require a specific or specialist skill set such as accounts, sales or technology.

Many business owners also find that as their company grows they simply require additional daily support.

And while some roles require permanent, full-time members of staff, it may be favourable to explore the route of contractors or consultants who can offer the likes of business development or marketing assistance on a more flexible arrangement.

If you have decided hiring your first employee is necessary for your business, ensure you register as an employer with HMRC and set up PAYE.

You must register before the employees first payday, and it can take up to five working days for an employee to be set up.

You cannot register more than two months before you start paying people, however.

You will also need to make sure their place of work is safe and accessible, meaning everything from the prevention of discrimination through to fire, health and safety.

Getting the right person 

Understanding the role you wish to fill within your business is fundamental to finding the most suitable candidate.

Begin by listing the repeatable tasks you have for the potential staff member, and from this you can draft a job description.

The job description should give you a good indication of the level of responsibility and skill you are searching for to support your small business.

Listing specific tasks while leaving room for growth is a good way to avoid future dispute and find an employee who understands the full remit of the role and possesses the ability to do it.

Give some thought to where you will advertise for the vacancy and what options will help reach the type of candidate you’re looking for, with online tending to be cheaper and more effective than newspapers.

Your own social media channels are also a useful and free way to advertise your vacancy, with many jobseekers using the likes of LinkedIn and Facebook to search for roles.

A tip to verify if potential candidates read the job description fully is to ask them to begin their application in a certain way within your advert.

Once you receive applications, the selection process will need to be fair and consistent to find the best candidate, with an interview, or series of interviews, the most common choice.

Setting a task for candidates is also worthwhile, allowing you to see evidence of any particular skills you included within the job description, and how each candidate responds under pressure.

Recruitment should not be rushed, and if the process did not find a candidate you deem suitable for your small business, it is worth relisting the vacancy and repeating the process until the appropriate person is found.


Write your contract of employment before you offer the job to the chosen candidate.

As an employer, you are legally bound to provide a written contract for each employee within two months of the date their employment commences.

Full and part-time workers are also entitled to the same treatment.

While it is hoped it will not need to be referred back to legally, it is also a good offer of security to your new employee.

You will also want to check your chosen applicant’s right to work in the UK, through an official document such as a Passport or a right to work share code.

Given your legal enrolment duties begin the day your first member of staff starts work, it is a good idea to check beforehand whether you need to organise a workplace pension.

You will also be required to notify HMRC of your new employee.

Allowing a probationary period is essential, as it gives your new employee and yourself a chance to terminate the contract without issue should the role not work for either party.

Ready to go

Having already dealt with legalities and contracts, you can spend the first days acquainting your new employee to the role as well as health and safety procedures.

Hiring you first employee is a proud milestone for small business owners and ensuring it is done correctly and nurturing your employee through training and regular appraisals will help fulfil both their, and your business’s, maximum potential.