As the economy begins to improve, with the country now officially out of recession and unemployment slightly falling, now is potentially a good time for small businesses to recruit new staff.
Finding the right person for your business is vital as the cost of recruiting is high and can place additional burdens on other staff if new employees are not up to scratch or leave after a short period.
"Hiring new employees is an exciting and important step for any business. It's also a form of investment for your business which needs to be taken seriously," says Roma Bhowmick, a business adviser at Business Link.
"When taking on new people, consider carefully the type of employee you want to recruit and what the impact will be on the business. Whether employing full or part-time, permanent or temporary staff, or self-employed contractors, you will have responsibilities to each of them."
Business Link offers the following tips on how to ensure you make the right recruitment decision:
Skillset: Think about the kind of person you want to recruit. What skills are you looking for? If you are replacing somebody, assess what skills you may have lost and what attributes you would like your new employee to bring. Consider the workload that the new employee will take on. Is there enough continuous work for a permanent member of staff? If not, you may want to consider taking on someone on a more temporary basis.
Suitable candidates: After reviewing the CVs of possible candidates, draw up a shortlist and compare each candidate's skills to the requirements of the job. Those who meet all the specified criteria can become your shortlist. Don't discriminate against applicants on the grounds of sex, age, race, disability or sexual orientation. Get more than one person to compile the shortlist to avoid any bias.
Money matters: Register as an employer with HM Revenue & Customs, set up a payroll deducting tax and National Insurance contributions from your employees' pay and forward that money to HMRC. Staff must be paid at least the national minimum wage, and you'll need to give them a payslip detailing their wages and deductions. Remember, you do not need to keep separate records on the national minimum wage payments. Your overall payroll records should contain this information to meet your statutory record-keeping obligations.
Employee contract: You don't need to produce an employment contract and a separate written statement of terms and conditions. You just need one basic document that will meet your legal requirements.
Protect your business and staff: Take out insurance for the business, and check whether it is affected by employing freelance workers. Make sure the working environment is safe and secure for all employees, by having a solid health and safety policy. Don't forget to also check the eligibility of your potential employees to work in the UK.
Work, rest and play: Employees are entitled to paid holiday, rest breaks, sick pay and to work a maximum of 48 hours per week, although they can formally opt out of the latter. [1]
Flexible working: Parents are entitled to maternity, paternity or adoption leave, and you must consider requests for flexible working from parents of children under six or disabled children under 18, or carers of adults though you can decline these requests for business reasons. Note this is due to change from April 2009 from when you must consider flexible working requests from parents with children up until the age of 16.
What works for you: There are a number of employment options, some more suitable for your business than others, so be sure to choose the right ones. Fixed-term employees for example, can bring in specific skills and labour when needed but they receive the same conditions as permanent staff; this includes the same pay, tax deductions, benefits, and pension. Self-employed workers, on the other hand, usually look after their own tax and NI, but it's always a good idea to check with them that they will fulfil their tax obligations. Finally, freelancers may qualify as workers depending on the contract, in which case they would be entitled to holiday pay.
Employing new staff doesn't need to be complicated and there's no need to pay for external advice if you use Business Link's online tools, calculators and interactive guides. Understand your legal obligations and reduce unnecessary duplication of materials. Complying with employment law can be a lot easier than business owners think.