Hiring your first employee as a small business

Hiring your first employee as a small business

HR & RecruitmentFounder Resource

Key takeaways. You can read to full original blog post here.

Small business owners often struggle in the foundation phase to understand the real cost of bringing their first employee on board.

With that in mind, here’s what to consider.

Posting the job advert

  • Interview yourself or hire an agency to do it for you.
  • Publish ad for free on the government’s JobCentre website/create an online or print ad/post it on social media

Calculating the salary

  • Salary needs to be calculated to ensure fair wages
  • If they’re on shifts then you need to make sure that they’re paid at least the National Living Wage (or the National Minimum Wage if they’re under 23)
  • Check out Payscale, Glassdoor and Indeed to get a better idea of your industry’s standard

The interview

  • Set the date and time with the candidates in writing
  • Before the interview, have a good look over the CVs you’ve received and make notes on each candidate
  • Figure out how long each interview will take, leaving time at the end for questions they may have
  • Have a quiet spot to do the interview and turn your phone and email notifications off
  •  If you’re doing the interview online, ensure you’ve got the latest version of your video chat software downloaded

Do background checks

You’ve selected a candidate. Firstly, check that they have the legal right to work in the UK. They’ll need to present one of the following documents:

  • Biometric residence permit number
  • Biometric residence card number
  • Passport or national identity card
  • Find out how to check that the document allows someone to work in the UK at the government website.

Roles which involve working with children or other vulnerable people or are in the security sector will need a Disclosure and Barring Service (DBS) check. More detailed checks are available for jobs such as childcare and healthcare. Note that there are different check processes in Scotland and Northern Ireland.

You can request:

  • A basic check – shows unspent convictions/conditional cautions
  • A standard check – shows spent/unspent convictions/cautions
  • An enhanced check – shows the same as a standard check/any information held by local police that’s considered relevant to the role
  • An enhanced check with barred lists – same as an enhanced check plus whether the applicant is on the list of people barred from doing the role
  • If you carry out criminal records checks, you must have a policy on employing ex-offenders to present if asked by an applicant

Insurance and income tax

  • You need employers’ liability insurance, to help you pay compensation if an employee is injured/becomes ill because of the work that they do for you.
  • Policy must cover you for at least £5m.
  • Law requires that national insurance is paid for. This also applies to PAYE income tax, which will be deducted from the salary.

The job offer

  • Send confirmation of the job offer in writing.
  • Include key conditions

The principal statement should include:

  • The employer’s name
  • The employee’s or worker’s name, job title or a description of work and start date
  • How much and how often an employee or worker will get paid
  • Hours and days of work and if and how they may vary (also if employees or workers will have to work Sundays, nights or overtime)
  • Holiday entitlement (and if that includes public holidays)
  • Where an employee or worker will be working and whether they might have to relocate
  • If an employee or worker works in different places, where these will be and what the employer’s address is
  • How long a job is expected to last (and the end date is if it’s a fixed-term contract)
  • How long any probation period is and conditions
  • Any other benefits
  • Obligatory training
  • On the first day of employment, you must give your employee or worker information about sick pay and procedures, other paid leave (such as parental leave) and notice periods.
  • The written statement must be given to your employee within two months of the start date of employment. Must include information about pensions and pension schemes, collective agreements, disciplinary and other grievances and any other right to non-compulsory training.

Register as an employer

  • Tell HMRC that you’re now an employer before you pay your first member of staff.
  • Registering can be done on the government website.

Do I need to enrol my staff member in an employee pension scheme?

Yes! Staff eligible to be enrolled if they are:

  • Aged between 22 – Pension age
  • Earn at least £10,000 a year
  • Normally work in the UK


  • Have all of their tech set up on their first day
  • Who the target customer is and what they’re looking for
  • Chat with them over video call – working hours/dress code/expectations
  • Encourage them to do video calls to get them used to who they’re working with.
  • You’ll need extra platforms like communications and shared documents for ease of workflow.

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