For many small business owners, there comes a point where there is simply too much work for one person. Hiring your first employee can free you up to grow, but it also brings new responsibilities. Getting the basics right from the start saves a lot of stress later.
This checklist is aimed at UK businesses. Rules change, so always check the latest guidance on GOV.UK or speak to an HR adviser or accountant before you hire.
Be clear about the role
Before writing a job advert, decide exactly what you need. Which tasks will this person take off your plate? How many hours are needed each week? Is this a permanent role, a fixed-term contract or something a freelancer could do instead?
Write a short job description covering the main duties, the skills required and who the person will report to. It will help you advertise, interview and later manage the role.
Work out the real cost
Salary is only part of the cost of employing someone. You will also need to budget for:
- Employer’s National Insurance contributions above the relevant threshold.
- A workplace pension, as most employees must be automatically enrolled and you will need to contribute.
- Holiday pay. Full-time employees in the UK are entitled to at least 5.6 weeks of paid holiday a year.
- Equipment, training and any software licences.
It is sensible to make sure the extra work the person enables will more than cover these costs.
Pay at least the legal minimum
Make sure the pay meets the National Minimum Wage or National Living Wage for the employee’s age. The rates usually change every April, so check the current figures.
Check they have the right to work
You must check that every new employee has the legal right to work in the UK before they start, and keep a record of the check. GOV.UK explains the documents you can accept and how to carry out online checks.
Get employer’s liability insurance
Most employers are legally required to have employer’s liability insurance from the day the first employee starts. If you already have business insurance, your insurer can usually add it.
Register as an employer and set up payroll
You will normally need to register with HMRC as an employer and run payroll, reporting pay and deductions each time you pay staff. Payroll software or your accountant can handle this. Do it before the first payday, not after.
Put it in writing
Employees are entitled to a written statement of their main terms of employment from their first day. This covers things like pay, hours, holiday and notice periods. Many businesses use a full contract of employment that includes this information.
It is also wise to have simple written policies on things like sickness absence, holiday booking and how to raise concerns.
Think about health and safety
Even in a small office, you have duties to keep employees safe. Consider the risks in your workplace, write them down if you have five or more employees, and make sure your new starter knows the basics on their first day.
Plan a proper first week
A good start makes a huge difference to how quickly someone becomes useful, and how long they stay. Have their equipment and logins ready. Introduce them to key customers and suppliers. Explain how the business works, what good performance looks like and who to ask for help.
Schedule short check-ins at the end of the first week, first month and first three months.
Learn to delegate
For many owners, the hardest part is letting go. Your first employee will not do everything exactly as you would, especially at first. Explain the outcome you want, give them room to work out the details, and offer feedback along the way.
The whole point of hiring is to free up your time. If you are checking every task, you will lose the benefit. Done well, your first hire can be the moment your business stops depending entirely on you.
