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Taking on Your First Employee

By: J.A.J Aaronson - Updated: 11 Oct 2012 | comments*Discuss
Employee Employer Becoming Tax Pension

As your franchise expands, you will inevitably start to consider taking on extra help. Employees are at the heart of every business, and they can help you to fulfil your franchise’s potential more effectively.

But becoming an employer is a major commitment. It can be expensive, and it will increase your paperwork and management burden. It is therefore important that you think through the process carefully, and understand the implications in advance.

Why Should I Hire Someone?

Hiring your first employee is a big step, and you need to make sure that you can justify it. There are many reasons why it might make sense to hire someone. The most common reason is that you are simply over-capacity; you have more work than you can do on your own. In these cases, taking on an employee will enable you to delegate tasks, manage your business more effectively, and maximise the amount of work you do.

You might also, however, need to take someone on in order to fill a specific skills gap that exists within your business. If there is something that you simply cannot do, and you don’t want to pay a third party organisation to do it, you will need to hire someone with the expertise you need.

Can I Afford it?

Becoming an employer is an expensive prospect. Many business owners fail to think past the headline salary and, while this is the most obvious cost, it is certainly not the only one.

In addition to the salary you pay your employee, you need to consider the tax implications. You will probably have to make employer’s National Insurance Contributions on their behalf. In addition, from 2012 onwards you will be obliged to make contributions into a pension scheme as well.

Finally, you should remember the costs of the recruitment process itself. It is not uncommon for businesses to spend several thousand pounds taking on an employee – not to mention the time commitment.

Should I Use an Agency?

You might well choose to use a recruitment agency to help you take on your first employee. There are several important advantages associated with this. Recruitment agencies are dedicated to filling positions; this is all they do. As a result, it is likely that they will be able to do it more efficiently than you. In addition, by using an agency you can make sure that you spend your time actually running your business.

It is important to remember, however, that recruitment agencies can be expensive. You should make sure that you understand the costs up front, and that you factor these into your planning.

You should also ensure that you have a very clear idea of the sort of employee you are looking to hire, before you begin the process. For example, what specific skills do you require? What sort of person would you like to work with? Are you looking for part-time or temporary help? Do they need any formal qualifications? By considering these factors in advance, you can help to ensure that you get the employee you need.

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