Hiring your first employee – step by step - Image

Hiring your first employee – step by step

Hiring your first employee is a big step for any small business. It is a very exciting moment, but it is also one that can pose some potential problems.Recruitment is not something that you can leap into blindly. Instead, you need to give careful consideration to a number of factors in order to ensure that you end up with the employee you need. We have compiled a step-by-step guide to help you through your first recruitment process.

Assess your needs

The first step is to work out exactly what you need. What skills are required of your potential employee? Do you need someone with specialist knowledge? If so, will they be trained in-house, or will you seek out someone with existing skills? You should also consider the potential for contracting with freelancers, rather than hiring an employee. This can often be a more cost-effective option for small businesses.

Consider the cost

It is important to understand the total cost of hiring an employee. Clearly, the headline salary is a crucial concern, but it is not the only outlay. You should also make sure that you factor in things like National Insurance Contributions, employee benefits, the cost of training, and pension contributions, remembering that under new auto-enrolment rules every worker who earns more than £9,440 a year and is over the age of 22 will soon be entitled to be enrolled in a workplace pension scheme.

Define the role

By properly defining the role that the employee will play you will significantly increase your chances of finding the right individual. By using the information you gathered in the first step, produce a job description setting out the fundamentals that you expect from your employee. This document will not only prove crucial when advertising – it will also help you get a better handle on how work resources will be allocated.


You are now ready to advertise your vacancy. There is a range of places in which you might do this. Traditional locations like the local paper may still be useful, but there are now other options that might prove more cost effective. The major job listings websites can be particularly efficient as they allow you to not only advertise your role, but also search through thousands of CVs from people looking for jobs. This way you can increase your chances of finding an individual with the skillset you need.


Interviewing is perhaps the most important step in the hiring process. You might consider conducting phone interviews with prospective candidates first, and then inviting those who you want to speak with further in for a face-to-face chat. Build a list of common questions that you will ask each candidate, but be ready to improvise in order to draw out each individual’s strengths and weaknesses. Take notes during the interview in order to ensure that you have the information you need to make a decision.

Do the paperwork

Once you have decided on a candidate you need to do the paperwork. Employment contracts are not necessarily written down, but you are obliged to provide a document called the ‘written statement of employment particulars’. This document must include key details such as the business name, the employee name and job description, start date, payment details, hours of work, holiday entitlement, and the location of work.


All employers must register as such with HMRC. You can do this online, using the HMRC website. You will also need to provide HMRC with your new employee’s details and, crucially, you will need to make deductions from their wages for tax and National Insurance Contributions. You might consider using payroll software to help you calculate how much to deduct. More information on your obligations to HMRC is available by calling the New Employer Helpline on 0300 200 3211.

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