Managing your employees

Taking on employees for the first time can be a daunting and complicated experience.

Taking on employees for the first time can be a daunting and complicated experience. You need to work out exactly what staff you need, and how to find and recruit them.

There is a range of legislation that safeguards employee rights, and as an employer you need to be familiar with it.

You also need to set up administrative systems to pay your new employees and deduct income tax and National Insurance (NI) from their salaries. Above all, you must learn how to manage staff to get the best results for your business.

Employers who plan ahead, and obtain the appropriate professional support and training, are more likely to succeed when they start to expand their workforce.

Before you start looking for new staff you will need to prepare:

A job description that includes the job title, job purpose, duties, main responsibilities and hours.

A person specification detailing qualifications and experience, skills, interests, motivation, special circumstances and hours they must be available. This can be used to assess candidate suitability. You should also consider if a full-time, part-time or even temporary worker is required.

A competitive salary level and any additional incentives should be costed. You should remember to add employer's National Insurance contributions.

How do you recruit new staff?

Advertising for staff: To attract the broadest choice of applicants, you should advertise the job widely across the appropriate media outlets.

Newspapers are probably still the most common place for people to look for jobs, but use of the Internet is also becoming popular. So if you have a business website, post the job advertisement there or consider advertising with specialised recruitment websites.

Conduct interviews: Hold face-to-face interviews to match the candidate to your job description, as well as to check the suitability of their personality and compatibility with your enterprise.

Arrange a test for candidates if the skills you require from them are easily measurable.

Do not discriminate: You must have fair selection procedures and not discriminate on the grounds of race, sexual orientation, gender, disability, age or religious beliefs.

There is extensive legislation designed to prevent discrimination including the Sex Discrimination Acts 1975 and 1986, the Race Relations Act 1976, the Disability Discrimination Act 1995 and the Employment Equality Regulations 2003.

Legislation regarding age discrimination was implemented in October 2006. You should keep any documentation relating to applicants and interviews for about six months in case there are complaints from rejected candidates. Workers from outside the UK: Ensure that all staff have immigration authorisation to work in the UK under the Asylum and Immigration Act 1996.

How do you make the job offer?

Usually a job offer is made verbally, then confirmation is made in writing. Both these methods constitute a contract. Appoint the staff member for an initial probationary period to make sure that they are capable of doing the job.

You should inform unsuccessful candidates by telephone or letter, explaining why they were unsuccessful.

The successful applicant must be provided with a written statement of their main terms of employment within two months of starting work.

What do you do when the employee starts work?

Carry out an induction: It is important to make new members of staff feel welcome and to introduce them to your business and their role.

Spending time on the induction of new employees will save time and problems in the long run. When a successful induction programme has been established, it is a good idea to get it down in writing for use with future employees.

Assess their training needs: You should decide early on what training will be required so that the new employee can carry out their role effectively.

Organise Pay As You Earn (PAYE) and National Insurance (NI): Contact the local tax office to arrange PAYE and NI contributions for your new employee.

As the employer, you are responsible for deducting income tax and NI contributions from your employee's salary, and for paying these deductions to HMRC regularly. HMRC will send you all the information and paperwork you require, and can also provide advice if you need it.

Documents to bring in: Ask any new employees to bring their NI number and P45 on their first day. Bank details will also be required if salaries are to be credited directly to a bank account.

You may need to see some other official documents, such as a valid UK driving licence, depending on the nature of the job. If the employee will be working with vulnerable adults or children you will also need to check their background for criminal convictions. If you are hiring overseas staff you will need to check a number of official documents

Do you need insurance when employing staff?

Employers must be covered by employers' liability insurance which can be obtained through an insurance broker.

By law you must have a minimum cover of £5 million, although most policies insure for £10 million. This is often included as part of your buildings and contents insurance so you may not require additional cover.

Do you need a written health and safety policy?

If your business has fewer than five employees, you do not need to prepare a written health and safety policy.

However, the Health and Safety at Work etc. Act 1974 led to a number of regulations that affect the health and safety of your staff, and you need to comply with these.

Business Link can help you to develop an understanding of your business's needs and works alongside you to ensure that you manage and develop your employees effectively in order to achieve your business goals.

Call Business Link now on 0845 600 9 006 or email to see how you can get the most from your business.


David Whetstone
Culture Editor
Graeme Whitfield
Business Editor
Mark Douglas
Newcastle United Editor
Stuart Rayner
Sports Writer