Cheat Sheet

HR for Small Business For Dummies Cheat Sheet, UK Edition

From HR for Small Business For Dummies - UK, UK Edition

By Marc Bishop, Sharon Crooks

When you’re really busy at your small business, working long hours and not sleeping at night, it’s easy to think that bringing someone else on board will fix everything. But taking on a new employee costs time and money and brings legal and other responsibilities, so don’t do it lightly. Make sure you’re prepared to find the right person, make a solid offer you can afford, and have all your paperwork in order before your new employee stars work.

Preparing To Take On Your First Employee

As your business grows, you will reach a point when you can’t do everything yourself, but taking on an employee is a big step, so it’s worth taking the time to do it properly. Before you offer a job to someone, be very clear about what you need them to do. Follow these simple tips to keep yourself on track.

  • Check your business plan and be clear about how this job and this person will help you to achieve it.

  • If you don’t have a formal business plan, jot down a list of all the things that are keeping you busy.

  • You probably like doing some things, and some you need to keep in your control. Make a list of the activities or tasks you could hand over to someone else.

  • Now make a list of things that need to happen for the business to survive and grow. You’ll soon have more time, and you should do the ones you’re good at. Add the rest to the list for someone else.

  • Look at the ‘someone else’ list and check if it makes sense for one person to do all those things. If not, keep some for yourself. It’s unlikely that one person will be good at everything, so group activities together, like sales, customer service and writing proposals, or stock taking, deliveries and invoicing.

  • Write a job description using the list as your guide. Start by writing the key purpose of the job, then a list of responsibilities. Only once you’ve done this, decide what job title to use. (If you start with the job title you’ll write a job description to fit the job title rather than what you and your business needs done!)

  • Think about the skills, qualifications and experience someone would need to do the job well. You can differentiate between the essential and desirable things on the list, to give yourself some flexibility. This is your person specification.

You can use this process every time you need to recruit more people. As the team grows, you will bring in people with different skills and preferences so you’ll need to take these into account with each new vacancy.

Now you’re ready to go out and recruit!

Finding the Right Person for Your Small Business

Unless you’ve got the perfectly qualified neighbour’s son hovering around waiting for you to offer him a job inyour small business, you’ll need to get the word out that you’re recruiting. Follow these tips for finding the right person who will fit the needs of your business:

  • Use your own network – ask friends, family, suppliers and neighbours if they know anyone who’s looking. Don’t forget to give them the job description and person specification to avoid embarrassment when you have to turn down a friend of a friend who doesn’t fit the bill.

  • Advertise. Depending on the job and your budget, you can use the job centre, on line job boards, local shops or national newspapers.

  • Make a short list of the candidates who look best on paper. Put the others out of their misery quickly by letting them know they’ve been unsuccessful.

  • Decide how you’re going to select the right candidate. Use the selection tool that works best for your business – you can use telephone or face to face interviews and ask candidates to make a presentation, fix an engine fault or serve a cappuccino.

  • Put in another step if you’re not sure after the first round. If you need a second opinion, ask someone who knows you and your business really well to talk to your preferred candidate and check them out.

  • Don’t forget that the selection process is a two way street, so you’ve got to make the job attractive for the candidate:

    • If money is tight and you can’t afford to pay as much as the candidate is asking for, find out what makes the person tick and offer something else, like a flexible starting time or an early finish on Fridays.

    • If the candidate is ambitious, talk up your growth plans, and if they want security, give them reassurance that the business is solid.

Now you’re ready to make a job offer.

Making a Job Offer

If you verbally offer someone a job and they accept, the offer is legally binding. Always make a job offer conditional on checking references and the person having permission to work in the UK.

You must follow up in writing to an employee outlining the key terms of their employment, within eight weeks of their start date.

There are certain terms you must specify to employees when offering them a job. The following table outlines these terms.

Term Content
Names of the parties Full name of the employer and the employee
Effective date The date the employment started, and whether any previous
employment will count towards continuous service.
Place of work Location of primary work and any requirement to travel to other
places.
Pay Rate of pay, and frequency and method of payment
Hours of work Hours per week/working cycle and which are normal working
days
Holiday Holiday entitlement, including reference to public holidays.
Detail of how holiday build up is calculated.
Notice period Notice from you and from the employee, during probation period
and after it. Must be at least statutory minimum of one week per
year of service up to a maximum of 12 weeks.
Manager/ reporting to Reporting relationship in the organisation
Sick pay Rate of pay for sickness absence, rules about how to qualify,
must include at least a reference to Statutory Sick Pay.
Collective Agreements Refer to any agreements in place, (usually negotiated by a
trade union) or confirm if there are none.
Working outside the UK Confirm there is no requirement, a requirement for up to a
month, or a requirement for the person to work outside the UK for
more than a month and if so, what the pay arrangements will
be.
Pension Confirm at least basic details of pension plans, auto
enrollment procedures, and opting out rules.
Disciplinary and Grievance Procedures and Dismissal Details of the procedure you will follow or a reference to
following statutory procedures.

Things To Do Before Your First Employee Starts Work

There are some legal steps you must take before you employ anyone to work for your business. If you don’t follow them you could be fined, or even commit a criminal offence. The government website offers some really user-friendly guidance, but here is a quick checklist to get you started.

  • Check that your employee has permission to work in the UK.

    People with a British or EEA passport can work in the UK without a visa. People from outside the EEA or Switzerland must have a work visa, which may have limitations on the type or maximum hours of work they are allowed to do. You must check all employees’ right to work in the UK even if you know they have a British or EEA passport.

  • You must have Employer’s Liability Insurance in place and display the certificate where the employee can see it.

  • Display a Health and Safety poster, or give the employee a leaflet explaining health and safety responsibilities. Both are available from the Health and Safety Executive.

  • Register as an employer with HMRC.

  • Set up a payroll or find a payroll provider to manage employee pay, make deductions of tax and National Insurance, and pay and report to HMRC every month.