Small Business Advice: Hiring Your First Employee

May 10 2016, 0 Comments

If you’re now at the stage where you find yourself needing a member of staff to take some of the workload off of you, then it’s a great sign that your business is growing and becoming a profitable organisation.

For newcomers arriving at this point, you need to be aware of the different factors that you must consider during the process. Often, small business owners struggle to grasp the in’s and out’s of the activity and don’t really understand the true extent of hiring their first employee. To help you avoid mistakes and gain a clearer picture of what is involved, we have listed some factors that you need to be aware of:

Salary Calculations

The financial side to this is where you need to take precaution. As well as your continued operating costs, you will now need to account for an additional salary. When it comes to wages, you need to ensure that you meet national minimum wage.


25 +



Under 18


April 2016 (current rate)






*National minimum wage rates change every October.

If you’re wary of your budget you can look to hiring a part-time employee or even hiring someone on a fixed term contract if you need cover for a busier business period.

As your company expands, it is vital that you are realistic and continually assess whether you need addition help, if you do, how many hours do you need them to work and what salary is affordable when compared with your cash flow. The latter point is arguably the most important because as attractive as it is to relieve some of the stress, you need to ensure that you can actually afford to pay your employee each month so be strict and be sensible. You don’t want to eat into your profits and have to start what you’ve built again.


There are a few ways of conducting this part. You can look to hire a recruitment agency. Whilst this is a good idea in regards to removing the ‘leg’ work, this will incur fees in order to find the ideal candidate so this may not work with your budget.

You can look to use free online recruitment portals as an alternative that can be used to track potential suitors. There are many websites you can do this on but bear in mind this will mean manually sieving through every application that comes in, which is often time consuming.

If you are looking to grow your business as a whole, you can look to hiring a human resource job that can then take the recruitment process off of you. This may be a longer winded step but it will set a foundation going forward. 

Tax & NI

It is the law that national insurance is paid. If it isn’t, your business can be hit with serious penalties and financial charges. This also is the case for income tax, which must be deducted from each salary. You need to guarantee that you’re keeping on top of this and that’s why an accountant or bookkeeping software is so beneficial to your setup. It allows you to keep accurate records and have a clear system that you can easily manage.

Parting Note

The investment in a new employee for your business is a hugely worthwhile step from a workload and financial point of view (that is if you abide by the legal requirements that go with it). When combining all of these mentioned points, you need to carefully analyse the implications on your time. Hiring an employee is truly a time consuming process, especially when you take into account that you need to recruit, carry out all of the paperwork, give job training and calculate ongoing financial factors. Can you currently afford to allocate this time as well as run your business as normal?

Hiring is a big step so you want to get it right first time and steer clear of mistakes. Use these factors to help to assess your next move and get off to the best possible staffing start!