With only two months to go until the new Employment Allowance* comes into effect, research by the Federation of Small Businesses suggests that almost a third of small businesses plan to use the allowance to employ new staff. For many businesses this will be their first move into formal employment, and represents a significant change after relying upon the efforts of the owner, family and friends!
Whilst the reduction in the cost to the business of employment will be welcome, many first time employers will still feel significant apprehension associated with taking on their first employee. And the potential costs of correcting a bad employment decision can still be very significant. How do new employers avoid a potential employment nightmare? Here are a few tips:
- Consider whether you feel confident taking on the recruitment job alone, or you would benefit from some specialist help. There are HR professionals who offer flexible and cost effective support for small businesses. Their experience can be invaluable in helping you avoid common employment hazards.
- Be clear about the role and write a job description. In any small business a degree of flexibility will be required, but it is still important to define the fundamental responsibilities and expectations of the role.
- Consider the salary package. This will need to take into account what the business can afford and the “going rate” for people with similar skills working in the geographical area.
- Run a proper recruitment process: don’t fall into the trap of offering the job to “the bloke down the pub” or a friend or relative, just because they are readily available. These arrangements are very easy to start, but difficult to finish!
- Produce a check list detailing the skills and abilities that the ideal candidate will need to be able to meet the requirements of the job description. This will be a combination of hard facts, e.g. qualifications, which you can check from a CV or application form, and skills and experiences that will need verifying in an interview.
- Identify the most effective way of advertising the job to potential candidates. There are a wide range of options, many of which are free to use.
- Check all applications against the checklist. Only consider interviewing people who meet the specification you have produced.
- Before interviewing people, think about questions that will help you determine if they have the skills and experience you need. Questions asking them to describe previous experiences that demonstrate a particular skill or ability can be very helpful.
- When interviewing, remain objective. Concentrate on gathering evidence to confirm the candidate has the skills required. Do not be seduced by a strong personality!
- Review all candidates objectively, using the check-list, before making a job offer.
- Once the successful candidate has accepted a verbal offer of employment, confirm all the details in a contract with supporting documentation. It is worth investing in documentation that has been prepared by a professional and is current – rather than a template found on the internet. A relatively small up-front cost can save a lot of cost in the unfortunate event the individual does not live up to expectations!
*Employment Allowance offers employers the opportunity to reduce their Employers National Insurance contributions by up to £2,000 in the 2014–15 tax year. Latest HMRC guidance is available here.
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If you are looking for help planning for growth in your business, including considering employment, I can help. To arrange an initial, complementary discussion: drop me an e-mail, or call 07837 903180.
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