Things to Know Before You Hire Your First Employee
Hiring your first employee is a big step as a business owner. It feels great that you're ready to grow your business and delegate some responsibility in order to narrow your focus, but it's also natural to be nervous about the process. Below are some of the things to bear in mind when hiring your first employee so that you can prepare and make the right decision for your business.
1) Payroll
When you hire an employee (rather than a contractor), you need to put a payroll system in place to make sure that employees get paid the right amount at the right time. Otherwise, your staff won't be with you for very long!
You will need to deduct PAYE, USC and PRSI each pay period on behalf of your staff and pay these amounts to Revenue. You will need to submit a PAYE Return (P30) to Revenue each month. You will also need to make sure that all staff get the right holiday entitlements, bank holiday entitlements and sick leave.
While this may be an area of your business that you decide to outsource, you can use software like Simplepay to make things easier if you are running the payroll inhouse.
2) Contracts
It is a legal requirement to have a written contract in place with all employees. This document should outline the employee's job duties, hours of work, pay rate, and benefits. It's also a good idea to include an exit clause in case the relationship between employer and employee doesn't work out.
3) A Code of Conduct
When you're operating solo, you don't really need a code of conduct - you know how to behave. However, when you have employees, it's important to have a code of conduct in place that everyone is expected to follow.
This document should outline the company's expectations for employee behavior. It should also include disciplinary procedures for employees who violate the code of conduct. If you are unsure about what to include in your code of conduct or Employee handbook, I recommend Liz Leavy at Horizons Advisory/ The HR Hub for any support you might need.
https://www.horizonsadvisory.net/
4) Management Skills
If you're not used to managing people, it's important to learn your responsibilities under Irish Law as a registered employer. You will also need to have the basics of good people management before hiring your first employee. This includes setting expectations, providing feedback, and creating a positive work environment.
This is an important part of your growth as an entrepreneur. Almost all businesses will go through the same growth cycle, starting off as a solopreneur, moving on to a team structure in the form of freelancers and contractors and eventually hiring employees. Learning great management skills as early on in your journey as possible will set you up for success later on as your business grows and you add even more employees to your business.
5) Hire Based on Attitude
You can teach new skills and provide experience, but you can't change a bad attitude!
That's why it's important to take attitude into account when hiring your first employee.
Look for someone who is positive and enthusiastic about their work. Employees who are keen to grow and develop their skills will prove immensely valuable to you and your company.
Of course, you may well be keen to hire an experienced employee, but still be sure to screen candidates carefully and pay close attention to their attitude. Cultural fit for your business can have a huge impact in the long run!
6) Ensure That You're Financially Ready
Hiring employees is a great way to grow your business, but you need to make sure that the timing is right.
In other words, make sure that you've got enough money in the bank before making this big decision. Once you have an employee on board, it's important not to let them down by being unable to pay their wages on time.
If you're not sure whether your business is ready for its first employee, consult with your accountant or financial advisor to get their opinion. I normally recommend having 2-3 months of the salary for the role in the bank before hiring. This gives the new hire a chance to get settled in and learn the business before there is financial pressure for them to start generating income to cover their salary.
Final Thoughts
When it comes to hiring your first employee, there are a few things you need to keep in mind. The most important of these is getting everything set up so that they get paid correctly and on time. You'll also need contracts for both the employer and the employee, as well as a code of conduct for all staff members who work with you.
If you're not sure whether or not your company is ready for its first employee, consult with an accountant or HR advisor who can help guide you through the process of hiring employees, managing all their associated responsibilities and ensuring that your operations remain cost-effective.