Hiring Your First Employee

Learn the most common pitfalls of hiring your first employee many businesses make, so you don't!


James Rowland

Commercial Director James leads Account Management, Sales and Marketing at Neathouse Partners.


19 July 2019


11 July 2024
2 min read

Hiring your first employee is a huge step. If your new business has reached this milestone, it can be an exciting time. Bringing new people into your organisation can lead to growth and help your business excel.

However, for many new business owners, handing over responsibility to a new hire can be daunting.

The recruiting process is not cheap and can be lengthy, so it is essential to make sure you do your homework and avoid some common pitfalls.

Below we discuss these pitfalls and explain what action you should take to avoid them.

What Type of worker do you want?

When hiring your first employee, there are three different classifications you may want to consider:

  1. Employee;
  2. Worker;
  3. Self-employed.

It is necessary for companies to understand these distinctions as difference classifications correspond to differ obligations on the part of the employer.

If you don’t treat a worker as they should be according to their classification, you can run into legal problems.

You may think the distinction between an employee and someone who is self-employed, for example, is fairly straightforward.

You may hire a contractor who ends up doing much more work for you than you anticipated and may work with you regularly – regular work or a 'mutuality of obligation’ can blur the lines between the worker’s status.

Employers should consider a variety of factors when establishing a worker’s classification, such as:

  • The amount of control the business has over the individual’s work;
  • How any financial payments are arranged;
  • The integration of the worker into the business;
  • The contract existing between the business and the worker.

The important thing to remember with the status of the ‘worker’ is what actually happens in practice, rather than the details of the contract.

Are you paying enough?

As a new business owner, it’s unlikely that you will be able to pay your new hire a fantastic salary.

With this in mind, you’ll want to avoid underpaying anybody as this could lead to poor retention rates through hires feeling undervalued, unsatisfied and unmotivated to do their jobs. If you do, a competitor may come along with a better offer they walk out of the door.

It is best to do your research thoroughly and understand what your competitors are paying for similar types of roles.

Aim to offer a competitive salary – this will help you attract candidates with more experience, who may be better suited to your company. Offering your employees a competitive salary will also contribute to job satisfaction and employee morale – great things for your new business going forward.

Employment contracts

When you take on your first hire, or indeed any hire, it is a wise idea to have established a written agreement from the very beginning.

This should set out key terms and conditions of employment – all the basics you as the employer and your worker will need to know.

It is essential that the Contract is not in any way ambiguous as if there is a contractual dispute; favour will fall on the side of the employee.

Are your job descriptions up to scratch? 

A poor job description lacks detail, clarity and can even leave you open to discrimination claims.

Including language like ‘school leavers’ or ‘under the age of 25’, could be classed as being discriminatory to the older worker, and leave the business exposed to a potential tribunal claim.

Even if your job description is perfectly safe from a legal point of view, if it the job you’re looking to attract people to isn’t clear or is far too broad in scope, you are unlikely to receive suitable applicants.

Job descriptions should include duties and responsibilities relevant to the role – you need to give applicants a good flavour of the job.

An additional point to consider is the organisational fit of any potential employee. Be sure to include a description of the workplace culture and make it clear what you need from candidates and what you can offer them. Getting the right fit for your business will go along way in contributing to the development of a positive and happy workplace culture.

In summary, try to steer clear of making the common mistakes and you will be far more likely to make a success of your first hiring experience.

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