6 things you should consider before hiring your first employee?

Employment application

(UK related content) There could come a time when you may want to expand your window cleaning business and so getting your first employee is crucial to that goal. Where do you get your staff? How do you interview? What should you look out for?

Here at WCM we have all the questions to these answers and more. Today we are looking at employing your first employee for your window cleaning business.

There are 6 things you should consider at the time you are ready. Being prepared and doing the research is key to everything. Hopefully this run down will point you into the right direction.

One thing to make you aware of is as soon as you hire your first employee you then become governed by employment law. It would be advisable for you to immerse your self into this topic. This site will help you https://www.gov.uk/employing-staff

Here we have the top 6 things you should do before hiring staff:

Health & Safety – A documented health and safety policy is a legal requirement if you employ five or more people. If you have fewer than five employees you do not have to write anything down, though it is considered useful to do so if, for example, something changes.

A lot of new businesses make the mistake of thinking they do not need a company health & safety system. And in theory HSE say should you have less than 5 employees you don’t need one.

I disagree. From day one it is good practice to create your company H&S System the minute you hire your first employee, infact I would be as bold as to say the minute you set your business up. Why? Well consider this. You are governed by the same risks and laws as the window cleaning company with 5 or more employees. Your H&S System demonstrates to the HSE that you have considered risks within your business and have relayed this information to your employee, and that the employee understands those risks. Furthermore those risks may attract further training that is connected to an activity such as ‘using a ladder’.

If an employee has an accident at work and that employee is either seriously injured or worse killed, then HSE will look for evidence of training and risk assessments. Not got these? You’re in hot water.

HSE are not going to say, “hey, you only have one employee….. Why didn’t you say anything..?” ..And walk away! The penalty fine or possible prosecution for manslaughter will be enough to close you down.

Prove that your employee, Jimmy, was shown how to use a ladder and he understood it and that he was given the risk assessment you did for that activity. Your H&S System will take care of this together with your training program.

I would recommend you taking an IOSH course. They cost about a 100 quid and takes a day to complete.

Get a PAYE reference for your business – You will have to tell HMRC that you are now an employer. They will set you up on a PAYE Scheme (Pay As You Earn)

With this, you will get a unique PAYE reference number for your business. Any payments made through PAYE will include your PAYE reference. This will be the reference you give to the payroll company that will handle your payroll. Any payments for deducted income tax or National Insurance Contributions (NIC) from your employees pay will be paid directly to HMRC. Be prepared to pay an amount to HMRC as employers have to contribute to the employees NIC.

Get employers liability insurance or EL – This is a legal requirement. Some commercial clients will ask for your certificate. This insurance covers for damages caused by your employees or should an employee claim against your business. The cost of this is usually 3+ times more (depending on how many employees) than a standard Public Liability or PL.

Setting your terms and conditions of employment – Before employing an employee, learn about employee statuary rights. These are the base MUST HAVE terms in the work contract between you and your employee. This is usually called a Statement of Terms and Conditions of Employment. With in that you will state things such as place of the business, employees details, agreed pay and hours worked.

The T&C’s will also include your company rules on things such as smoking or dress code and will outline disciplinary procedures and holiday entitlement.

My advice here would be this. Think about the work you have, is some of this unsociable hours, do you need employees to work weekends for example? Make sure your employee understands working weekends is required. You make the rules, its your business and your clients, but be fair.

Deciding on a pay rate – Pay rates differ from place to place in the UK. If your employee is an apprentice then pay the apprentice rate. For a window cleaner that does not drive you could be looking at a pay rate anywhere from minimum wage to £8 per hour (date of written article 21/2/17).

On average employees that drive will be paid between 8 and 10 per hour. The tail end towards the 10 mark is more reserved for employees with some responsibility. But it is up to you how much you want to pay per hour. And if the work is rope access then that hourly rate starts to climb.

One myth to blow out of the water… ‘if you pay your staff right and look after them, they will stay with you’. In reality it does not work that way. It is all down to the mind set of the person you chose to employ. I will discuss this topic ‘weeding out your future employee/competitors’ in a later blog.

Managing the payroll – When I first started, my first employee was my sister. I had my PAYE Scheme and my accountant dealt with the paper work side to this. At first I paid cash with a PAYE wage slip into small money packs, weekly. When my business grew and I was hiring many more people, I needed to out source this work and pay via bank transfer.

Usually there is a small nominal fee to set up each employee with a Payroll Company and then a cost such as £1.75 per employee each time the payroll run was carried out. When your crew grows to 10, 20, 30 you are talking £50 to £70 per week.

We decided to move our payroll to monthly pay therefore cutting this cost by 75%!

A payroll company will also deal with your legal Pension Automatic Enrolment responsibilities… more on ‘Auto Enrol – don’t get ripped off!’ in a later blog.

 Good luck, on your first employee. It really is not as scary as it might seem.