If you are a new business looking to expand for the first time with an outside appointment, hiring an employee can be a nerve-wracking process with the pressure on to make the ‘right’ selection. Even for well-established firms this can be a tricky path to navigate with minimal disruption. It’s therefore vital to do all you can to reduce the risk and anticipate problems before you sign on the dotted line.
Here are my 5 top tips when hiring an employee:
- Deciding on job and person specifications seems obvious but it’s just as important, if not more so, to get the cultural fit right. Take time to choose the right people, meet them in different settings and get them to meet any other (prospective) employees. You’ll be spending long days with them in an intense and fast-moving environment, therefore you need to get on with them and be able to rely on them. A bad apple can turn everything sour very quickly.
- Make any appointment expressly subject to receipt of satisfactory references and evidence of right to work in the UK (and criminal record checks if appropriate). Whatever you do, follow up those references and try to speak to referees in person. If you need to recruit urgently and employees have started employment before receipt of references, make it clear that if unsatisfactory references are received, their employment will be terminated straight away. After all, would you leave your children with a childminder whose references you hadn’t checked?
- You need to keep good people away from the competition or from going off on their own. Think hard about how you incentivise your employees. You want them to buy into the business so offer them benefits that make them feel rewarded on top of their basic salary. That could be bonuses, private medical cover or shareholdings (such as under an employee ownership agreement where they get tax relief in exchange for giving up certain employment rights). If that’s not possible, consider “free” benefits such as flexible working including the ability to work from home a couple of days, to vary starting and finishing hours on other days. There are plenty of surveys out there which suggest that offering flexible working can be critical in attracting the best candidates.
- Consider hiring a Non-Executive Director. Without cramping your decision–making on daily basis, a NED can bring a fresh perspective but with the advantage of industry-specific know-how. A NED can help to keep the management team focused and bring objectivity to the boardroom. Even if none of the above strikes a chord, there are always the connections a NED can bring in by way of customer base, marketing experts or potential business partners.
- Think about the end of the relationship before you even begin it. Money and time are at a premium, especially for start-ups, but whatever you do, don’t be tempted to go for “off the peg” employment contracts for senior and/or customer-facing employees. You need to get tightly drafted post-termination restrictions into the employment contract, tailored to your business and your key employees’ roles within it. This will help to stop them disappearing off to competitors and poaching your customer base (or setting off into the sunset in the belief that they can do things better on their own). They will also have access to all kinds of confidential information about your business and you should invest in appropriate IT to protect against its removal.
If your company needs any help when it comes to employment contracts, don’t hesitate to give me or someone else in our employment team a call on 0161 930 5151.