Top 10 Things You Need to Know When Hiring Your First Employee

Liz Chiva

Hallidays HR Director

Hiring your first employee is an exciting time. Not only will you be handing over responsibility for part of your business to someone new, but you will also have to be aware of your duties and obligations as an employer.

Here are 10 things you need to know to make sure you get it right:

  1. Get employment insurance

You need employers’ liability insurance, as soon as you become an employer.

  1. Set up a pension scheme

The government requires all employers to have a pension scheme available to their employees – even if they don’t use it. 

There are many free schemes out there, for example NEST or People’s pension.

You can choose to defer entry to the scheme for 3 months, but if your employee wishes to be in the scheme and is eligible, then you will also need to contribute after this time.

The current contribution levels are:

  • Employee 5% of salary
  • Employer 3% of salary
  1. Set Up Payroll

You will need to register any employees with HMRC and set up a PAYE. You can contact a local Payroll provider to help you with these obligations.

  1. Decide what you want the employee to do

Think carefully about what you will need your new employee to do. Best practice would be to create a job description which details the tasks an individual will be required to do and the behaviours you would like to see from them.

This will help when you are recruiting and once the individual has started in the role.

  1. Decide what to pay and what benefits you will offer

You must pay your employee at least the National Minimum Wage. You may want to do some bench marking around the role and the industry to see what the going rate is.

You are legally required to give employees a minimum of 28 days holiday per year: 20 days holiday + 8 bank holidays. Pro rata for part-time employees.

You may decide to offer additional benefits such as medical health insurance, or additional holiday allowance, but there is no obligation to do so.

  1. Attracting the right candidates

Firstly, you will need to think about where to advertise. It could be LinkedIn; Facebook; job websites; specialist magazines/website.

It’s important to make your job advert stand out, and to sell the role to your candidates, whilst also including all the other relevant information about the job.

  1. Selecting the right candidates

Once you’ve started to receive CVs, you’ll need to start deciding which ones are worth seeing. Use your job description to help you.

Next you will need to decide what your selection process will look like. Will you use interviews; presentations; tests; personality profiles? Or a mixture? 

It is important to be objective in your selection and ensure that you can defend your selection decision if challenged. Keep notes!

  1. Making the offer & issuing a contract

Normally an offer is made verbally and then followed up in writing with a formal job offer. This normally includes:

  • the job title;
  • confirmation you’ve offered them the job;
  • any conditions, for example that the offer depends on suitable references and eligibility to work in the UK documents;
  • the terms – including salary, hours, benefits, pension arrangements, holiday entitlement and the location of work;
  • start date and any probationary period;
  • what they need to do to accept the offer or to decline it; and
  • the name of the person to contact, with their contact details, in case of any questions.

An employee has a legal obligation to receive a contract of employment on (or before) Day 1 of them starting employment with you, so it is important to have all your ducks in a row here. An employment contract will be more detailed than the offer letter and will include:

  • the employer’s name;
  • the employee’s name, job title and start date;
  • how much and how often an employee will get paid;
  • hours and days of work and if and how they may vary (also if employees will have to work Sundays, nights or overtime);
  • holiday entitlement (and if that includes public holidays);
  • where an employee will be working;
  • if an employee works in different places, where these will be and what the employer’s address is;
  • how long a job is expected to last (and what the end date is if it’s a fixed-term contract);
  • how long any probation period is and what its conditions are;
  • any other benefits (for example, childcare vouchers and lunch); and
  • obligatory training, whether or not this is paid for by the employer.
  1. Carrying out pre employment checks

You need to check someone has the legal right to work in the UK before you hire them. You can be fined up to £20,000 if you cannot show evidence that you checked an employee’s right to work in the UK. Specific documents are required to prove this, and these can be found on the website.

In some circumstances, you can ask a successful candidate to complete a health check before hiring them, but only if this is an absolute requirement of the job.

You may also wish to request references.

  1. What happens if things don’t work out?

You may not get it right first time and that’s OK.

But, if you want to make any dismissals, you need to go about it the right way and get professional help.

If employees have under 2 years’ service, they are unable to claim unfair dismissal at an Employment Tribunal, but they may still be able to claim discrimination. So, you need to be careful.

How Hallidays HR can support you

If you would like to discuss any of the above in more detail, then please do not hesitate to contact us on 0161 476 8276 or email

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