As your business grows, you may want to consider employing people. Making this move will involve you in a new relationship that is heavily regulated by law and carries with it some fairly onerous obligations on you, the employer.
Small employers are unlikely to have a dedicated Human Resources (HR) department, but there are many independent consultants out there who provide this kind of service to the small business sector. As a starting point, here are some of the things you will need to think about:
- Employment legislation, particularly rules around maternity leave, unfair dismissal, equality and sickness
- Health and Safety legislation and the requirement to provide a safe working environment for your staff
- Employment contracts and the correct documentation of matters arising during the employment relationship
- The need to register for PAYE in the UK and to deduct tax and National Insurance
One of the key things to understand when it comes to employing people is that you are entering into a contractual relationship that enforces certain behaviours on you the employer along with your employee. It is important to treat this relationship with care ensuring that you don’t prejudice your position by stepping outside the boundaries.
Even if you get on well with your employees you will need to always remember that this is a business relationship. Friends that get involved in your business who may end up as employees will be working for you and you will both need to adjust to the new situation. Cordial relationships with staff are essential and a well motivated team getting the recognition it deserves can do wonders for you. But never forget the old business adage – people who don’t perform will destroy your business!