As a small business owner, it is quite a major accomplishment to get to a point where you are ready to hire a team to help you out. This exciting time has its own set of challenges, however, so how should you go about hiring your dream team?

It is said that the average time taken to hire an employee is a month in the UK, longer if you do not want to settle for ‘okay’ individuals who are likely to cost you more money and headaches in the long run. As a small business owner in London, you also know first-hand how easy it is to hire and lose someone, considering the vast amount of talent and jobs available. At Berley, our small business accountants work with entrepreneurs and start-ups across London to grow their business and manage their payroll process, so it is natural to encounter issues posed by our clients pertaining to recruitment. With this in mind, we aim to share a few employment options and tips which can potentially help your business.

The different employment options

Permanent employee

This is the most common type of employment option. In a nutshell, your employee legally agrees to work towards the success of your business. In exchange, you are required by law to fulfil several obligations including registering with HMRC and issuing payslips showing all deductions including PAYE and National Insurance contributions. On top of that, you are required to give paid holidays, sick leave, maternity or paternity leave, and pension.

It is also possible to hire a permanent employee who wants to work reduced hours. For example, a stay-at-home mother who comes to work three days a week instead of five.

As companies are required by law to manage payroll for their permanent employees, most entrepreneurs look to outsource this function to an accounting firm like us the moment they start assembling a team. Regardless if you have a staff of five or fifty, our payroll team offers fully-managed and bespoke services which take care of all aspects of your payroll, leaving you free to focus on your business.

Contractors

Using self-employed contractors, freelancers or consultants to fill gaps in the workforce is an inexpensive and efficient option, as it requires less commitment from both parties. The obvious advantages include:

• Contractors are cheaper than permanent staff as you are not required to pay National Insurance, tax, pension and benefits.
• Contractors tend to be specialists working in niche areas which your business may only require from time to time.
• Contractors allow you to identify the desired knowledge, skills and qualifications you really need.
• The arrangement is highly flexible; contractors can come and go whenever you need them, meaning you can respond better to market changes by increasing or decreasing the number of contractors easily, this is something that you cannot do with permanent staff.
• Most contractors also issue you invoices which you pay as a business expense. While there is no payroll involved, it is vital that your bookkeeper keeps accurate records.

Zero-hour contract employee

Zero-hour contract refers to a casual working arrangement where the business offers a task to a worker when a need arises and the worker can accept or reject. Although zero-hour sounds similar to contractors, they are different in three ways:

• In a zero-hour arrangement, you actually have an employment contract with a worker; it is just that the contract does not guarantee the worker a minimum number of working hours each week or each month.
• A zero-hero contract worker is not self-employed but contractors are.
• HMRC has made it clear that zero-hour workers are entitled to statutory annual leave and must be paid the National Minimum Wage. And even if the zero-hour contract bars the workers from working with other competitors, the rule is not enforceable. On the contrary, contractors invoice you for the work done and they are not entitled to any benefits.

Temporary agency staff

Another possible option is temporary agency staff, which can be hired from an employment agency. This is a low-risk type of employment as you can hire people temporarily and set the amount of time or resources you need for a certain role. Although this is highly convenient, it is a costlier option than employing a person directly as you will have to pay agency fees and commission.

Apprentice

An apprenticeship is an increasingly popular option among growing businesses because it provides competent workers at a lower price. The idea behind an apprenticeship is to give young adults a chance to learn skills and gain experience, and as an employer in England, you may get government funding to cover some of the training costs provided the following criteria are met:

• Your apprentice is working with experienced staff.
• They are learning job-specific skills.
• They are studying during their working week with an organisation that offers additional training.
• You pay them at least the minimum wage, which is £3.90 per hour from April 2019 if the apprentice is younger than 19.
  

Useful hiring tips for small business

The recruitment process is far from easy. And you have probably heard from HR professionals advising small businesses to hire for personality over skill, focus on diversity, or be willing to invest. While those tips are useful, bear in mind that they are not silver bullets and do not apply to every situation.

In this article, we would like to share what Alan Hall, an entrepreneur and angel investor wrote in an article for Forbes.com where he shared a system called the 7 C’s that can help in the recruitment process:

• Competent: look for the necessary skills, experiences and education in relation to the tasks.
• Capability: look for a person who is capable of taking on more responsibility.
• Compatible: look for someone who can work harmoniously with colleagues and clients.
• Commitment: ideally, you want someone interested to stay long-term rather than this job being just a temporary stop on their journey.
• Character: fundamental values like time-keeping and honesty do not go out of fashion, so find a person who possesses similar values to you.
• Culture: values, expectations, policies and procedures shape the company culture; accordingly, cultural fit refers to aligned beliefs and behaviours.
• Compensation: it is essential that the employee is satisfied with the compensation package.

While the 7 C’s are highly useful, keep in mind that finding someone who is committed, pleasant, willing to grow, has the right skillsets, has good values with aligning personality and culture takes time and effort. Also, you may consider using DBS and background checks to narrow down the prospects.

• Disclosure and Barring Service (DBS) – The purpose of this service is to help employers make safer recruitment decisions by processing and issuing DBS checks. There are four types of DBS checks: basic, standard, enhanced and enhanced with barred lists. These checks will involve research into an individual’s background and will result in certificates that an employer can view to see if they are recruiting a suitable person for their company. It is worth noting that if you carry out criminal record checks, you must have a policy on employing ex-offenders and show it to any applicant who asks for it.

• Reference checks – To avoid hiring a candidate with a fraudulent degree or without the experience that they featured in their CV, it is essential to call up references.

The payroll process

Having a dream team helping you can spur growth. At this stage, your focus should be on taking the company to the next level; this means delegating administrative tasks or tasks that are time-consuming to someone else. Payroll is a good example. Instead of spending your time calculating holiday pay and filling out forms, outsource the payroll function to an accounting firm like us.

Our payroll services include:

• Preparing your monthly payroll
• Providing summaries and analysis for general accounting purposes
• Preparing and distributing payslips to your employees
• Providing any compliance work for PAYE regulations
• Completing of P45s
• Completing of year-end employer returns
• Liaising with you to assist in the preparation and filing of P11D

Berley can help you grow your business and manage your financial affairs

At Berley, we are passionate small business accountants in London who do not sit back and remain content with performing run-of-the-mill functions. Instead, we think and act differently to other accountants and strive to go above and beyond to guide and support you throughout your business journey.

Whether it is managing your tax and financial affairs or taking care of your payroll process, you can count on us to surpass your expectations.

Call us on 020 7636 9094 or use our Online Form to arrange a no-obligation meeting and find out how Berley can help you.

This article was first published in 2017 and has been updated on 07/08/19.

If you found the interesting, you might also like:

• What can Berley do for your business?
• Challenges of business growth and how to tackle them
• How to find the best small business accountants

This post is intended to provide information of general interest about current business/ accounting issues. It should not replace professional advice tailored to your specific circumstances.