For some business owners, the eventual recruitment of additional employees is baked right into their long-term business plan.
For others, a seasonal rush, an unexpected illness, or even the knowledge that the business needs fresh talent and additional skill sets, might highlight the fact that they really need some extra help as they grow their business.
Whatever the reason may be for hiring more staff, deciding to bring more people into your business is a daunting prospect.
Aside from general worries about finding the right person — and entrusting them with significant responsibilities — you might worry about whether you truly have enough work to justify taking on an extra person, whether you can afford to pay out a full-time salary, and whether it’s going to be hugely complicated in terms of payroll and pension contributions.
If you can relate to any of those concerns, we’d like to reassure you straight off the bat: taking on an extra staff member doesn’t always have to mean recruiting a full-time employee.
In fact, there are several recruitment options available to small business owners, depending on what you need.
If you take the time to clarify how much additional work you have available and whether you need help all year round or just during peak seasons, you might realise that a contractor or a part-time employee is your ideal hire.
To help you make the decision, we’ve highlighted the most common recruitment options for growing businesses, along with some of the key costs you’ll need to consider before making that hire.
Permanent employees — full or part-time
There are many advantages to hiring a permanent employee.
Once you’ve found someone reliable, and you’ve taken the time to train them up, you know that you’ll have the help you need to make running your business more manageable, whether you have enough extra work to justify a full-time hire or whether a part-time position makes more sense for now.
And assuming you build a strong relationship with that employee, you’ll want to tap into their potential, helping them hit their own career goals as they help you grow your business.
Of course, there are downsides too.
As an employer, you won’t just have to factor in the cost of paying out a regular salary, you’ll have to consider things like pension contributions, National Insurance contributions, sick pay, and holiday pay.
You’ll also have to budget for additional costs such as employee training, providing them with a computer or other equipment, or even hiring additional office space if required. And because finding the right person is so vital to the success of your business, you might also want to consider paying a recruitment agency to help you with the hiring process
There will be additional admin requirements too, which could be a steep learning curve if this is your first employee.
Luckily, there are some amazing accounting software options available to make this process run more smoothly. For example, Clear Books Payroll and HR software takes the guesswork out of your payroll obligations and makes everything — from making salary payments and calculating pension contributions to handling holiday leave — a breeze. Our click-to-pay feature calculates pay automatically and pays all of your staff at once at just the click of a button, to help busy business owners save time.
Zero-hours contracts
If your industry typically has peak periods where you have more business than you can handle, followed by quieter seasons where you’re twiddling your thumbs, hiring someone on a zero-hours contract basis might make more sense. It could also be a good solution to cover unexpected or short-term staff absences.
It’s also a cheaper option as you’re only paying for the hours the person works, rather than paying out a set salary every week/month.
However, while there might be fewer costs and less admin than with a permanent employee, you will still have some obligations to fulfil around things like holiday pay. And you will still have to consider one-off costs like a uniform, desk, or computer as well as ongoing costs like software fees or the extra office supplies you’ll need to provide.
It’s also worth considering that just as you’re under no obligation to provide a zero-hours contract worker with hours, they’re under no obligation to take any work you provide. And as many people would prefer the security of a permanent position, you might find that before you’ve even finished training your new hire, they’re no longer available because they’ve managed to find a permanent job elsewhere.
Contractors
Hiring a contractor, or freelancer is an increasingly popular option. Contractors are self-employed and take care of their own taxes, National Insurance contributions, and pensions, your legal obligations are minimal. Contractors are also responsible for paying for their own training, whether that relates to keeping their existing skills fresh or acquiring new ones.
And because many freelancers have flexible working patterns, you can often work out an ideal number of work hours, whether you want to work with them on a regular basis or only need help at certain times, like before a new product launch or during a busy holiday period.
However, legally, there can often be a fine line between contractor status and employee status, and it’s your responsibility to understand the legal requirements to ensure you don’t cross any boundaries. For example, you wouldn’t be able to offer them so much work that they don’t have time to handle any more clients and you couldn’t dictate when or where they complete their work for you.
If you do decide to go down this route, ensure you’re aware of your obligations and have a contract in place before you begin working with your contractor.
Interns
Taking on an intern can be an excellent way for small business owners to get the help they need to grow their business, benefit from new talent and fresh perspectives, and potentially find a future permanent member of staff.
And it can be an equally excellent way for young people to get solid work experience, enhance their CV, learn new skills, and make new contacts in their chosen industry.
Again, there are important legal requirements to be aware of, and differing cost implications depending on the nature of the internship.
For example, if you’ve taken on a student intern for less than a year as part of their higher education course, you’re not required to offer them payment. However, if your intern can be classed as a worker (more information on that here), you will have to pay them at least the minimum wage and fulfil obligations like holiday pay and statutory sick pay.
It’s also worth noting that, legal obligations aside, there are many ethical questions around providing interns with fair remuneration and decent working conditions and many businesses have been criticised for exploiting new graduates and young people.
Apprenticeships
Much like internships, apprenticeships can be an excellent way to bring fresh talent into your business, nurture relationships with potential future employees, and develop a workforce with skills specific to your industry.
The rules around apprenticeships, however, are a little clearer.
Apprentices must be paid at least the national minimum wage and you may have to contribute a percentage of your apprentice’s ongoing training and assessment costs. How much you have to pay will depend on factors like the size of your business and the age of your apprentice.
Of course, every recruitment comes with certain costs, both financial and in terms of the time you’ll have to dedicate to training and admin tasks like payroll. However, if you’re feeling a little hesitant right now, it’s worth remembering a couple of things.
The first is that, while the extra admin might be daunting to begin with, there are plenty of resources, like Clear Books’ payroll software, that can drastically reduce the learning curve.
And secondly, while the additional costs might seem equally daunting, it’s very much worth questioning not just whether you can afford to recruit for your growing business — but also whether you can afford not to!
Clear Books: Accounting & Payroll Software for Small Businesses
Clear Books is an award-winning online accounting & payroll software for small businesses.
Clear Books makes it easy to calculate pay, produce payslips, track employee absences and report to HMRC. Save time and pay all your staff at once with our click-to-pay feature in Clear Books.
Clear Books was launched in London in 2008 and offers a free 30 day trial with free ongoing support and bank feeds. We’re rated as ‘Excellent’ on Trustpilot.
Get a free 30-day trial of Clear Books Payroll software here.
