As your business begins to grow, when the workload increases and the time commitment too, you may start to think you need some help. If getting the kids to stuff envelopes for pocket money come invoicing time just isn’t cutting it anymore, it might be time to think about formally hiring some staff.
Hiring staff for the first time can be a daunting prospect – all the hard earned dollars have to stretch a little further, and you’re suddenly faced with the prospect of being someone else’s boss. With that comes the expectation that you have enough knowledge of employment law and NZ tax law to deliver a payroll system, fulfil superannuation requirements, and more.
Having the right small business tools for your company is the first step; whether it’s cloud based IT services or small business apps that keep your business moving, or something as simple as enough office space to cater to an extra human. But before you get to hiring your first staff member, here are a few extra things to consider.
Before hiring new staff
Hiring staff is a risk for any business, but especially an SME. When your business is small, adding another personality to the mix can be difficult. Will they fit in? Will we work well together? What if it turns out they aren’t the right person for the job?
No doubt all these questions will run through your mind, so before you hire new staff it’s probably good to do an audit on your business processes, see where you can make improvements or changes to better your efficiency. And if things still don’t add up and you need a bit of extra help, then consider just how much time per week you need assistance. Deciding to hire staff comes with added costs, so make sure you calculate those costs – financial or otherwise – before going ahead with the recruitment process.
Once you’ve made the call to hire a new employee it’s important to consider the different types of employment available in New Zealand and which contract type is going to work best for you and your business.
The main types of employment contracts in New Zealand are:
– Part-time; usually between 10-25 hours per week
– Casual; work on an on-call basis, as and when required, no guaranteed hours
– Full time; generally 35-40 hours for a standard working week.
– Fixed-term; employment for a specific period of time or total hours.
– Permanent; permanent staff are those who are employment on a fulltime, parttime, or fixed term basis and are therefore entitled to certain employee benefits.
You can also consider hiring an intern or volunteer to help you with your work. Many students studying towards degrees, particularly in things like engineering and IT, require work-experience as a course requirement. Often interns work on a volunteer or benefits only basis, but many businesses choose to pay their interns.
The other option is a contractor who works for a limited time on a project, but has the expertise and experience to come in and get the ball rolling from the get go. When you employ a contractor you generally aren’t intending for them to become a permanent staff member, rather you are using their specific skillset for a set purpose. Perhaps it’s building your website or setting up your IT solutions – their ongoing support won’t be needed on a day-to-day basis, so you just engage them as and when required.
The Ministry of Business, Innovation & Employment have a great Employer guide to employee types on their website, which is free to download.
Recruiting the right person
You’re already an expert in your field, but becoming an expert in recruitment probably isn’t on your agenda. Which is why recruitment agencies manage to be so successful. Knowing how to recruit the right person for the right job is a finely honed skill – reference checks, personality tests, and everything else that goes on during the recruitment process are time-consuming and can be tricky waters to navigate without experience on your side.
If you can’t afford to go to an external recruitment agency then using your existing networks is the way to go. If there’s two degrees of separation between you and a potential employee then the chances are you’re going to get accurate references and a better sense of who this person is and whether they’re right for your business.
Use your existing networks to find a candidate
Use your Linkedin account
Be your own recruitment agent! You can search for people in your geographic locale and industry, preview their skillset and any endorsements before even touching base. You can also use Linkedin to advertise the job and target the advertising to those with specific skills. Before advertising the role on Linkedin make sure your business page is up to date, as well as your personal profile. Create a lasting impression – the good kind.
Advertise on website and email
Put an advert up on your website but also include a link to it in your email signature. That way you’re advertising with minimal effort, and you’ll be circulating it in related networks. Ensure it links to an up-to-date job description and accurate contact details.
Advertise on job websites.
These will charge, but usually not as much as recruitment agencies. Services like Student Job Search are affordable and pre-vet the talent, doing some of the hard yards for you.
Connect with business partners and clients
These are the people who you work with and work for – they know your business ethic. Let them know the type of role you’re seeking to fill and the type of person that would be suitable. They may know just the person for the job.
Job seekers use social media to scope the industry they’re interested in working in, and tend to social follow those they’re most inspired by. So announce yourself on social media! Let the world know you’re hiring and you might get some interesting leads that wouldn’t otherwise be possible through traditional channels, like recruitment agencies, that have more barriers on the road to the employment conversation.
Even if you’re not looking for staff right now it can be a good idea to have something on your website for expressions of interest. If someone’s interested enough in what you do to follow you on social or the blog on your website, then having an obligation-free way for them to get in touch could be a great way to attract unexpected talent.
Know your rights and responsibilities as an employer
As an employer there are things you have to worry about that you didn’t when you were self-employed; paying tax, payroll services, as well as HR and employee support systems. Having the right tools for your small business to remain efficient as its employee base grows is important. Using cloud based systems for your payroll services and accounting can assist you in staying up to date with all your legal tax obligations.
But before you employ a new person you need to register as an employer with IRD. Once that’s sorted you to ensure you’re set up to pay PAYE tax, KiwiSaver, child support payments, and any other automatic deductions from an employee’s wages.
SmartPayroll’s online payroll software can automatically deduct these components from a person’s wages and detail them in the employee payslip. Legally you have to show how you’ve calculated your employee’s wages, and SmartPayroll also does this automatically, including it on the employee’s payslip.
Induction – from payslips to tea breaks
Once your employee’s contract and payroll administration is sorted you’ll need to get their first day, or week, induction planned. It’s always hard starting a new job, and it’s even harder if you don’t know what’s OK and what’s not in terms of flexibility of working hours and breaks.
Here’s a quick checklist for you to run through on your employee’s first day:
- Confirm: start and finish times, break times and durations
- Contact details: confirm your employee’s preferred contact details – including how they will contact you in the event of illness and whether it’s OK for you to contact them on their personal number about ‘work stuff’.
- Workplace Rules: talk to them about any specific rules, policies or conditions of your workplace, including dress code and whether Friday drinks is a ‘thing’ or not.
- Health & Safety: brief them on any safety procedures, workplace hazards, and the evacuation plan.
Settling in – how to make it easier
Make your new employee feel welcome. If you have an existing team then consider having a morning tea or assigning a workplace buddy to show them the ropes. If they’re your first employee then try going out for lunch to get to know them a bit better – after all you’ll be working in close quarters, it’s important you get along.
With any new employee you should make sure you regularly check in with them to see how they’re doing. It’s also good to consider doing this in both an informal and a formal setting: ask them how their weekend was, how they’re feeling after their first week, how they’re getting on with the new office equipment. Regular check ins help you to build rapport with one another and make it easier to address any performance issues (or highlights!) during the course of their employment.
Get your employee payroll sorted
If there’s one thing on people’s minds when they’re starting a new job it’s their first pay. Often people are going to be holding out between the exit pay from their last job and the first pay at their new one. So make sure you get it right from the very beginning with SmartPayroll.
Using SmartPayroll you can take care of all your payroll administration, from calculating wages online to sending employee payslips. Get in touch today to get your employee payroll started.
- Employee cost calculator http://www.business.govt.nz/employeecostcalculator/
- What to do when you employ for the first time https://www.ird.govt.nz/tool-for-business/employer/first-time/
- Read what the Ministry of Business Innovation and Employment (MBIE) says about inductions http://www.dol.govt.nz/er/starting/relationships/induction.asp
- When and how to hire additional employees http://www.entrepreneur.com/article/81244