Thinking about taking someone on? Aye, it’s a big step – but a canny one. Most of us reach the point where there’s just too much graft for one pair of hands, and that’s a good sign. But it’s also a sign of growth. You’ve built something strong enough that you can’t (and shouldn’t) do it all yourself anymore. The trick’s doing it right – getting the help you need without the faff, the stress, or any nasty surprises from HMRC later.
According to the Office for National Statistics (ONS, 2024), over 70% of small businesses in the UK employ fewer than five people, meaning most business owners hit this “first hire” stage at some point. It can feel daunting – you’re suddenly dealing with contracts, payroll, and legal duties – but with a bit of planning, it’s one of the best decisions you’ll ever make.
In this guide, we’ll walk through what’s involved, the risks to watch out for, and the smart ways to get your first hire right from the start.
Work out what you actually need
Before posting an advert, take a step back. What’s falling behind in your business? Are you spending too much time on admin instead of the job itself? Or maybe you’re turning down work because there aren’t enough hours in the day.
Be honest about what’s dragging you down – and what kind of help would actually make life easier.
- Full-time employee: You’ll have more control, but also more responsibility.
- Part-time or seasonal staff: Good if your workload changes through the year.
- Self-employed subcontractor: Flexible, but make sure the arrangement passes HMRC’s employment status tests.
HMRC’s Check Employment Status for Tax tool can help you confirm whether your worker should be classed as employed or self-employed. Getting this wrong can lead to backdated tax, penalties, and interest.
Once you know the kind of help you need, write down the main tasks and hours. It doesn’t have to be formal yet – just clear enough to see whether the role justifies a job, or if a contractor makes more sense.
Know your legal duties as an employer
If you decide to employ someone, there are a few legal steps you must take before they start. It might sound like a lot, but once it’s set up properly, it’s easy to manage.
- Register as an employer: You’ll need to register with HMRC before your employee’s first payday.
- Set up PAYE: This is how you report your employee’s pay and deductions for tax and National Insurance.
- Provide a contract: By law, you must give employees a written statement of employment particulars from day one.
- Pay at least the National Minimum Wage: Rates change every April – the 2025/26 figures are available on GOV.UK.
- Provide a workplace pension: You’ll need to auto-enrol eligible staff and make employer contributions.
We can handle your payroll and pensions setup for you, so you don’t have to worry about the admin.
Be realistic about the costs
It’s easy to focus on the hourly wage and forget the extras. Hiring someone costs more than their take-home pay, and budgeting properly will save you stress later.
You’ll need to factor in:
- Employer National Insurance: You’ll usually pay this on earnings above £9,100 per year (2025/26 threshold).
- Pension contributions: Typically 3% of qualifying earnings for most schemes.
- Holiday pay: Full-time employees are entitled to 5.6 weeks per year, including bank holidays.
- Insurance: Employer’s liability insurance is a legal requirement.
Let’s say you pay a new hire £25,000 a year. Once you include NI, pension, and insurance, your real cost is closer to £27,000-£28,000. Planning ahead for that helps keep your cashflow steady.
Recruit the right way
Good people are hard to find, so it’s worth putting time into getting recruitment right. Start by writing a clear job description – list the main duties, hours, and any skills needed. Avoid vague phrases like “hard-working” or “team player”; be specific about what you actually want.
Then decide how to advertise. Word of mouth is powerful in the trades, but online platforms like Indeed or Facebook groups can also bring in great candidates.
When interviewing:
- Ask practical questions: What similar work have you done? How would you handle X situation?
- Be upfront about expectations: Hours, pay, and what the role involves.
- Check references: Always confirm their work history before offering the job.
Once you’ve chosen your new team member, make sure you complete the right checks – including the worker’s right to work in the UK, which you can check out using the Home Office guidance.
Set them up for success
Hiring’s not just about getting another pair of hands – it’s about finding someone who fits right in and makes the job smoother for everyone. A good start sets the tone for everything that follows.
- Induction: Show them around, explain how you work, and introduce them to clients if relevant.
- Training: Even if they’ve done similar work before, show them your way of doing things.
- Communication: Be clear about what you expect, and check in regularly during the first few weeks.
It can also help to set short-term goals, such as completing a job together or taking on a project under your supervision. This gives you both confidence in how things are going.
Watch out for common pitfalls
Hiring your first employee can be a learning curve, and there are a few traps that catch out new employers.
- Cashflow strain: Paying staff means you need to cover wages even when clients pay late. Keep a buffer in your account for at least one month’s payroll.
- Overpromising: Don’t offer more hours or higher pay than your workload allows. Start small – you can always increase later.
- Ignoring HR basics: Even with one employee, you’ll need policies for sickness, holidays, and conduct. Templates are available from ACAS.
If things don’t work out, remember that probation periods can protect both sides. Make sure the terms are included in the contract, and always follow a fair process if you end employment.
Take the next step with confidence
Getting your first team member on board’s a proper milestone – it shows you’re building something solid, not just chasing the next job. Done right, it gives you more time, more earning power, and the freedom to focus on what you do best.
Yes, there’s paperwork, cost, and responsibility – but that’s what growth looks like. With the right systems in place, it becomes second nature.
If you’re ready to take that step and want to make sure everything’s done right, get in touch with us. We’ll help you plan the costs, set up payroll, and stay compliant, so you can focus on the work that keeps the lights on.
Ready to grow? Speak to our team about how to hire your first employee today.