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Key factors to consider when hiring employees

When you are starting out as an employer there are lots of things to think about. For example, how do you go about hiring the right person? And once you’ve set them to work how do you get the best out of them?

Many small firms feel they don’t have enough time or resources to devote to employment issues but, as this guide shows, looking after your employees can make you more effective and helps you to avoid costly and time-consuming tribunal hearings.

We have listed below the top 8 tips we advise our clients to consider before hiring a permanent employee.

1. Know the Law

Unfair dismissal: You must have a good reason to dismiss someone be able to show that you have been fair in the way you have acted. This means:

  • Informing the employee of the problem you have with their conduct or performance
  • Holding a meeting to discuss the problem
  • Allowing the employee to be accompanied
  • Transparency when deciding on appropriate action
  • Providing employees with an opportunity to appeal.

Some reasons for dismissal, such as pregnancy and unauthorised deduction of wages, are automatically considered unfair and employees can claim unfair dismissal on these grounds regardless of how long they have been employed.

Other legal elements of employment that need to be considered include:

  • Notice: An individual is entitled to one week’s notice if you wish to dismiss them. The notice rises to two weeks after two full years and continues to increase by one week per year up to a maximum of 12 weeks. Notice periods can be extended by agreement.
  • Wages: It is unlawful to deduct money from a person’s wages unless you are either legally required to do so, have a contractual right to or have a separate written agreement signed by the individual.
  • Holiday Entitlement: Employee’s are entitled to holiday leave from the first day of their employment. If you need help to calculate current or future entitlements, go to
  • Maternity Leave: An employee has the right to 52 weeks Maternity Leave regardless of their length of service. They also have the right to 39 weeks maternity pay. If you’d like more information about maternity leave and pay go to Shared Parental Leave is a new entitlement for parents with children due to be born or adopted on or after 5 April 2015. For more information go to
  • Flexible Working: Employees have the right to request flexible working. Get to know best practice and legal requirements around flexible working by visiting working

2. Sort out an Employment Contract

  • Put the details of an employee’s contract in writing as it saves any misunderstandings later.
  • Legal Check: The law requires employers to provide most employee’s within two calendar months of starting work, with a written statement of the main terms of the contract. This should include things like pay, holidays and working hours.

3. Pay the right rates

  • Find out what the going rate is and think about what you can afford. Remember that ‘total pay’ can often be more than just the annual salary or weekly wage as it may include pensions, loans, travel and meal subsidies.
  • Legal Check: From the first day of employment all employees have the right to be paid no less than the National Minimum Wage. Rates are reviewed each October.

4. Recruit the right people

  • Recruit the right people by drafting a description of the job you want performed and a list of all the personal qualities and skills you require from the applicant.
  • Advertise effectively using a variety of sources such as employment agencies, local press and the internet.
  • Legal Check: Potential recruits have the right not to be discriminated against on the grounds of sex, race, disability, sexual orientation, religion and belief, age, gender reassignment, marriage and civil partnership, pregnancy and maternity.

5. Start on the right note, Training and induction

  • Settle new recruits in quickly by getting them familiar with their role, colleagues and the work environment.
  • Training needs to be an ongoing concern. Line Managers in particular can benefit from training to help develop their staff.

6. Set your boundaries early on: Discipline and Grievances

  • Create a Grievance Policy, a Disciplinary Policy & Procedure, and a Health & Safety Policy (all required by law)
  • Create an employee handbook/write company policies to cover off other things like holiday, other forms of absence, standards of performance, timekeeping and use of company facilities and equipment.
  • Legal Check: All workers have the right to be accompanied at a disciplinary or grievance hearing by a colleague or a trade union representative.

7. Control costs by managing attendance

  • Manage absence from sickness by communicating effectively with employees whilst on sick leave. Always talk to your staff when they return from sick absence and check that they are able to resume normal duties. Employees should complete a self-certification form or provide a doctor’s fit note depending on their length of sickness absence. 
  • Help your staff to return to work more quickly by considering flexible working or an altered routine of duties.

8. Communicate

  • Employees need to know about their jobs, the business and its products or services. They also need to know about the terms and conditions of their employment, disciplinary and grievance procedure and also how they are performing in their jobs.
  • Communication also plays a much bigger role in giving employees a sense of control over their work and increasing their levels of commitment to the organisation.

Further Information:

If you have a question or would like advice on anything mentioned in this guide please contact our HR Services team on 01865 292260 or send an email to

If you have a payroll specific question please phone our Payroll Services team on 01986 292276.

Contact Us

If you have a question or would like advice on anything mentioned in this guide please contact our HR Services team on 01865 292260 or send an email to



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