Small businesses often question whether employing staff is a goldmine providing a real opportunity for growth, or a minefield, full of danger and uncertainty. The conclusion is often that it is both.

While hiring staff is a crucial part of any business, managing employees can be extremely daunting. However, there are some simple steps employers can and should take to help ensure problems and disputes don’t arise too often and, if they do, that they are equipped to resolve them quickly. If you want your business to succeed, it’s worth taking some time to understand how things should be done.

In this first of a two-part series we provide some handy tips on how to avoid some of the potential risks by adopting a positive approach to employing and managing staff. This first article looks at three key areas focussing on Recruiting new staff, pay, and managing performance.

The Beginning of the employment journey – recruiting new staff

Employing the wrong person is the first common mistake that can easily be made – and frequently is. This can damage productivity and reputation and increase costs if you ultimately need to part company with your new recruit and find someone else. Consider also the potential damage to your business if legal challenges arise from claims of discriminatory practice or failure to check thoroughly that the person is qualified or permitted to work in the UK.

Recruitment tips:

  • Have a clear idea of what exactly the job role requires and the skills and qualities of the ideal employee undertaking that role. Ensure you have a Job Description and person specification that reflects this to avoid any uncertainty.
  • Take care to use non-discriminatory terms when placing job adverts – for example avoid using term such as ‘young and energetic’ which could potentially lead to a claim of indirect age discrimination.
  • Interview consistently and fairly using standard questions and, where possible, involving more than one interviewer
  • Carefully check your potential employee is legally entitled to work in the UK and has the qualifications included on their CV.
  • Always provide a job offer and statement of main terms of employment within 8 weeks of the employee’s start date.
  • Finally, remember to host an effective induction session to ensure your employee settles in and understands exactly what is required of them. Many employees resign within the first 6 months due to ineffective introduction to the business.

Paying your staff

Whilst employee motivation is a complex issue and could warrant a news article all of its own, it is clear that if your rates of pay are not competitive, then you are likely to encounter difficulties recruiting and retaining key talent, and could well face employee grievances or discontent.

Be aware of the various regulations governing how we pay our employees – remember for example, the National Living Wage and the fact that by law (Equal Pay Act) you are required to pay the same rates for men and women who perform like-for-like roles. The latest addition to this suite of regulation is the introduction of the Gender Pay Gap reporting requirements which we covered in a previous newsletter. If you employ more than 250 employees, you are required to publish how you remunerate your employees by gender.

Payroll tips:

  • Do your research and find out what your competitors are paying.
  • Ensure you offer an hourly rate which is at least equivalent to the National Living Wage (currently £7.50 for over 25’s)
  • Consider not only the legal minimum pay requirements and competitor benchmarking, but also internal rates of pay.
  • Ensure you have a consistent approach to setting salaries for men and women – not forgetting that this includes discretionary benefits such as pensions and company cars.
  • Where possible have a formal pay structure in place. As a minimum track and monitor your employees’ pay and ensure you can objectively justify any differentials or anomalies which do exist.

Managing Performance

This can be a big issue for businesses. I am often contacted by managers who have found themselves in difficulty as staff are either not performing or not behaving as they should and they are unsure how to handle this. Remember managing performance is not just about managing poor performance. Most people like to know how they are doing and how they can improve. If you don’t provide that feedback or communicate effectively, this can in itself lead to low levels of motivation and poor employee performance, which in turn will put an additional strain on the business and affect the bottom line. At its worst, poor management of performance can lead to tribunal claims for unfair or unfair constructive dismissal or even discrimination if problems are not handled well – the costs of which are self-evident.

Managing staff performance tips:

  • Everybody likes to know what’s expected of them, so clearly communicate what you need from your employees and their role – ideally in the form of clear objectives with agreed timescales.
  • Ensure you have a process for monitoring the performance of individuals on an ongoing basis and provide regular feedback, both positive and negative.
  • Conduct annual appraisal reviews and follow up with a brief written appraisal report – but don’t store all gripes and concerns up to be raised at this meeting.
  • Be prepared to have difficult conversations and discuss concerns about performance as soon as they arise.
  • Briefly document all your discussions – always be in a position to be able to prove the steps you have taken along the way as this may be needed in the future.
  • Where necessary, take action through a formal disciplinary process if the problems continue.

We hope you have found this brief snapshot useful. For more details of how employing staff can work better for you, or to discuss a particular employee concern, please feel free to get in touch with us on 07880 207483 or email