Once you’ve developed your business plan, successfully launched your business and are starting to enjoy life as an entrepreneur, you may be thinking about the best ways to take your business to the next level. Whether you work from home or from other premises, one way to get more done in your business is to hire some extra hands to help.
Hiring your first employee is a big step – and an exciting one. There’s more to hiring an employee than just finding the right person for the job, there are many factors, including payroll, legal requirements and tax, to consider. Here are some tips to help you get started.
Work out what kind of skills your business needs
If you need help with just one specific task, such as bookkeeping or an accountant to help you understand tax rates, paying for their advice as a contractor is probably the best way to go. However, if you need someone to help with the day-to-day running of your business and to look after clients or customers, you may need an employee.
Take a look at exactly what you need help with in your business. Write a list of the tasks you would like someone to do and the kind of skills and experience they might need to successfully perform the role. You can also use this list to create a job advertisement and job description.
Factor in the costs of employing someone
Your prospective employee’s salary is a major consideration, but you may also need to consider:
- whether you need someone on a full-time, part-time, casual or other basis and the entitlements for each type of employment
- superannuation, payroll tax and other legal requirements
- recruitment costs such as advertising the role or using a recruitment firm
- training courses or materials
- added insurance, such as workers' compensation
- uniforms, technology (such as a mobile phone or laptop) or other equipment.
You should also consider non-financial costs – such as your time during the recruitment, training and ongoing management of the new role.
These costs can all add up, but should be weighed against the benefits of having extra help. With an employee on board, you might have more capacity to follow up leads, expand your range of products or services or find even better, more efficient ways to serve your customers.
Understand industrial relations
In WA we have two industrial relations systems: state and national. You’ll need to know which applies to you – this depends on the type of business you have.
In general, if you have an incorporated business (with ‘Pty Ltd’ or ‘Ltd’ in your business name), you’ll probably fall under the national industrial relations systems, while other business types follow the state industrial relations system. Learn more about WA’s state and national industrial relations systems.
Know your employer obligations
Hiring someone in your business means becoming an employer, which comes with a new set of responsibilities beyond working for yourself. As an employer, you’ll need to know about:
- equal opportunity laws
- pay and employment conditions
- tax and superannuation
- keeping employment records
- leave entitlements
- how to make sure you have a safe workplace
- workers’ compensation insurance
- injury management
There’s a lot to know when bringing your first employee on board – and we’re here to help. The information on our blog is intended as general information only. To discuss your business and get your questions answered, get in touch with our free small business advisory service.