How to employ someone: A comprehensive guide for UK businesses

Taking on your first employee represents one of the most significant milestones in any business's growth journey. It signals confidence in your future, marks the transition from solo operation to team leader, and opens doors to capabilities beyond what you can achieve alone. Yet it also introduces responsibilities that extend far beyond agreeing a salary and providing a desk.

Many business owners approach their first hire with mixed emotions. The excitement of expansion potential meets the apprehension of unfamiliar legal territory, additional costs, and responsibility. Research shows that 27% of new hires fail to show up on their first day, whilst 41% quit within just 12 weeks of starting [1]. These figures highlight how getting the employment process right matters not just for compliance, but for business sustainability.

Successfully employing someone requires thoughtful preparation before advertising, structured selection that identifies genuine capability, comprehensive onboarding that transforms nervous arrivals into productive contributors, and ongoing support that maintains engagement over months and years.

Whether you're a sole trader ready for your first hire, a small business expanding your team, or simply seeking to improve how you bring people in, understanding the complete journey - from decision through to day one and beyond - helps you avoid costly mistakes whilst creating an environment where employees thrive.

Summary

• The decision to employ requires careful consideration of timing, affordability, and whether permanent employment suits your needs better than alternatives like contractors.
• Creating clear job descriptions, understanding true employment costs, and setting up internal processes before advertising prevents rushed decisions.
• Legal compliance is non-negotiable. Right to work checks carry penalties up to £60,000 per illegal worker, HMRC registration must happen before or on the first day of employment starting [2].
• The quality of the recruitment process directly impacts hire success - structured interviews, work samples, and clear criteria reduce bias and improve candidate matching.
• Onboarding makes or breaks retention: Effective onboarding increases retention by 82% and productivity by over 70%, making it one of the highest-return investments employers can make [3].
• The first 90 days are critical: Regular check-ins, clear objectives, and buddy systems help new employees integrate successfully.
• Ongoing processes typically include monthly payroll reporting, pension auto-enrolment, performance reviews, training opportunities, and creating development pathways.
• Common mistakes include rushing recruitment, inadequate onboarding, failing to set clear expectations during probationary period, and insufficient compliance processes.

Before you hire: Making the right decision

Is now the right time?

The temptation to hire when overwhelmed can be strong, but premature hiring is cited as one of the seven critical mistakes startups make [4]. Before committing to employment, honestly assess whether this is the right solution. Could you outsource specific tasks to specialists? Would a virtual assistant handle administrative burden more cost-effectively? Might project-based contractors provide needed expertise without ongoing commitment?

One study estimates the total cost of a first employee at 135% of wages paid, factoring in payroll systems, equipment, insurance, social security, administration, and the opportunity cost of training time [5]. For many small businesses, this represents a monthly commitment of several thousand pounds before considering the actual work output.

Consider these questions before proceeding:

• Can you afford the recruitment cost and the salary, even if revenue dips?
• Are there enough numbers of hours of valuable work for this person?
• Do you have the time and capacity to train and manage someone effectively?
• Will this hire generate revenue, save you money, or free you for higher-value work?

If answers point towards "yes," the next step involves understanding what type of working relationship suits your needs.

Employee, worker, or a self-employed contractor?

Before you begin recruiting, it's important to determine what type of working relationship best suits your needs - and to understand the legal and financial implications of each option.

UK employment law recognises three distinct categories, each carrying different rights, obligations, and cost implications. Employees work under a contract of employment with ongoing mutual obligations, cannot send substitutes, and work under your direction and control [6]. They receive employment rights to claim unfair dismissal after two years of service (note this is changing to 6 months service around 2027, subject to consultation), and are not entitled to statutory redundancy pay unless they have two qualifying years of service. However, they also attract the highest costs through employer National Insurance, pension contributions, holiday pay, and statutory payments.

Workers occupy an intermediate status - they must personally perform work and receive core protections like National Minimum Wage and holiday pay, paid holiday and rest breaks. However, they do not receive the full range of employment rights that employees do. [7] Case law such as Autoclenz Ltd v Belcher (2011) shows that tribunals will look at the reality of the working relationship, not just what the written contract states.

Self-employed contractors run their own businesses, bear financial risk, control how they work, can send substitutes, and invoice for services [8]. Contractors offer maximum flexibility and lowest direct cost, but misclassification of employment status carries substantial risks [9].

Taking time to assess the true nature of the working relationship before engaging someone helps avoid costly disputes and ensures both parties understand their rights and obligations from the outset.

Creating a strong foundation: Role definition and essential systems

Writing an effective job description

A well-crafted job description serves multiple purposes: it attracts suitable candidates, provides a selection framework, forms the basis of the employment contract, and sets clear expectations from day one. Start with these core elements:

• Job title: Use industry-standard titles that candidates will search for. "Senior Marketing Manager" attracts more relevant applicants than "Growth Hacker".
• Purpose and context: Explain why this role exists and how it contributes to business objectives. "We need someone to manage our growing social media presence as we expand into new markets" provides meaningful context.
• Key responsibilities: List 6-8 main duties in order of importance. Use action verbs and be specific: "Create and schedule social media posts weekly across LinkedIn, Instagram, and Facebook" rather than "manage social media."
• Essential requirements: List only genuinely essential skills, qualifications, and experience. Each requirement reduces your applicant pool - ACAS guidance emphasizes that unnecessary requirements may constitute indirect discrimination if they place people with protected characteristics at a particular disadvantage without being objectively justified [11]. If someone could learn it in the first month, it's not essential.

Avoid language that directly or indirectly discriminates. Phrases like "recent graduate" (age), "native English speaker" (race/national origin), or "strong and energetic" (disability/age) can be problematic. Instead, specify actual requirements: "requires advanced English proficiency" rather than "native speaker."

Setting up essential systems

Before advertising, ensure you have basic infrastructure in place:

• Register as an employer before the first payday if employees earn at least £123+ a week [12]. Online registration takes 10-15 minutes and HMRC sends an activation code by post within 10 days.
• Have your payroll system ready - whether using accounting software such as FreeAgent (available at no extra cost for eligible NatWest business customers), outsourcing to an accountant, or using HMRC's Basic PAYE Tools [13]. NatWest Mentor can also help you understand your payroll options and responsibilities.
• Research workplace pension providers. Popular options include NEST, The People's Pension, and NOW: Pensions. Employers can postpone automatic enrolment for up to three months, but some duties apply immediately, such as assessing the employee and issuing postponement notices. Setting up the pension scheme in advance helps avoid last-minute issues [14].
• Arrange Employer's Liability Insurance before day one with at least £5 million cover. This is a legal requirement, and failure to have insurance carries penalties of £2,500 per day [10].

With these foundations in place, you're ready to begin the recruitment process and start searching for the right candidate.

The recruitment process: Finding the right person

Advertising and attracting candidates

Where you advertise depends on the role and your budget. Currently, LinkedIn promoted listings start around $200 (£150), Indeed uses pay-per-click from $5 daily (£3.80), whilst UK job boards like TotalJobs charge £89-£379 per listing [15]. For smaller budgets, free options include local Facebook groups, your own social media channels, word-of-mouth through networks, and approaching local colleges or universities for entry-level roles.

Write advertisements that sell the opportunity whilst being honest about challenges. Overselling creates disappointed employees who leave quickly, whilst underselling fails to attract qualified applicants.

Structured selection and interviews

Once applications start arriving, resist the temptation to rely on gut instinct alone. ACAS recommends shortlisting candidates against predetermined criteria derived from your job description, comparing applicants against the requirements rather than against each other [16]. Involving at least two people in the shortlisting process helps reduce individual bias.

When it comes to interviews, structure matters. Prepare a core set of questions to ask all candidates consistently - research shows that structured interviews predict job performance significantly better than unstructured conversations [17].

Interviews only reveal so much, however. Practical assessments often provide a clearer picture of genuine capability. For content roles, request writing samples; for technical positions, set relevant problems; for customer-facing roles, consider role-play scenarios.

Finally, be aware of what you cannot ask before making a conditional offer. Questions about health or disabilities (except when arranging reasonable adjustments for the interview itself), family planning or childcare arrangements, age, or religion are off-limits - unless they relate to a genuine occupational requirement [11].

Making offers and conducting checks

Most UK employers make conditional offers pending satisfactory completion of pre-employment checks. A conditional offer should specify the job title, salary, hours, start date, probationary period, and which conditions must be met [18].

Right to work verification is legally required before employment starts. For British and Irish citizens, check original passports. For everyone else, use the Home Office online checking service with the individual's nine-character share code [19].

DBS checks are required for roles involving regulated activity with children or vulnerable adults [20]. For most other roles, they're optional. Don't request checks beyond what the role requires - overreaching may create data protection and discrimination risks.

Agreeing terms, contracts and the employee handbook

Before employment can formally begin, employers should agree the main terms and conditions of the role, including salary, hours, location, benefits and any flexible working arrangements. These core terms are then reflected in the written employment contract and supported by the employee handbook, which sets out day-to-day policies and procedures.

Key documents at this stage typically include:

• conditional or formal offer letter
• written employment contract
• employee handbook or equivalent policies and procedures
• any role-specific policies (for example confidentiality, IT use, or restrictive covenants).

Preparing for arrival: The pre-boarding phase

The week before they start

The period between offer acceptance and first day - often called "pre-boarding" - significantly influences whether employees arrive confident or anxious. Research shows this phase is often overlooked, yet it sets the tone for the entire employee experience [21].

Send a welcome email 3-5 days before their start date including:

• start time and location (with parking/public transport details)
• what to bring (identification for right to work checks, bank details, etc.)
• dress code and what to expect from the first day
• contact details if they have questions.

Some employers send welcome packages - company swag, a sweet treat, or even a hand-written note [22]. These gestures cost little but create positive impressions.

Prepare their workspace: clean desk, functioning equipment, necessary stationery. Set up their email account, create logins for systems they'll use. Nothing undermines a first day like waiting hours for IT access [23].

Brief their manager and team: Ensure their line manager has blocked time for first-day induction, knows what training to provide, and has clear objectives for the probation period.

Additionally, consider assigning an onboarding buddy. This is someone who can answer informal questions, show them around, and provide peer support. Studies show buddy systems significantly improve early retention and job satisfaction [24].

Where possible, share the employee handbook or your key policies with the new starter before or on their first day, and ask them to read the most relevant sections during their first week.

Essential day-one documentation

Written statement of employment particulars must be provided on or before the first day of work [25]. The statement must be a single document including employer's and employee's names, start date, job title, workplace address, pay details, working hours, holiday entitlement, sick leave arrangements, benefits, notice periods, probation period, and training requirements.

Complete the new starter checklist for HMRC, gathering National Insurance number, student loan information, and tax code details [12]. This informs your payroll calculation from the first pay period.

NatWest Mentor provides ready-to-use checklists and templates to guide you through each stage of the employment process - from pre-boarding and day-one documentation to probation reviews. Learn more here.

The first day: Setting the right tone

Creating a welcoming experience

First impressions matter enormously - 41% of new employees make decisions about long-term stay within the first 12 weeks, making the initial experience disproportionately influential [1].

Morning activities should include:

• personal welcome from their manager (not reception or HR alone)
• tour of facilities - workspace, toilets, kitchen, fire exits, first aid points
• introduction to immediate team members
• health and safety essentials - emergency procedures, reporting accidents
• provision of equipment and access credentials
• introduction to key health and safety information, including fire evacuation procedures, fire exits, and how to report accidents or concerns
• review of the written statement of employment particulars together, along with the employee handbook (or key company policies and procedures), answering any questions.

Schedule lunch - whether taking them out or introducing them to colleagues who can include them. Many new starters feel awkward about lunch on day one; taking initiative removes that anxiety.

Afternoon activities might include initial job-specific training, tour of systems they'll use, meeting key contacts beyond immediate team, and end-of-day check-in: How are they feeling? Any concerns?

One of the most common mistakes is information overload - trying to cover everything on day one overwhelms people [26]. Cover essentials, create comfort, begin integration. Detailed training follows over coming weeks.

The first week: Building confidence

Structure the first week with clear daily objectives that build confidence through early wins. You may use a framework like SMART goals - specific, measurable, achievable, relevant, time-bound [27].

Hold daily check-ins, tapering to weekly once the employee settles down [24]. These needn't be lengthy - 15 minutes to ask how they're finding things, answer questions, and provide encouragement.

The first 90 days: From new starter to team member

The initial three months establish whether someone will thrive long-term or struggle. Effective 90-day onboarding can improve productivity by over 70% whilst reducing early turnover substantially [3].

Example:

• Month one focuses on learning - understanding the business, grasping key systems, absorbing culture and norms, meeting stakeholders, and achieving first small wins. Weekly manager meetings help track progress, identify blockers, and adjust support. This is normally called an induction period where you get to spend time in the different departments of the company, get shown software and systems, and internal procedures. During this period the employee should be shown the organisation’s health and safety policy, sign any required policy statement, and read and understand the relevant risk assessments and safe systems of work. Any mandatory health and safety training should be completed within the first month.
• Month two transitions toward independence - taking on more substantial tasks with less supervision, identifying improvement opportunities, contributing to team discussions, and beginning to demonstrate the skills that secured the role.
• Month three should show near-full productivity - working independently on most tasks, requiring supervision only on exceptions, proactively identifying and solving problems, and integrating fully into team culture.

Many employers conduct formal reviews at 30, 60, and 90 days. These provide structured opportunities to assess progress, provide feedback, adjust expectations, and discuss longer-term development.

Managing probationary periods effectively

Probationary periods, typically three to six months, do not have any special status in employment law. Employees with a probationary period have the same statutory employment rights as other employees, but their contractual rights - for example, notice periods or access to certain benefits - may be different during probation depending on what the contract says.

Document expectations clearly at the start. "Successfully pass probationary period" means little; "Demonstrate ability to manage our social media calendar independently, create engaging content that generates 100+ monthly interactions, and respond professionally to customer queries within four hours" provides clear benchmarks.

Review progress regularly - weekly initially, then monthly. If concerns arise, document them, discuss them with the employee, provide specific feedback and support, and set clear improvement timelines.

Common mistakes and how to avoid them

Many small businesses make predictable errors that damage employee relationships [28]. Understanding these patterns helps you avoid them:

• Hiring too quickly under pressure: Rushing recruitment to fill urgent gaps often leads to poor matches [29]. The "first acceptable candidate" rarely becomes your best employee. Resist pressure to compromise standards.
• Inadequate onboarding: Many employers conduct minimal induction then wonder why new starters struggle [1]. Good onboarding isn't expensive - it requires planning, time, and structured support.
• Failing to set expectations: Assuming people will "figure it out" creates confusion and underperformance. Be explicit about what success looks like, how you measure it, what support you'll provide, and when you'll review progress.
• Avoiding difficult conversations: Delaying feedback when problems arise is common in small businesses where relationships feel personal. However, minor issues unaddressed become major problems.
• Inadequate documentation: If problems arise during employment or you decide to dismiss someone, poor or missing records of performance discussions, warnings, and agreed actions can make it difficult to prove that you acted fairly. Keeping clear notes of meetings, objectives, feedback and outcomes reduces legal risk and helps resolve issues more quickly.
• Treating employment as transactional: People perform best when they feel valued, understand their purpose, and see development opportunities. Taking interest in their goals, celebrating achievements, and investing in their growth creates loyalty and exceptional performance.

Looking ahead: Building a sustainable team

Successfully employing your first person creates foundation for future growth. The systems you establish, culture you nurture, and relationships you build shape your capacity to expand sustainably.

Focus on what you can control: creating clear roles, conducting thorough selection, providing comprehensive onboarding, setting explicit expectations, delivering regular feedback, investing in development, and treating people as your most valuable asset rather than your biggest cost. These practices benefit employees and employers alike, creating environments where people thrive whilst businesses grow sustainably.

This article is intended for informational purposes only and does not constitute legal advice. The information is accurate at the time of writing but may be subject to change. For advice specific to your situation, please consult a qualified professional.

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[12] PGR Chartered Accountants, How to Register as an Employer or Pay Someone Through PAYE, n.d.

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[15] TotalJobs, Advertise Jobs, 2024.

[16] ACAS, Choosing Who to Interview, 2024.

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[18] ACAS, Offering Someone a Job, 2024.

[19] GOV.UK, Checking a Job Applicant's Right to Work, 2024.

[20] GOV.UK, DBS Checks: Guidance for Employers, 2024.

[21] BuildEmpire, Employee Onboarding Process, 2025.

[22] Indeed for Employers, Onboarding Guide, 2024.

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[28] SafeHR, Common HR Challenges for UK Small Businesses, 2025.

[29] Protectivity, Common Hiring Mistakes, 2025.