Getting it right - Hiring your first employee

So, you’ve made it. You’ve worked your a%se off, grown your business and now you need to hire your first person. Where on earth do you start?!

This is an exciting and daunting time for many businesses. Often if you’ve put up your shingle it’s because you’re an expert at what you do. Maybe you think a bit differently from the norm, which is part and parcel of your service offering; it can be scary to bring in someone else who, well, isn’t you. Plus there is all the compliance; where do you even start? That’s what this post is about – where to start and how to hire someone who will be the right fit.

There are some key compliance pieces you need to get out of the way first.

Worker’s Compensation Insurance

First off, Workers Compensation insurance is compulsory for most businesses in Australia once you start employing someone. There are many insurers that you can go through the usual channels to identify and get quotes from (online search, a broker, recommendations from your liability insurer etc.).

Workplace Health and Safety

It doesn’t matter whether your employee is working from an office, on-site, from home or on the road, it is your responsibility to make sure their health and safety are taken into consideration when at work. You must ensure workers and others are not exposed to risks to their health and safety. Your company (if that is your structure) and you personally as an owner of the business or officer of the company, are personally liable for staff safety (hence the compulsory insurance above!). And you’ll likely be surprised by the risks you’re responsible for. As a basic example, if you have someone working from home and they cut their hand making lunch, barring exceptional circumstances that will likely be a workplace incident. It extends through to matters such as not addressing the risk of exposure to family violence (including working from home). The majority of Australian states operate under the National model WHS laws, but each State administers their own program. Google your State’s WHS regulator to find out whom to contact. They all provide resources and information on your obligations and tools for helping you manage them.

Paying people right

It’s essential you understand what Award/s if any, your employee/s are covered by. That will give you a bunch of information about pay rates, minimum shift lengths, and any allowances you must pay. Many people don’t realise an Award covers their employees, and that is how they find themselves in hot water. The FairWork ombudsman provides free advice on determining the right Awards for your business and will happily answer any question you have on how to read and apply them.

Tax and Super

You will need to register with the ATO for PAYG (pay as you go withholdings). Your new employee will need to complete a Tax File Declaration that you will need to comply with and you will need to ensure you're making compliant super payments. If you need assistance with these components, it's best to contact your accountant or the ATO.

Understanding contract types

Do you even need a written contract? Yes and no. Keep in mind you have a contract in place once you offer someone a job even if you don’t write anything down. If you ever end up in court without a contract, the terms of the contract will be determined by anything that demonstrates its terms; anything written during the relationship, patterns of behaviour etc. So you’re much better off having the terms articulated in writing so everyone is clear on what those terms are. You can get free templates from FairWork for some contract types, or you can generate them through services like Lawpath. However, it is worth the money getting an industrial relations lawyer to do you up a template. Please don’t get any old neighbourhood lawyer to do it; I have seen too many of those with significant flaws. Employment contracts are quite nuanced, and interplay with the FairWork legislation and I have never seen a good employment contract from a generalist commercial lawyer.

I have an article here on some of the complexities associated with employment contracts. There are various contract options: permanent, fixed-term, part-time, full time, casual and understanding how they work can be key to ensuring you’re able to think strategically about their use and mitigate your risk by using the correct employment type. This is the very beginning of understanding workforce strategy.

Be clear about what you want the person to do

You will rarely find a unicorn who can do ‘all the things’, and messy in terms of working out the minimum you need to pay them, when you need to hold them to account for something, etc. If it’s just too early to articulate the tasks you need them to do, what you can do is articulate what they’re accountable for vs what you are responsible for. I.e. you might need them to be able to step in and pick up any task that needs doing (within reason!); but their roles is personally accountable for the delivery of X or Y or Z (a specific project, daily task, regulatory function etc). Job descriptions are boring to write, but they are beneficial for nutting this stuff out.

This also helps to resolve the “but no one can do it like I can” bit. My suggestion for your first hire would be to hire someone good at the things that are not your strengths or that you hate doing.

Have a set of policies that you understand.

Policies are super dull, I know, but they are very useful. There are some policies you absolutely should have because there is legal recourse to them through bodies such as your State’s WHS regulator, State or Federal Human Rights Commission, Privacy laws etc. They are:

- A WHS policy

- Anti-Discrimination Policy

- Bullying and Harassment Policy

- Privacy Policy

- Leave Policy

- Complaints and Grievances Policy

- Performance Management Policy.

Policies are beneficial (when actually applied) for setting your organisation's culture and form part of your employer value proposition as they articulate the kind of workplace you are. Having said that, when you’re bringing on your first person, you might just want the basics. The Victorian Government’s business page has a great basic employee handbook covering your must have policies plus more (social media, IT etc.) Similarly, if you use a provider like Lawpath, you can generate generic but compliant books that way too. If you want to stray beyond what’s in those policies, it is worth getting advice to ensure you remain legally compliant and consider some of the ways you can use policies strategically and increase your appeal to employees (that would be from someone like me.)

Read a few leadership books and/or get some coaching.

There are a million excellent books out there; I am just going to give you two to start with as you’re busy enough as it is:

- Radical Candour by Kim Scott. If you start from the start with her approach to leading, you can’t go wrong.

- Nine Lies About Work by Ashely Goodall and Marcus Buckingham. This book will turn everything you think you know about people and performance on its head and ensure you’re not wasting time on management activities that don’t provide value while focusing on the ones that do. It’s quite liberating.

Follow a good recruitment process.

There is much mythology out there about magical ways to hire the right people. Even those with the best strike rate are only getting it right about 50% of the time. Here are the things that science shows work:

  • Advise on SEEK unless you're looking for a highly skilled technical or senior role, in which case advertise on LinkedIn too if you can afford a high click rate. LinkedIn is still not quite there yet outside professional roles because not everyone uses it regularly and it costs a lot for not a lot of exposure unless you're prepared to pay big dollars.

  • Do behavioural interviews. There is a good explanation here

  • Use the role’s job description and base your questions around the key selection criteria, if you haven’t done a job description work out the key selection criteria you need for a role (this is another area where I can help) and work out your questions from there.

  • Ask everyone the same questions and rate their response numerically to help you differentiate. Weight any criteria that are particularly important.

  • Don’t go off gut feel.

  • Ask them to do a work test – i.e. complete a task or two related to the role; again ass these against the selection criteria you have decided on.

  • Have two or three people on your panel if you can to sanity test your thinking.

  • Do referee checks but keep in mind no one provides someone who is going say anything bad

I have a post here on recruiting great people when you don’t have much cash.

Sign up with an industry body that provides industrial relations advice.

Whether it's your state's chamber of commerce or a specific industry provider, when you're first starting out this is a cost effective way to get help when things go awry. They're often not more than $1-$2K a year, which is the cost of a few hours of a lawyer if you're getting advice direct from them. And ask for help early. If you leave issues without resolution they become much more complex to deal with when they eventually blow up. I can help too if useful, one of The Curiosity Company's key services is coaching through issues not just from a legislative point of view, but from a human and operational impact perspective as well.

Finally, to ensure you're completely covered do check in with your lawyer and accountant. Congratulations on building your business to this point and good luck!