The path to becoming an employer should be a carefully considered part of your business plan, not a knee-jerk reaction to some recent event. It can be tempting to rush out and hire someone if you\u2019re feeling overwhelmed with work, just met someone you\u2019d enjoy working with or want to pitch for a large contract. While these situations might highlight the advantages of hiring your first employee, it\u2019s important to clarify the opportunity, assess the risks. and plan the best approach for you and your business.<\/p>\n
Here are some signs it might be time to employ:<\/p>\n
One way to start planning is to clarify in your own mind exactly what you and your business need from the employee. Here are some things to consider:<\/p>\n
Here\u2019s a quick overview of the different types of employment, to help you choose the one that best suits your situation.<\/p>\n
Employees:<\/p>\n
Non-employees:<\/p>\n
Before you can check the effects of a new employee on your cash flow, you\u2019ll need to get a rough idea of what the employee you have in mind will cost. Here are some examples of potential costs:<\/p>\n
To help you get a ballpark idea for most sectors and roles, business.govt.nz has a handy employee cost calculator<\/a>.<\/p>\n You should also consider consulting an accountant or business adviser to check your estimates are complete and correct, and the plan to employ is financially sound.<\/p>\n You\u2019ll need to have a clear description of the job before you can draft an employment agreement and advertise the position. The requirements must clearly relate to the job, your business or entry requirements for employee training you have in mind. Otherwise they may be considered discriminatory.<\/p>\n Written to be easily understood by your applicants, as a minimum a job description should contain:<\/p>\n You are legally required to have a written employment agreement, also called an employment contract, for any employee. This doesn\u2019t apply to interns, volunteers and contractors.<\/p>\n Collective employment agreements apply to union members, and are between the employer and a relevant union. There must be at least two employees and at least one employer involved. Your first employee will be the only employee at your workplace, so no relevant collective agreement will exist. The job will only be covered by a collective agreement if you choose to join an existing collective agreement with other employers.<\/p>\n To help you plan ahead, here\u2019s a brief introduction to the three scenarios as they apply to all workplaces.<\/p>\n Collective agreement and a union member<\/strong><\/p>\n If an employee is a member of a registered union, they will be covered by any relevant collective employment agreement at their workplace, which will be between the employer and the union. It can also include some individual terms that are not inconsistent with the collective agreement, such as flexible working hours based on transport needs or school holiday hours.<\/p>\n Collective agreement but not a union member<\/strong><\/p>\n If a there is a relevant collective employment agreement at a workplace but a new employee is not a union member, the collective employment agreement must be used for the first 30 days. After that, if the employee has not become a union member they can change to an individual employment agreement.<\/p>\n Individual agreement<\/strong><\/p>\n If a collective employment agreement does not apply, the employee and employer must negotiate and sign a written individual employment contract (agreement). Since an individual agreement is most likely when you\u2019re hiring your first employee, we\u2019ll go into that one in more detail here.<\/p>\n An individual employment agreement should include detailed information about:<\/p>\n Some of the above are mandatory and others are recommended by specialists. Having a detailed agreement helps you and your employee get off to a strong start and have something to refer to if concerns arise.<\/p>\n The business.govt.nz website has a handy employment agreement builder<\/a> that covers the above sections, and includes quick tips and common mistakes to avoid.<\/p>\n You could also check in with an employment lawyer, a small business HR\/employment relations company or a local business support group.<\/p>\n The best way to find and attract your ideal employee will often depend on the job and the amount of time and money you have to invest.\u00a0 Here are some options to consider.<\/p>\n Free ways to find applicants:<\/p>\n Paid job advertising opportunities include:<\/p>\n For help with writing your advertisement, take a look at free guides for advertisers on major online job sites like seek.co.nz<\/a> and Trade Me<\/a>. Check out current ads for similar roles to yours.<\/p>\n You don\u2019t have to interview all applicants. Using an application form can be a big help in drawing up an initial interview shortlist.<\/p>\n If you\u2019re expecting a lot of responses and won\u2019t have time to talk to them all, you might like to provide a contact email to \u2018request a job description and application form\u2019. This would allow you to quickly cover off most of the common questions, outline the process and timing you have in mind, and gather the information you need to begin selection.<\/p>\n It\u2019s essential to protect the privacy of anyone who shows interest or applies. Your application form could ask how they would like to be contacted. If they\u2019re not available, never leave a message with others. Anything you send to them should be marked as confidential. Don\u2019t contact their employer or anyone else without the applicant\u2019s permission. You must not share any information they provide unless you have their permission to do so. Even accidental mistakes around confidentiality can put you in breach of the Privacy Act.<\/p>\n Consistency and fairness are important. And don\u2019t forget that the goal is to let applicants show you their true potential. That means they need to feel relaxed, safe and respected. Here are some tips to get you started.<\/p>\n Once you have identified who could do the job and who best met the requirements in the job description, it\u2019s time to check at least one reference. This can be particularly valuable in confirming your decision and for managing your new employee.<\/p>\n When you\u2019re ready to make an offer to the successful applicant, let them know you\u2019d like to meet to present a formal offer and draft employment agreement.<\/p>\n At the meeting, provide a written offer letter and copy of the employment agreement. Let them know they have the right to seek independent advice before making any response and agree on how much time that can take.<\/p>\n Tell them that means they can reject the offer, accept the offer and employment agreement, or let you know if they\u2019d like to accept the offer but want to discuss changes to the proposed individual contract. You must consider and respond to any changes they suggest, but you don\u2019t have to accept them all.<\/p>\n If you reach agreement, you should both sign a final offer of employment and employment agreement. The final offer should probably include an acknowledgement from the employee that they were given the opportunity to seek independent advice before signing.<\/p>\n It\u2019s important to let applicants know they were unsuccessful and thank them for applying. Again, make sure you use an agreed contact method.<\/p>\n You must continue to maintain confidentiality for all applicants. If you\u2019d like to keep any information they provided, you must get their permission to do so and make every effort to keep it secure. Otherwise you can let them know you will destroy the information provided on a particular date, to safeguard their privacy, but are happy to return it to them if they let you know how they would like that done beforehand.<\/p>\n Before your first employee starts, you must register as an employer with Inland Revenue.<\/p>\n Your employee\u2019s first day will set the tone for your ongoing relationship, so put time into planning ahead and being available.<\/p>\n The first step should include a thorough health and safety briefing, evacuation procedures and the provision of any safety equipment. Provide a tour of facilities, such as bathroom and lunch area.\u00a0 Make sure they have emergency or absence contact details, and clarify their hours and break times.<\/p>\n Start them on manageable tasks, ask how confident they feel about doing them, provide any necessary training, and work alongside them to help and lead as required. Give them the opportunity to continue independently, but be readily available. Make time at the end of the day to debrief, check how they\u2019re feeling and thank them for their work.<\/p>\n For more information on becoming and employer, see:<\/p>\n When to hire your first employee The path to becoming<\/p>\n","protected":false},"author":3,"featured_media":772,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"content-type":"","footnotes":""},"categories":[6],"tags":[],"class_list":["post-771","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-starting-a-business"],"acf":[],"yoast_head":"\nHow to write a job description<\/h3>\n
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Understanding employment agreements<\/h2>\n
Collective vs individual employment agreements<\/h3>\n
How to write an individual employment agreement<\/h3>\n
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How to advertise for an employee<\/h3>\n
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How to choose your first employee from the applicants<\/h2>\n
Using an application form<\/h3>\n
Taking care with confidentiality<\/h3>\n
How to run applicant interviews<\/h3>\n
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How to make an offer of employment and reach agreement<\/h2>\n
How to let unsuccessful applicants know<\/h2>\n
Tips for starting your new employee<\/h2>\n
To learn more<\/h2>\n
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