Do you need to recruit to grow your small business, but don’t know the best way to do it?
Resource is a common problem for small business owners. Balancing working IN your business and ON your business can be a challenge. You are at full capacity and turning away work. You need help but don’t know where to start and worry about cash flow and committing to regular salary costs.
There are various recruitment options to help.
Options for when you don’t want to employ staff directly
Using Freelancers or associates
Work with self-employed individuals or companies on a freelance or associate basis. They can either provide work to you or liaise directly with your customers under your company name.
Using freelancers allows you to outsource work as and when you need to, rather than turning work away due to lack of resource.
Control your costs by pre-agreeing prices and factoring this into customer quotes. It’s also good practice to enter into a Service Level Agreement.
Using Casual or Agency Workers
These are people either on your books, or provided via an agency, who can work for you as and when you need them. They can also provide short term cover. You have no obligation to provide work, and they have no obligation to accept it.
It is good practice to enter into a Casual Worker or Agency Agreement. Notice periods are often not required and parting company is generally straightforward.
Options for employing staff directly
Zero hours contracts can be very useful if you have regular work, but variable hours. They allow you to keep flexibility whilst still benefiting from longer relationships.
If you need weekly help, but for only a few hours, use a part time contract.
Modern Apprenticeships are a cost-effective way of growing your team if you’re happy investing in training and support. You can arrange Apprenticeships through local colleges.
Employment contracts for Zero Hours and Apprentices are legally required within their first 8 weeks. If things don’t go as planned, notice periods will apply. If you need to end a contract, you’ll need to ensure you do so legally and fairly, following an appropriate procedure.
Using Freelancers and Associates – Advantages and Disadvantages
The advantages of using freelancers or associates include:
Ease of stopping and starting your relationship
The disadvantages include:
• Less control over how or when work is completed
• They may not be available when you need them
• They will likely specify their fees
• They may subcontract work out
• The relationship relies on trust that they do not poach your customers
Using Casual or Agency Workers – Advantages and Disadvantages
The advantages of employing casual and agency workers (also known as temporary workers) are:
• You have greater control over when and how work is carried out
• Sub contracting is unlikely to apply
• You can control the hourly rate
• You have greater oversight as work is generally carried out on your premises using your equipment
• You only need to employ them, and incur costs, when you’re busy
• Not turning work away allows you increase your turnover and keep your customers happy
The disadvantages of using casual or agency workers include:
• People not being available or letting you down at short notice
• Casual workers will require payroll as hours are claimed via timesheets
• Fees will apply for agency workers
• Individuals will have basic employment rights as they have worker status
• Additional employment rights become effective for workers after 12 continuous weeks
Employing Staff Directly – Advantages and Disadvantages
The advantages of employing staff are:
• You know people will be available
• You control how and when work is carried out
• You specify the hourly rate
• You can build long term relationships with your team and they help you grow your business
However, any employed staff will have full employment rights, even if employed on a flexible basis. You will need payroll and will also need to budget for a regular salary commitment.
How much do you need to pay people?
You will need to factor in freelancer and associate fees when pricing your services. OR you will need to decide what you can afford to enable you to free up time to focus on other areas of your business.
You will need to pay the National Living Wage or National Minimum Wage to staff, whether casual, agency or employed.
When reaching thresholds, you will need to pay Employers Income Tax and National Insurance. Staff may also be entitled to receive payments such as statutory sick pay and maternity pay etc.
Staff with worker and employee status are entitled to receive paid pro rata statutory annual leave for all hours worked up to your full time equivalent.
Dependant on earnings, some staff may be entitled to a workplace pension under Auto Enrolment rules.
For further advice on how to grow your business contact Concilium HR today on 07885 370054 or email firstname.lastname@example.org