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Recently I was chatting to an acquaintance who asked if I knew anything about the treatment of holiday pay for part-time workers.
My initial question to them was 'what does your employment contract state?'. The response was that there was no employment contract in place. Cue a look of shock and horror on my face. What on earth is that employer thinking??????
I'm not going to discuss the reckless and illegal way that the employer is running their business (a few more questions shed a lot of light on a number of illegal practices) but I will say that this Irish based employer, if inspected or audited by the Revenue, WRC (Workplace Relations Commission), or the HSA (Health and Safety Authority), would be facing closure, legal charges and financial penalties.
My advice to anyone running a business, of any size is to get the basics right from the start. As soon as you start employing people you become responsible for them in many ways. Don't let shoddy or lazy work practices find you in court facing charges!
It sounds dull, but I promise you that investing the time to do things right from the early days will help as you continue to grow. You will also avoid unnecessary risks that could closedown your business.
I've listed below the 9 things I think you need before you reach 9 staff:
1.Compliant employment contracts
Every country has its own legislation around employment contracts. In Ireland an employer is required to give all staff, within 5 days, an initial statement of terms and conditions, then following up within 30 days with the remainder of the terms and conditions. (You can access a simple guide from the Citizens Information here)
An employment contract needs to set out the terms of employment, such as job title, salary, and working hours. Having a clear employment contract in place for each employee will avoid confusion and potential disputes later on.
2.Payroll and Taxation
When you start employing staff you have a number of obligations to ensure that your employees get paid correctly and in a timely way. You also have obligations to pay employer costs and deduct income tax and relevant social security payments.
Payroll and tax in any country tends to be complex. If this isn't your strong point as a founder then consider outsourcing to reputable service providers.
And whatever you do, please do not deals to pay cash in hand or 'off the books'. I can assure you that this will return to haunt you.
3.Health and Safety
As an employer, you have a legal obligation to provide a safe working environment for your employees.
Whether your staff work remotely from home, or onsite in a factory, shop, office or other workplace, your employer obligations are the same. You need to know that they are working safely and understand all the workplace risks and how to mitigate these.
You'll need to start by conducting a risk assessment and then creating a health and safety policy (including providing any required training) to ensure compliance with regulations and to protect your employees.
I hate to use scare tactics, but the worst case scenario of having an employee severely injured at work is not something anybody wants to see happen.
4.Employee Handbook
An employee handbook is used to set out the rules and expectations for employees. It needs to provide clarity on policies such as holiday entitlements, sick leave, disciplinary procedures, and grievance procedures.
It doesn't need to be dull, but it does need to be useful, and easy to read and understand. You can write it in your own company tone and style and incorporate visuals and graphic design. (If you're looking for inspiration check out Open Org's online handbook here)
Your employee handbook is the document that will help managers and staff know what is expected of them and ensure people are treated equitably and fairly.
5.Recruitment
It is very tempting for a smaller company, or start-up, to hire without any structured process. After all, implementing a structured process takes more time than a quick chat over a coffee. But doing it well from the start will save you time and money in the longer term.
As a smaller enterprise you can be innovative and open-minded on how you recruit, whilst still staying on the right side of the law.
Creating a structure could include:
Clear role descriptions for any new hires (don't advertise unless you know what you need)
Considerations for more flexible work routines (e.g. part-time/remote). Not every role needs to be 40 hours, 9-5, Monday to Friday!!!
Avoid discriminatory language in role descriptions and job adverts (there are a lot of free tools, including AI tools, that will help you do this. Have a quick read of this short article from Monster.ie)
Consistent interview format for all candidates
How you will inform rejected candidates
Process of hiring (sending contracts, arranging any kit/tools/equipment)
Process of onboarding
6.Performance Management
In a smaller team everyone counts. You are unlikely to have the resources to have hangers-on or people not pulling their weight. Hopefully you have great people who really deliver what is needed in a positive and collaborative way.
Making sure you have a performance management process in place will enable you to identify and recognise great performance, give feedback, and develop your staff effectively.
The approach of an annual performance review as a mechanism for improving performance is outdated. Having more frequent performance conversations will ensure any challenges are addressed fast and that positive outcomes are celebrated and replicated.
It doesn't have to be a complex process. Recent workplace studies suggest that regular structured 1:1s can have a significant and positive impact on managing performance. Consider what works best for you and your staff and create a simple process that everyone can benefit from.
7.Training and Development
Having a lack of challenge at work impacts on staff engagement levels and subsequently performance levels.
Hiring amazing people doesn't mean that they don't need to continue to grow and develop.
Consider how your company can help staff continue to grow and develop their skills and experiences. This doesn't mean that you need to spend money on formal, in-person, classroom-style workshops. In this day and age there is a wealth of learning to be had either entirely online at the learner's pace, virtually with a real person delivering remotely, via webinars, seminars, network events and even employees learning from each other.
If you do have funds available for formal learning then consider this a positive investment in the growth of your company and investigate the best solutions.
A commitment to ongoing training and development will be appreciated by every one of your team.
8.Diversity, Equity and Inclusion
This is not me being woke. Genuinely, if you don't consider diversity, equity and inclusion (DEI) at the start of your business then you will face huge issues fast.
Your company's approach to DEI needs to underpin everything you do as an employer. It will enable you to hire well, build great teams, and create an engaged and positive workforce that will enable you to run a successful business.
Remember that diversity is not just race or gender. It includes, amongst other things, ethnicity, cultural and social background, age, physical abilities, and neurodiversity. Diversity is especially important to consider when hiring (to avoid discrimination) and building out teams (to foster innovation and creativity).
Creating equity in your approach to pay, benefits, policies will ensure each person on your team feels valued and treated fairly.
Keeping inclusion at the forefront will, amongst other benefits, ensure your employee communications are transparent and easy to understand. Your company, and the people within it, will grow more connected from listening and hearing differing opinions and view points and the sense of trust will build. (Read here on how connectedness contributes to high performing teams).
You can read my 5 steps to creating a DEI policy here
9.Exit strategy
Sometimes great people leave great companies. Making sure you have a structured exit plan for staff will help foster trust and a sense of transparency within your business.
Whether an employee is leaving by choice or for other reasons you need to have a clear process to follow that includes:
A checklist of action items (e.g. close payroll/end benefits/collect equipment)
Who will communicate the exit to the rest of the team, as well as how and when
How is the workload going to be distributed before a replacement is hired?
How is the person's last day/week/month going to be handled?
Creating a simple exit strategy will ensure there is no miscommunication and rumour around the decisions of someone leaving the company.
Getting these nine things in place before you reach nine staff will ensure all your team is working towards the same goals in a safe and productive environment and helping you avoid HR issues down the line.
As a freelance HR Consultant, I can help you implement these practices and provide ongoing support as your business grows. Contact me on alex@alexkotsos.com.
N.B. 'Trust' photo courtesy of Bernard Hermant on Unsplash
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