Recruiting your first employee: a practical guide for small employers

What this guide covers

This is the whole process in order, from deciding you need someone to the end of their probation, for a small employer taking on a first employee, or the first in a while. At each step it says what to decide and what to have in writing. Four shorter guides, linked at the end, go into more detail on interviews, offers, right to work checks and the first day.

It covers England, Wales and Scotland. Most of the rules are the same in all three, and we say where Scotland differs. Northern Ireland has its own employment and equality law and isn't covered.

1. Decide what the job is

Start with why you need someone. What work isn't getting done, or what would you do with the time back? The answer shapes the job, the hours and the budget, and it stops the role drifting while you recruit.

Then write the role down:

• the main duties, in a few lines, as they'll really be
• the essential criteria, meaning what someone must have to do the job from the start, and a few desirable ones
• the hours, the working pattern, and where the work is done, including whether any of it can be flexible or from home
• whether it's permanent, fixed-term, or for a set piece of work

Keep the essential list short and tied to the work. You'll use the same list to shortlist, interview and decide, so every item on it should be one you can explain.

Employee, worker or self-employed

Be clear what kind of arrangement you're offering. It decides what rights the person has, and how tax and National Insurance are paid on what they earn.

Employment status isn't settled by what you call the arrangement, or by the contract on its own. It depends on how the work is really done: for example, how much say you have over how and when they work, whether they have to do it personally, and whether you're expected to offer work and they're expected to take it. Someone described as self-employed can, in law, turn out to be a worker or an employee. The tests for tax and for employment rights are similar but not identical.

This guide assumes you want an employee, and it's simplest to set it up that way from the start. If you're considering a freelance or casual arrangement instead, read the GOV.UK employment status guidance, and take advice if it isn't clear-cut.

Work out what it will really cost

Set the pay first. It must be at least the National Minimum Wage or National Living Wage for the person's age, for every hour they work, and the rates usually rise each April. Check it still clears the minimum once you count any time you require that isn't paid, such as training or opening up, and anything you deduct or ask them to pay for, such as a uniform.

Then budget for the whole cost of employing them, not only the salary:

• employer National Insurance on earnings above a threshold. Many small employers can claim the Employment Allowance to reduce it
• workplace pension contributions: at least 3% of qualifying earnings from you, if they're enrolled
• paid holiday: 5.6 weeks a year for someone working a full week, and pro rata for part-time
• statutory sick pay when they're off sick, and statutory family pay such as maternity pay, most of which you can usually reclaim
• employers' liability insurance, which most employers need from the day the first person starts
• equipment, training, payroll software or a bureau, and your own time recruiting and training

The true cost calculator puts the main figures together. Agree the budget, and anyone who has to sign it off, before you advertise. Changing the pay or hours after an offer is much harder than getting them right first.

2. Write an accurate, inclusive advert

Turn the role into a job description and a person specification, and keep both honest. Candidates rely on them, and you'll assess everyone against the same criteria later. A good advert says:

• what the job involves day to day, and where it's based
• the pay, or a realistic range, and the hours and working pattern
• the essential criteria, written as what the job needs, not as the kind of person you picture
• how to apply, the closing date, and roughly when interviews will be
• that you'll adjust the process for anyone who needs it, and who to contact

Putting the pay and hours in the advert isn't a legal requirement in Great Britain, but it saves time on both sides and tends to bring more suitable applicants.

Watch for requirements and wording that screen people out without a reason the job needs. That can be indirect discrimination unless you can justify it:

• age-coded words such as "young", "energetic", "recent graduate" or "digital native", or a number of years' experience when what you need is a skill
• "native English speaker" when you mean the level of spoken or written English the job needs
• a driving licence, a degree or full-time hours, when the job doesn't really need them

Use plain words and a readable layout, and make sure the way to apply works for someone using assistive technology. Advertise where the people you want will see it. Relying only on word of mouth tends to narrow the field.

3. Shortlist and interview the same way for everyone

Decide how you'll assess people before you read the applications. Shortlist against the essential criteria, and note briefly why each person was or wasn't taken forward. Then:

• ask every candidate the same core questions, linked to the criteria, and follow up on what they say
• ask for real examples of what they've done, and score the evidence against each criterion straight after
• if you can, have two people interview and score separately before comparing
• if you set a task or test, give everyone the same one, and make sure it tests something the job needs

Ask everyone you shortlist whether they need any adjustments for the interview or a test, such as extra time, step-free access or the questions in writing. You have a duty to make reasonable adjustments for disabled candidates, and you can ask what someone needs without asking why.

Health and disability questions are restricted before an offer. Section 60 of the Equality Act 2010 means that, in general, you mustn't ask about a candidate's health or disability until you've offered them the job. That includes the application form, the interview and questions to referees. There are narrow exceptions, such as asking about adjustments for the process or whether they can do something essential to the job. The interview questions guide sets out what you can and can't ask.

Keep the scoring sheets and your notes. Candidates can bring a discrimination claim without ever having worked for you, and they can ask to see what you wrote about them. Record the evidence they gave, keep it for a set period after you've told unsuccessful candidates, then delete it.

Tell candidates how you'll use their information when they apply, usually in a short privacy notice for applicants. Collect only what you need to decide, and keep it secure.

4. Make a written, conditional offer

Once you've chosen, put the offer in writing, even if you've rung them first. An accepted offer can form a contract, so say plainly what it depends on. The offer should set out:

• the job, pay, hours, place of work and proposed start date
• each condition: for example references you're satisfied with, proof of the right to work, a qualification or registration the job needs, and a criminal record check or health assessment only where the role calls for it
• a date to accept by, and when you expect the checks to be done
• whether they should wait for the conditions to be met before handing in their notice

If a check raises something, don't withdraw automatically. Find out the facts, give the candidate a chance to explain, and decide on what matters for this role. The conditional offers guide takes you through it.

Pre-employment checks: proportionate, and the same for everyone

Only carry out checks this role needs, and do the same ones for everyone you offer it to. Tell the candidate what you'll check and why.

• References: decide who you'll ask and what about, such as dates, role and reliability. Don't ask about health or sickness absence before the offer. Some employers only confirm dates and job title, so don't read too much into a short reference.
• Qualifications and registrations: check the ones the job needs, with the issuing body or register where you can.
• Health: only after the offer, only where it's relevant to the job, and with reasonable adjustments in mind if it shows a disability.

Criminal records need more care. Don't ask every candidate about them as a matter of course. Decide first whether the role needs a check, and at what level.

• England and Wales: a basic DBS check shows unspent convictions and can be requested for any role, but you should still be able to explain why you need it. Standard and enhanced checks are only for roles that are eligible under the rules, such as many roles working with children or adults who need care, and some regulated professions. Use the GOV.UK eligibility guidance to confirm the role and the right level before you ask for one.
• Scotland: checks are through Disclosure Scotland, which has its own levels, including the PVG scheme for work with children and protected adults, and its own rules on spent convictions.
• Spent convictions: unless the role is exempt, candidates don't have to tell you about them, and you can't refuse someone a job because of one.

Keep criminal record information only as long as you need it, separately and securely, and say in your privacy information how you handle it.

5. Check the right to work before they start

You must check that someone has the right to work in the UK before their employment starts. A correct check, done in time, gives you a statutory excuse if it later turns out they didn't have the right to work. Check everyone the same way, whatever their name, accent or nationality. Checking only people you think might not be British risks a race discrimination claim.

There are three ways to check, depending on the person's documents: a manual check of original documents, a Home Office online check, or a check through a certified digital identity service provider for British and Irish citizens with a valid passport.

A share code isn't a check on its own. You enter it, with their date of birth, on the Home Office online service, make sure the photo is of the person applying (in person or on a live video call), and keep a copy of the result with the date you checked.

If their permission to work is time-limited, put a follow-up check in the diary before it ends. If the person needs a visa to do the job, you'd need a sponsor licence first, which takes time and is outside this guide. The right to work guide covers the methods, follow-up checks and what to keep.

6. Get ready for day one

Most of the setting up happens before the first day, so leave yourself a few weeks.

• Written statement: every employee and worker must have a written statement of employment particulars on or before their first day. It sets out the main terms, including pay, hours, holiday, place of work, notice and any probation. A few details can follow within two months.
• Payroll: register as an employer with HMRC before the first payday. You can't register more than 2 months before you start paying people, and the reference can take a while to arrive. Ask the new starter for their P45 or a starter checklist, run their pay through PAYE, and give an itemised payslip every pay day.
• Pension: your automatic enrolment duties start on the day your first employee starts. Assess them, enrol them if they're eligible, write to them about it, and complete your declaration of compliance with The Pensions Regulator, even if nobody needs enrolling.
• Insurance: put employers' liability insurance in place if you need it, and display the certificate where employees can see it, which can be online.
• Privacy: give them an employee privacy notice saying what you hold about them, why and for how long.
• Health and safety: assess the risks in their work, tell them about the risks and how they're controlled, and display the health and safety law poster or give them the leaflet. Once you have five or more employees, your risk assessment and health and safety policy must be written down.
• Equipment and access: workspace, tools, any uniform or protective equipment, keys and logins, ready before they arrive.

Tell them before they arrive where to go, when, and who to ask for. On the day, cover fire and safety procedures, how to report sickness, how and when they're paid, and who to go to with questions. The new starter guide lists what the written statement must contain.

7. The first weeks and probation

A probation period isn't a legal requirement, but most employers use one. It only helps if both sides know what's being measured.

1. Agree a few clear objectives in the first week, linked to the job description.
2. Plan the training they need, and who will give it.
3. Meet regularly, weekly at first, and give feedback as you go, so nothing at the review is a surprise.
4. If there's a concern, raise it early, say what needs to improve, and offer support.
5. Hold a fair review at the end of the period and confirm the outcome in writing.

Probation doesn't switch off employment rights. Discrimination, and dismissal for some automatically unfair reasons, need no qualifying service. From 1 January 2027, the qualifying period for ordinary unfair dismissal is due to fall to six months, which for many employers will fall at or near the end of probation.

Common mistakes

• Hiring before working out the full cost, then trying to cut the hours or pay after the offer.
• Calling someone self-employed when the work is really done like a job.
• Asking about health or sickness absence before the offer, including on the application form or to referees.
• Asking each candidate different questions, then deciding on gut feel with no notes.
• Making an offer by phone with no written conditions, then trying to withdraw it.
• Leaving the right to work check until the first morning, or treating a share code as the check.
• Asking for a criminal record check the role isn't eligible for, or asking every candidate about convictions.
• Starting someone with no written statement, no payroll set up and no pension assessment.
• Treating probation as a formality, with no objectives and no conversation until the last week.

Your hiring checklist

1. Define the role, why you need it and the full budget, and get it approved.
2. Write the job description and the essential and desirable criteria.
3. Write and place an accurate, inclusive advert, with the pay, hours and how to ask for adjustments.
4. Plan a consistent shortlist and interview: the same criteria, the same core questions and a scoring sheet.
5. Record how you shortlisted, scored and decided, and why.
6. Make a written offer, with each condition and a date to accept by.
7. Complete the right to work check before they start, and diarise any follow-up.
8. Complete references and any other checks the role needs, proportionately and the same for everyone.
9. Give the written statement of employment particulars on or before day one.
10. Set up payroll, assess them for the pension, give privacy information and cover health and safety.
11. Plan the induction, and agree probation objectives in the first week.

When to get advice

This is general guidance, not legal advice. Take advice before you go ahead if the situation is unusual or higher risk: for example sponsoring someone for a visa, a role working with children or adults who need care, a check that raises something serious, withdrawing an accepted offer, or an arrangement where you're not sure whether the person is an employee.