Step by step – your guide to hiring your first employee

Here’s our step-by-step guide for successfully hiring your first employee.

Make sure you line up the items listed in the What You’ll Need section and follow the recommended actions in the order they’re set out.

What you’ll need

• a vacancy for an employee (rather than any other variety of hired help)
• a completed registration with the Revenue as an employer
• a job description
• a plan for conducting a search/advertising the role (including any associated costs)
• an application form (and possibly an assessment task that you might want the candidate to undertake as part of your decision-making process)
• a job candidates’ privacy notice
• offer of employment letter
• an employment contract suitable for the role
• an employee, contractors and other workers’ privacy notice
• a payroll system
• a staff handbook – your go-to resource for many of the additional key details, rules and responsibilities governing your relationship with your employee
• key HR documentation, like a sickness self-certification form and a new starter form, or you might prefer to adopt an appropriate HR software solution
• IT equipment, related software, maybe basic stationery (and somewhere for the employee to work, if applicable)

Identifying the right help

Before we get started, are you sure you need an employee?

It’s not a silly question, we promise!

Employees can absolutely bring stability to your business and the right person can be invaluable.

But they come at a financial cost (which, in total, may equate to more than you might pay for other forms of help), and they also affect your legal and tax obligations (all explored below).

They’re typically also a more longer-term commitment for your business than other types of hire.

If you’ve made your mind up and you know it’s an employee that you need, skip the next section and let’s get you employee ready.

Can you afford an employee?

Let’s take a look at what financial and administrative costs are involved in taking on an employee.

You might want to set this out in a spreadsheet tally (we did this when we first started hiring people and it really helped).

Non-salary related costs – there are several things to cover in addition to salary.

These include Social Insurance and pension contributions, employer’s liability insurance, IT equipment, sick and holiday pay, and office space.

Don’t forget any associated software and licensing costs too, like those you’ll need to pay to cover email and other document management costs, or more skills-specific products like graphic design, social media management, data and analytics or payroll and HR management software.

And for more specialist employees, you may also need to cover fees for any professional training and/or annual certification renewal requirements.

Tax – so, as well as paying the employee’s salary, the employer’s also responsible for paying their Social Insurance contributions (PRSI).

PRSI is a mandatory legal obligation on employers and the money that’s collected is used to fund state benefits.

PRSI is different from income tax, which the employee pays themselves.

Payroll and associated administrative costs – employers are responsible for deducting PRSI contributions and income tax from employees’ wages and paying them to the Revenue each month, before the remainder of the monthly salary hits the employee’s bank account.

You can either manage these payment obligations yourself, ideally using payroll software, or you can pay a payroll provider or accountant to do it for you.

We’ve got more information about how to go about setting this all up later on.

Employer’s liability insurance – though you are not legally required to have employer’s liability insurance it is worth considering, even if you only have 1 employee! This insurance protects you against the cost of employee claims for compensation arising from illness or injury suffered by that employee while working for you.

Salary – and of course, there’s the salary.

You may already have an idea of what salary range you want to offer.

Familiarise yourself with what the going rate is in the market (and your location) for an employee with the skill sets you require.

Working time – with the health and safety of employees in mind, Irish law now contains working time regulations so that they’re not working too many hours.

So, balancing out these costs by requiring employees to work longer hours may not be a popular or viable option!

So, you still want an employee… let’s get employee ready!

Search for the ideal candidate

A good starting point when starting your search for the right person is listing the main tasks required for the job and the key skills you’ll be looking for in the successful candidate.

Try not to go too overboard as this can look a bit off-putting!

Finding your candidates – get help or go it alone?

This can be as simple as sending a social media post or uploading/publishing an advert to where you think your ideal employees are likely to look.

Lots of sites like Upwork or Talent.io offer affordable ways to source great candidates who are already open to considering new opportunities and have posted their own search criteria for you to consider.

Or you could use the more traditional approach of engaging an agency to help you find your candidates.

When you come to advertise your role, your job description will help prospective candidates know whether it could be a good fit.

And you may want to include the salary range you’ve got in mind in your advert, as this not only indicates the seniority of the role but also whether it’s within the ballpark that your prospective candidate is looking for.

It’s also proof that you’re a responsible employer and pay, at the very least, the minimum legal requirements.

Shortlisting candidates can be a time-consuming task, especially if you’re managing the search process yourself.

It’s easy to overlook just how much time the recruitment process takes up.

You’ll have to sift through all of the applications yourself for a start…which may negate the benefit of saving money on engaging someone else to help you find the right people.

So, outsourcing to a recruitment platform or an agency may be useful and worth the fee.

A good recruitment platform or agency should also have an excellent source of candidates and know how to find them.

They’ll usually also help you to craft a compelling advert, and agents especially can act as an experienced promoter for you too – making the whole process a lot quicker and simpler.

Be sure to agree on their fee upfront though, and don’t be shy about negotiating it.

Do have a read of their terms of engagement too – usually, you’ll be signing up to theirs.

There may be provisions contained in them that you also need to be aware of, like when their fee must be paid, whether there are any extra costs that they may charge in relation to the services that they could offer you and their confidentiality obligations to you (including how they may talk about their relationship with you and any of your hiring or strategic activities, to others).

Your job candidate privacy notice

However you choose to find your candidates, don’t forget to include your job candidate’s privacy notice as part of your advertised opportunity (you may want to host this on a careers or other section of your website, so it’s always available and easy to signpost).

You’ll need this from the outset to comply with GDPR.

The job candidate’s privacy notice tells the candidate how you collect information about them when they decide to put themselves forward for consideration in response to your advertised opportunity, and how you use that information during the recruitment process and after, they are offered the job, if they’re successful.

(Once employed, they should be covered by your employee, contractors and other workers privacy notice.)

Hold the interview

Someone who looks really good on paper may not be so spot on when you meet them in person.

And someone who you weren’t so sure about on paper could knock your socks off when you meet them face to face.

To help you decide, it can sometimes be useful to ask the candidate(s) to undertake a task which would be essential to the role in advance of coming to the interview.

For example, writing a press release, talking on the phone to a customer, hosting a short training session for team members, presenting an idea to the team for business improvement, describing how they might approach a problem within your business that you have recently solved.

Whatever you choose, using this method can provide you with a reasonable demonstration of their skills, making the interview more about their cultural fit and tuning down some of the risk that always involved in hiring someone else.

Rapid fire rounds

You might want to consider a ‘rapid-fire’ round ahead of inviting candidates to a more typical interview meeting.

Lots of businesses now include an initial 15–30-minute phone or video call with a candidate as part of their shortlist process.

This is especially great for customer-facing and people-engagement roles.

Block out some time and try to do these all in one go so you can keep each candidate front of mind as you decide who to take through to the next stage.

Keep these initial interactions light and focused on the personality, attitude and general engagement of the candidate.

Pay special attention to what the candidate asks you about your business and the role and how they relate that to their own suitability for it.

Find out all you need to know about how to run a great interview process in our guide to good interviews including the questions never to ask!

Areas to avoid at all costs are questions relating to certain personal characteristics such as age, disability, sex, sexual orientation, marital status, pregnancy and maternity, or religion or belief.

Our guide about equal opportunities (coming soon) will also help you to ensure you don’t get caught out inadvertently.

Finally, it’s worth remembering that you are as much on interview as the candidates that you meet.

It’s not unusual for employees and interviewees to post reviews of businesses on sites like Glass Door, and those posts can have a material reputational impact that runs beyond your ability to attract affordable talent into your business in the future.

Running a great interview process is just as important as running a good advertising or PR campaign.

Make an offer

So hopefully, you’ve found the person you were looking for, you’ve verbally offered them the job, and you’ve agreed on a salary.

It’s time to firm things up in in writing.

Here’s our offer of employment letter so you can formally offer them the job.

While you’re offering the job to your chosen candidate, you should make clear that this is subject to some basic checks returning a positive result (including satisfactory references and confirmation they have the right to work in Ireland).

You’ll find mention of your intention to carry out these checks in our template offer letter.

It’s always good practice to seek references.

Send the contract

Alongside the offer of employment letter, you’ll typically send your new recruit a draft employment contract containing all the key terms of their relationship with your business.

By law, employees can actually be already employed under a contract of employment, whether you’ve put anything in writing or not.

But we strongly recommend putting a written contract into place so there’s no ambiguity about the basis on which you and the employee will work together (especially when it comes to ensuring that you own and protect your IP, the confidentiality of your trade secrets, whether a departing employee can go and work for one of your competitors, whether you have to pay the employee if they get sick or injured and what rights you have if they start to behave badly, for example).

Also, you need to have an employment contract in place because you are required to provide certain basic terms of employment (such as pay and benefits) in an employment contract within 5 days of employment.

You’ll find our 5-day Statement of employment template useful for this.

We have several employment contracts for you to choose from, depending on what your employee will be doing:

Employment contract that’s appropriate for most staff working for you

Employment contract suitable for managers and more senior roles

Employment contract for directors (also called a director’s service agreement)

Our contract templates include all the terms you need from more obvious ones like salary, hours, and holiday entitlement, to how the employee will be expected to manage confidential and competitively sensitive information, what would happen if they were off sick for a prolonged period of time, or if they make a complaint.

The key differences between the first employment contract and the more senior one is that the latter will contain more detail, typically around benefits, rewards and incentives, duties and responsibilities (e.g. they’ll probably be responsible for managing other people) and restrictions that kick in when they want to leave (restrictive covenants), since they may be in a stronger position to persuade other members of staff to leave your business and follow them.

They may also know more confidential and competitively sensitive information about your business that could benefit a competitor or help that employee to become a competitor.

If you’re interested in finding out more about restrictive covenants our guide about restrictive covenants tells you all you need to know.

Once you and your employee are happy with everything in the contract, you can finalise this and get it signed.

And remember, these contracts of employment are distinct from other contracts for other types of staff – for example, contracts for fixed-term workers or interns, or self-employed contractors, or non-executive directors.

The differences between all the different types of help you can recruit, and the corresponding contracts are all contained in our guide about the different types of help you can bring on board (coming soon)

A written statement

Irrespective of whether there’s a written contract of employment, employees are entitled by law to be given a written statement setting out the main particulars of their employment within 5 days of employment.

While you can send a written statement of employment as a separate document to your new employee, we strongly recommend that you include it as part of the employment contract.

The 5-day statement that you must provide to the employee includes: the names of the parties to the employment contract, the address of the employer, the expected duration of the contract, the method of calculating pay (e.g. weekly, fortnightly, monthly), and working hours.

And by law, you must give this to your employee within the first 5 days the employee starts work.

Employers must give employees and workers a wider written statement within 2 months of the start of employment.

This must include information about:

• pensions and pension schemes;
• job description
• disciplinary and grievance procedures.

Again, the good news is that our template employment contracts contain all the legal requirements for a written statement so there’s no need to provide a written statement in addition to the employment contract.

These days, most employees won’t be happy to start a job without a written contract having been provided to them beforehand.

Get your paperwork and admin sorted

This is what you’ll need to do:

• first of all, register with the Revenue as an employer. Revenue have a guide about registering as an employer. It doesn’t normally take that long for Revenue to get you set up, usually only around 5 days.

• employers are responsible for deducting income tax and social insurance contributions (PRSI) from employees’ wages and paying them to Revenue each month. PAYE (Pay-as-you-earn) is Revenue’s system for collecting this. So, once you’ve registered with the Revenue for PAYE, you’ll need to set up a PAYE payroll system. You can do this yourself using payroll software or you can pay a payroll provider or an accountant to do it for you.

Remember to keep full records of what you pay and collect.

If you don’t keep full records, Revenue may estimate what you have to pay and charge you a penalty.

You can find here more information from the Revenue about keeping good records.

Make sure you pay the amounts due to Revenue on time too, and that you use the right reference number that they give to you.

How to create a staff handbook

And finally, we highly recommend having a staff handbook.

This will be your go-to resource for all details, rules and responsibilities governing your relationship with your employee, that employee’s relationship with the employees who may follow.

It covers everything from providing flexibility in the workplace to handling performance and knowing what to do if things don’t go to plan… it’s all in there, including all the policies you’ll need.

Check you’ve completed all steps

Well done for getting this far!

As a final sense-check, we’ve created a handy checklist below so you can check that you’ve done everything you need to do.

Make me Employee Ready

Welcome your newbie

So, they’re here!

After all the time and effort you’ve put in to finding your ideal person, you’ll want to create a great first impression so that they feel at ease and welcome.

You’ll want your new recruit to feel part of the team and at home in their new environment as quickly as possible so it’s a good idea to get your ducks in a row before they arrive.

For example, before they arrive you may need to sort out some practicalities such as:

• sorting out their IT equipment/email configuration and logins etc and help them with set up on their first day; and
• ensuring they have their ID badge and/or pass is ready so they can enter and exit the building.

And you may want to have a plan for their first few days including making time to show them around their new place of work and introducing them to other team members.

This can all be very time-consuming – especially when you’re super busy yourself.

But it’s worth the investment to create the best possible impression and ensure that everything gets off on the right foot.

Your new employee will very much appreciate your efforts, and the reward for you is they’ll be able to get going with their duties a whole lot faster.

Don’t forget about the induction!

For a working relationship to be set up for success, it needs to get off to a strong start – and that’s where the induction period is so important.

From the way you welcome your employee on their first day to the way you check on their progress over the course of their first few weeks on the job, you can make a real impact, from the way your new team member feels about the role to the quality of the work they produce.

Take a look at our guide on probation periods as it is a very useful tool in making sure everything is working out as both you and your employee expected in the few first months to make sure your employee gets the best start possible.

And the induction checklist that we mentioned earlier will come in very handy for ensuring that you don’t overlook anything helpful (or legally vital!), as well.

Induction Checklist

Keeping one step ahead

Complying with your legal obligations as an employer

Employees have several statutory rights.

Here’s our employment guide to help you understand and implement these rights in case you need any of them in the future:

Employment Guide