Owners of small businesses could be forgiven for not wanting to employ people. Newspapers love publishing headlines of record employment tribunal pay-outs and there is a plethora of articles on the internet about the potential pitfalls of managing people, and the costs of getting it wrong. But it doesn’t have to be like that.

When we formed PlusHR back in 2006, we were equally hesitant about employing people – yes, an HR company not wanting to have employees.. However, seven years later we employ 18 people and to this date, we have not encountered any significant issues with our team, nor have we met legal difficulties. This is not because we are HR experts, but because we have followed five golden rules that have served us well, right from the start.

1. Hire values over skills and experience
When hiring new employees, look for people who share your personal and company values, rather than focusing purely on skills and experience. You can train a person to give them skills and experience, but it’s very difficult to change their mindset. At PlusHR, we look for people who have a genuine customer service mentality – those who will go the extra mile to do a great job and make our customers happy. We then develop their HR skills over time.

2. Cover the essential legal requirements
Like most things in business, there are some basic legal essentials that you need to make sure you have covered off. First, you need to make sure you have checked someone’s right to work in the UK. Second, you need to ensure you have given them a written statement of terms and conditions – an employment contract – within two months of joining. Third,, you’ll need to have a few key employment policies in place. After that, it’s a case of allowing them to take holiday each year to the minimum required statutory level, paying them statutory sick pay when they are off sick, and ensuring their salary is not less than the minimum wage. Some types of business may have other legal requirements to adhere to, so if in doubt, check. But these are the key things to get right from day one for most small businesses.

3. Communicate openly and regularly
The best way to avoid employment issues at work is to keep your team happy and motivated. And the best way to do this is to communicate freely with them. Keep them up-to-date on the strategy and plans of the company, how you are performing financially – whether good or bad – and inform them of new customer wins and marketing initiatives. Doing this on an ongoing basis engenders commitment, engagement and enables you to have adult conversations if tough decisions have to be made.

4. Deal with performance issues promptly
No matter how good you are at managing people, you will likely encounter issues with an employee’s performance at some point. The key here is speaking to the individual as soon as the issue becomes apparent. The longer you leave it, the harder it will be to resolve and you will start to become frustrated yourself, which can make things worse.
Additionally, find out the root cause of the problem rather than just focusing on the symptoms – ask whether it is due to personal problems, lack of knowledge or training, not feeling recognised, etc. A good employee does not start under-performing or making mistakes for no reason, so find out why and agree a joint action plan to address it.

5. Know when to seek help
We can’t all be experts at everything. Managing people successfully requires different skills and knowledge at different times. Rules 1-4 will stand you in good stead for most of the time, but there will be occasions when more specialist knowledge is needed to deal with more complex situations, and that’s the time to ask for help. At PlusHR, I’ve sought help over the years on issues such as adding restrictive covenants to an employment contract, how to manage internal re-structures and how to undertake background checks for new recruits in key roles. Luckily I have my own internal team of HR experts to advise me, but for those who don’t, investing a little money in getting some pro-active HR advice when you need it will save time, money and heartache later on.

“Feel the fear and do it anyway”
Employing people can be a daunting prospect for small business, but don’t let the fear of getting things wrong hold you back. Stick to these five golden rules and you’ll be able to successfully grow your team and your business, and still be able to sleep at night.

New HR Videos