16/07/2012

Margery McBain, MD of Gravitate HR

Starting your own business is a very exciting time, with lots to do and think about. Usually the main focus is on developing your product or service and selling it, which means that some of the less obvious tasks, such as engaging positively with your new employees, can be put on the backburner. However if this happens, it will be a decision that will come back to haunt you as custom and practice forms from the very first day, and if you have not encouraged and influenced your team to meet the needs of the business then you could be storing up bad habits that are hard to change later on.

It’s very easy to get carried away in the excitement and frenzy of new business activity and to develop casual and informal relationships which is not a problem when all is going well with the business, but later on, if life becomes more complex or complicated these informal relationships can become unsupportive and even detrimental to your business.

So to avoid any employee pitfalls, you should set out your employment strategy to include:

Recruitment — Think about what you need to do to find people with the skills, experience and motivation to help you run your business. You may have plenty contacts and people that you already know, you might need to advertise or contract an agency to work on your behalf. Whichever method, you are best advised to be very clear about what job needs to be done — write it down and think through the skills and experience the person will need to have to be able to competently carry out the tasks and responsibilities. This sounds very obvious but many people employ all the wrong people for all the wrong reasons and it can cost the business in lost revenue, and your time, to end the relationship. Too often, time-strapped startups will hire a family member or acquaintance because they don't want to sift through a big stack of CVs. Instead, you should take the time to properly check potential candidates. Pick someone with the right mix of business skills and acumen and who can mesh with your personality as you will be working long hours together and will need to click on a professional and personal level.

Contracts of employment — these should list all the terms and conditions that you need to run your business which will include the hours of work, place of work, pay, overtime, holidays, notice periods, sick pay, pension arrangements and so on. These are all the practical elements that you should be clear about so that your expectations and obligations are met and that there are clear boundaries for your employees.

Make arrangements for your payroll to be managed - Payroll involves paying your employees the right amount each week or month, and deducting tax and National Insurance contributions. You can do this yourself or you can contract out, but you have a legal obligation to pay your employees, produce pay statements and to manage PAYE and National Insurance contributions. The consequences of not managing this correctly can be expensive which is something, as a startup, you cannot afford to do.

Employment policies — at the very least you should have a Disciplinary and Grievance policy which sets out how you will manage disciplinary issues and ultimately end the contract of employment if required. Other polices you could consider are a Code of Conduct, and some form of Attendance at work to include all reasons why they may be (or not be) at work. Again this sets out fairly and consistently how you will manage questions, issues and request in relation to the topics and manage expectations.

Training — Training is crucial for business development and success and an employee will be more productive and efficient if they are trained well. Once you have got your new team you need to make sure they know what they are doing, and if not, that you have spent time training them on using equipment, dealing with customers, ordering stock or using processes. Don’t assume that they know and that they will pick up what to do. Set out your expectations and standards, and provide training and information to ensure that all staff have the best opportunity to excel.

Share information — the best employees are engaged, informed and motivated. They will look after your business even when you are not there. So consider what business information, strategy and updates are helpful to engage your team and offer clear goals so that your workers know what their top priorities are. You should aim to build trust as employees are more likely to do things for leaders they believe in. Increase trust by listening and involving workers in decisions.

Irrespective of what your business is, your people, your team and your strategy are what will define and differentiate your business. Setting our your core values and how you will engage contractually, lead and manage your team is one of the key drivers of a business, and having the opportunity to paint that onto a blank canvas is exciting.

So getting it right from the start is crucial, but once you have covered all bases you will be able to build a vibrant culture, great team, and a profitable and exciting startup business.