Hiring Staff
The time has come to actually get some help. We’ve been there! If you are anything like me it can be difficult to imagine anyone else doing what you do, and it can be hard to let go of some of the control. I’m a strong believer that all things are possible, just not all at the same time, and not all without help.
Get ahead of the need
This is tricky because there is no perfect time to hire someone, but you do want to start the process before you are ready for them because it can take weeks or even months to find the right person. I usually start 3 months before I want them to be on board, and 6 months before I want them to be able to perform reasonably independently.
There is also a cost to hiring help, so knowing that this is coming might give you time to book a consultation with your accountant, reflect on results to date, and make sure you can afford to get help before you make the commitment.
What exactly will they do
The first thing I encourage you to think about is what you actually do, each day, week, month and year. Some ideas on how to get clarity on this:
- Keep a notepad by your desk for a week and write down everything that you do.
- Think longer-term/more broadly and consider what happens in your business and industry each month.
- Consider your small business as if it were a big one with many departments, even though you might currently look after all of them. Note what tasks and responsibilities are within each key function of the business:
- Administration and organisation
- Marketing, advertising, onboarding, communications
- Product/service development (Inventory management)
- Finance (tax, accounting, bookkeeping, reporting)
- Human Resources (well being, training, hiring, performance management)
- Strategy and risk management (big picture stuff)
Now think about what you love doing because you’ll want to retain those tasks and responsibilities, otherwise you might end up in a ‘job’ within your own business that you don’t actually enjoy.
Get real on what things only you can do. Often we underestimate staff, and assume we are the only ones who could possibly do things. I get it - I love to be in control, and you are not totally wrong in assuming no one else will do it how you do it exactly. Sometimes we call this diversity though, and it can be a huge advantage - it invites new ideas, encourages more broad thinking, allows for better representation in decision making and enriches the workplace culture.
Finally, prioritise this list. You might feel totally overwhelmed and want to just get someone to do it all for you, but that is probably not realistic. What are the things that you need the most help with regularly, or as a high priority. Get help on these first, and then consider expanding the person’s hours, role, or perhaps hiring additional people over time.
Write the job description
You now have a list of things they can help you with, it is time to write this into a proper job description. This should outline what the role is, key responsibilities, position/title, who they report to, and all that fun stuff.
You might like to also consider, either just for yourself or to put in a job ad, the skills or characteristics or experience they should bring to the table. Who is it you are looking for? I encourage you to be open-minded and consider your own biases.
Figure out the pay rate/salary and conditions
It is important to check that what you are imagining for this role (pay, hours, entitlements, leave etc.) is in line with relevant laws. The best way to do this is to give FairWork a call or check out their website. They can help you to check what the minimum wage rate is for the role you have in mind, and you can then make a decision on what to pay your staff (this minimum or something above it!), and you can keep working conditions in mind and understand better your obligations as the employer.
Advertise and interview
Most small business owners I know actually hire friends or family, or find a connection through people they know, or even groups online. Others do advertise on platforms or reach out to recruitment agencies.
Once you have a few candidates, it is time to interview them. This can be anxiety inducing for both you, the future employer, and the candidate, future employee. It is important to consider the time of day, location, making sure everyone feels comfortable, and that you have ample time to check their vibe and ask all the important questions to figure out who is best for the job. There are no right or wrong questions, but if you need some inspiration check these out. You should also ask some questions more specific to the role and to your business.
Selection
Woohoo! You found your person. I really wish I could just interview romantic partners too and find my person but apparently, and unfortunately, it doesn’t work that way.
How do you let them know? You could call them or email them or arrange a follow up meeting and tell them in person. Once the official announcement part is done, it is important to get an employment contract written up and signed. I suggest you speak with a lawyer to draw one up. It doesn’t need to be too complicated, but it is an important document worth investing in.
When I hire staff I also like to send them a ‘welcome to The Real Thiel’ gift. Mike, in the Philippines, was my first hire and since family and community is such an important part of his culture and having big celebratory dinners is part of my family traditions, I gave Mike a voucher to take his own family out. I couldn’t be there to celebrate with them but I think a little gift or welcome pack, or even just a special lunch on the first day, can make the employee feel at home right away.
I think it is important to also let the other candidates know that they didn’t get the role. I remember how annoying it was as a young person going for jobs and just never hearing back. It feels rude and also means they might be waiting for you or feeling anxious for longer than necessary. Put them out of their misery!
It can be hard to let someone know they weren’t successful in securing the role. Perhaps use this little email as a base to write your own, or simply give them a call.
Dear ……..
Thank you for meeting with me about the [job title] position at [business name]. It was a pleasure to learn more about you. Unfortunately, I'm emailing to let you know that you didn't get the job. I appreciate the time you took to apply and to meet with me, and wish you the best of luck with your job search.
Then you can begin the onboarding process.
Onboarding
This is where the accountant comes in!
When you hire someone, you should go through these key steps to make sure you are compliant and ready to pay them:
- Sign up or update your information with your state’s relevant work cover agency - in SA it is ReturnToWorkSA. You need to pay an annual premium usually, and then report to them at the end of the financial year about what was actually paid to staff. Pop this in the diary and set it to repeat.
- Australian Capital Territory: WorkSafe ACT
- New South Wales: WorkCover NSW
- Northern Territory: WorkSafe NT
- Queensland: The Workers' Compensation Regulator
- South Australia: ReturnToWork SA
- Tasmania: WorkCover Tasmania
- Victoria: WorkSafe Victoria
- Western Australia: WorkCover WA
- Send your employee:
- Super Standard Choice Form
More info here on how to fill this out. - Tax Declaration Form
More info here on how to fill this out. - Ask them for their bank details so you can pay them!
- Confirm with them:
- pay cycle (Monday to Sunday, and paid on Tuesday for example)
- the start date
- frequency of payment (weekly, fortnightly, monthly)
- Salary (fixed), or rate per hour
- Invite them to ‘My Payroll’ (if using Xero) after your accountant has added them to the system
Once you have this information, book a time or engage your accountant to help set up the payroll system in your accounting software. We highly recommend (in fact we insist it if you are our client) that you use software once you have payroll demands. It is just far too inaccurate and inconvenient to do manually, especially with single touch payroll which the ATO now requires.
We are developing a special blog on some key tips when setting up employees in Xero. Watch this space!
Here are a few other things you might like to consider:
- Welcome meeting on their first day
- Procedures and policies
- Share with them your key values
- Create them their own email account
- Email signature
- Add them to all important software systems
Make sure you have things for them to do on their first day! The worst thing is when you start a job and have nothing to do and no one to talk to, and all you want to do is learn or help out.
Training
Remember, it is their first day, week, month. Be kind. I suggest that either you provide some training manuals to them on their first day that outline how to use the key systems or what your core processes are. Or, perhaps this becomes their first task! You could show them how to do things, and then their job is to create their own manuals which can be passed on for generations to come.
Pay them
Don’t forget this one, otherwise they won't stick around too long!
This might be a job for you, or your bookkeeper or your accountant, and it should happen on time, every time, through your chosen accounting software program. If you are using Xero then check out their guides or reach out to us for a training sesh.
For further understanding, there are 3 elements to someone’s pay:
- Earnings (salary, or rate per hr multiplied by hours for example)
- Super (10% on top of earnings paid directly to their superfund)
- Tax withheld (an amount from their earnings that you pay to the ATO on their behalf)
NET PAY (what the employee physically receives) = Earnings minus Tax withheld
You as the employer need to put the Super and the Tax withheld amounts aside so that you have the funds available to pay to the superfund and to the ATO respectively. At the very least you have to pay these each quarter, but we recommend that you do it monthly just to keep on top of it (and so you are not tempted to borrow those funds for other purposes). It is a serious no no to not make those super and tax payments.
Review and performance management
I certainly found that while hiring people does help free up your time in one way, it also creates new tasks and responsibilities for you - you are now a manager! Part of this role is supervising, reviewing, and performance management.
Perhaps you have worked for someone else before? It is frustrating to be judged on things out of your control, and it is hard to meet expectations you didn't even know existed. So, be sure to set KPIs (key performance indicators) that are relevant to your employees role and that are within their control, and importantly that reflect values you are trying to instil. Set clear expectations up front (when hired) and whenever work is assigned. If you are feeling like you are doing this already and the employee is ‘just not getting it’ then maybe your communication style could be tweaked. I found some great tools in Dare to Lead (Brene Brown).
I meet with my staff individually each quarter for a pulse check. We send through the blank pulse check agenda ahead of time so they can add notes and we can review and come prepared.
Then we meet for an hour or so and discuss:
- A quick check in - to get anything off their chest
- Review progress on goals they set for themselves last time
- Set goals for the coming quarter
- Check in on how they have been living into the values of our firm
- Ask for feedback on how I can be a better manager/what they need from me
- Rate themselves on some key factors we care about, for example ‘I feel safe and secure in my workplace’
- What they think they do well in their role
- Biggest achievement this quarter
- What they think were their shortcomings this quarter or biggest challenges
- Anything they want to change about their role or responsibilities
- Action list to note anything that comes out of the meeting to action immediately
People management is constant, and it can be a lot of work at times, but think of your employee like an athlete and you are their coach. The more you put in, train them and guide them, the better their performance will be.
Contractor or Employee
Remember, you can’t just say that someone is a contractor and then not pay their super or pay them a reasonable amount. The ATO has rules on this and a handy tool to help you figure out the real nature of the arrangement. It can be tricky so reach out to us if you get stuck.
Year End Payroll Finalisation
At the end of each financial year it is important to double check everything in your accounting software and then to report the payroll information to the ATO so that it will then feed through to your employee’s tax return in the ‘pre fill’. Here’s how to do it:
- Organisation Settings
Make sure all of the details there are still accurate - Payroll Settings
In particular, look at the earnings rates and make sure they still make sense. Any questions, let me know.
Make sure all key earnings pay items say YES for 'reportable as W1'. - Employee Details
Accounting > Reports > Employee Contact Details Report.
Review this and check birth dates etc. - Reconcile
Make sure the bank is reconciled.
Make sure all pay runs for the financial year have been run and employees have been paid.
Make sure all pay runs for the financial year have been filed for STP.
Go to Payroll > Pay runs > Look at the summary screen to see "filed" on the right side. Fix any errors. - Run Payroll Reports
Accounting > Reports > now open 2 reports (right click open in new tab):
1) General Ledger Report
2) Payroll Activity Summary Report
Set date rate to Last Financial Year (technically today we're now in FY2022 but we want the report for 2021).
CHECK:
- Wages Expense account (Net Movement) in General Ledger agrees exactly to the Total Earnings on the Payroll Activity Report
- Super Expense account (Net Movement) in General Ledger agrees exactly to the Total Super on the Payroll Activity Report
No need to look at other accounts really, but you might look at the Wages Payable, and Super Payable accounts.
If the totals do NOT match, grab screenshots and SPEAK TO YOUR ACCOUNTANT.
Only once that is ALL OK do you do these next steps:
- Finalise Single Touch Payroll ("STP")
Payroll > Single Touch Payroll from the drop down
You will be on the Overview tab. Select to go to the FINALISATION tab.
Then make sure the date in the top right-hand corner is for the correct period you are reporting on.
Select the employees to include (usually all of them!).
You can click into each person if you want to check them. If anything looks wrong, email me.
When you are happy, click to FINALISE down the bottom.
Read the declaration. Tick. Finalise/OK/SUBMIT.
Handy Reminders:
Please make sure to continue paying Super each month (or each quarter at the latest).
Please make sure you process pay runs and then make payments to staff, and be sure to pay staff the NET PAY.
Please reconcile bank transactions:
- payments of wages: select the Wages Payable category
- payments of super: select the Super Payable category
Growing your team and your business is an exciting and daunting adventure. We wish you all the very best because when you find the right team everything can flourish.
Xxx Lauren
P.s. here are some other handy links with more info and ideas: https://business.gov.au/people/employees/hiring-employees
