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Taking on a member of staff

Discussion in 'Employment & HR' started by Beermonster, Jan 2, 2017.

  1. Beermonster

    Beermonster UKBF Contributor Free Member

    Posts: 41 Likes: 2
    ive been reading the forums but all the information is a bit overwhelming, so I thought it best to ask, sorry if it's been covered.

    I've been in business for over 6 years, the first 4 on my own, the last 2 my wife joined me, but now I'm thinking of taking on another person to free me up so I can concentrate on getting more traffic to the website.

    But what is the "real" cost of employing someone? The way I look at it is for example if I paid someone £1k p/m I would have to sell an extra £4K to cover them, I haven't worked it out exactly.

    At this time of year it's busy but during the summer some days I can manage on my own, so I guess I'm thinking of zero hours, I'm not keen on zero hours contracts but it seems the best option at the moment.

    Any advice would be appreciated.
    Posted: Jan 2, 2017 By: Beermonster Member since: Nov 25, 2010
  2. ethical PR

    ethical PR UKBF Legend Free Member

    Posts: 5,978 Likes: 1,338
    Have a look at the ACAS and .gov.uk site lots of useful information on your role and responsibility as an employer including template terms and conditions for employment contracts (depending on roles).

    Cost will be the salary, any equipment needed for them to do the job, tax, NI, pension, training etc.

    You are right to think about what income you will need to generate to employ them and make a profit.

    You will also need to have relevant policies in place such as managing absence, health and safety etc

    Most people want a regular income so zero hours contracts don't suit everyone - probably more suitable for students or industries where they are more the norm such as care work or bar work.
    Posted: Jan 3, 2017 By: ethical PR Member since: Apr 19, 2009
  3. The Accountancy Lab

    The Accountancy Lab UKBF Ace Free Member

    Posts: 1,906 Likes: 439
    If you get the right person, they should be able to do other tasks during the quiet period such as selling, improving systems etc.

    You can also manage it by requesting they take their holidays during these quiet times.
    Posted: Jan 3, 2017 By: The Accountancy Lab Member since: Aug 7, 2016
  4. Sandra Campbell

    Sandra Campbell UKBF Newcomer Free Member

    Posts: 6 Likes: 2
    Just some ideas for you below:
    You could consider an annualised hours contract where the person works so many hours for your over a year. You agree with them in advance when the hours will be worked. So they are not employed full time but instead for the number of hours you think you would need them for over a full year i.e. you could have them working more hours in certain months and no hours in other months.
    Or consider taking someone on part time with minimum guaranteed hours every week - allows the person the scope/time to take on a second job (another part time job) when not working for you if they needed a full time income.
    You may want to consider trialling a new role on a temporary basis, first of all, with a view to making it permanent if it is successful/there is enough work for the role.
    Re costs verses income - Your accountant should be able to 'number crunch' based on hourly rate of pay and hours of work what your overall wage costs will be taking into account Income tax, NI, holiday pay etc. Then you will need to consider other costs as per Ethical PR's post (training, equipment etc)
    Hope this helps
    Posted: Jan 4, 2017 By: Sandra Campbell Member since: Dec 8, 2016
  5. Newchodge

    Newchodge UKBF Big Shot Free Member

    Posts: 6,811 Likes: 1,710
    @Sandra Campbell I know a lot of organisations use annualised hours contracts, however how do they comply with NMW rules? Suppose the role is gardening, and requires a total of 35 hours every week, but 50 hours in April to September and 20 hours October to March. If someone works 50 hours in April but only gets paid for 35, they are not going to get NMW during the pay reference period or getting it put right in the one following it, as required by the regulations. I would be interested in your thoughts.
    Posted: Jan 4, 2017 By: Newchodge Member since: Nov 8, 2012
  6. Sandra Campbell

    Sandra Campbell UKBF Newcomer Free Member

    Posts: 6 Likes: 2
    Hi Cyndy
    You just treat annualised hours as you would 'salaried hours' as per the definition and way of calculating for National Minimum Wage given on government website.
    See below example on gov website.


    Jeba’s contract says she must work 2,040 hours each year.
    She’s eligible for the minimum wage rate of £6.95 per hour.
    She gets paid monthly (12 times a year), so each pay packet covers an average of 170 hours (2,040 divided by 12).
    This means she must be paid at least £1,181.50 a month (£1,181.50 divided by 170 makes £6.95) for the basic hours in her contract.

    Posted: Jan 5, 2017 By: Sandra Campbell Member since: Dec 8, 2016
  7. Employment Law Clinic

    Employment Law Clinic UKBF Big Shot Full Member - Verified Business

    Posts: 3,023 Likes: 1,423
    Hi Beermonster,

    Regarding the type of employment contract you require, the best option is simply to find someone you consider capable of assisting, and explaining your specific needs, rather than trying to get your head around the best option you think you might need - let the professionals advise you on what's best for you, rather than trying to determine this for yourself.

    I can’t perceive for a moment why you would need a zero-hours contract, it just seems entirely inappropriate, and there are plenty of better options available. The options already mentioned are practical (although using a template from the likes of ACAS is really not sensible, as it gives you no flexibility, and is very basic, satisfying the legal minimums but not the specific needs of any employer, let alone a naïve one). You could also have something along the lines of a “term-time” contract, not running the working patterns to typical school holidays, but something more appropriate to your own business needs.

    Or you could simply have a standard full-time contract (which I suspect from your post is all you actually need), and use the terms therein to best suit your needs – booking holidays only around your quiet periods, backed-up with other time-off if necessary.

    So rather than try to hire someone to provide a zero-hours contract, I recommend you hire someone that will listen to & can fully assess your needs, and recommend the best type of contract & the most relevant terms to include, something that fits your needs, but also something that you’re comfortable with – you did mention that you’re not keen on zero-hours contracts, although it’s the abuse of these that gets the publicity, when the practice is not a bad thing in itself.

    Karl Limpert
    Posted: Jan 5, 2017 By: Employment Law Clinic Member since: Aug 10, 2009