Taking on a new team member is a big step. It can feel a little intimidating at first, but it’s also a huge reward for a first-time business owner. The right team is the biggest factor in your business’s success. But don’t worry, I’ve got you covered.
I’m going to give you a straightforward look at the standard hiring process for small businesses. We’ll start with your role and obligations as an employer, then move on to attracting the right people and getting new staff on board.
What are the responsibilities of an employer?
As an Australian employer, you need to know your obligations to your employees. This means following labour laws and making sure your workplace is a great place to be. Your guide for this is the Fair Work Act, along with any relevant Modern Awards, and the National Employment Standards (NES).
Before you start hiring, here are a few things you need to understand:
Payroll and taxation
Paying your team accurately and on time is a core responsibility. This means correctly calculating PAYG withheld, overtime pay, and superannuation. You have to do this consistently, following a regular pay cycle.
The law says you need to keep accurate payroll records for at least seven years. This is a lot easier with payroll software, which is a requirement for reporting Single Touch Payroll (STP).
Besides recordkeeping, regular audits are best to ensure total compliance with payroll and tax laws.
Leave entitlements
As an employer, you have to understand and manage different types of leave for your employees.
Here are the different types of leave entitlements for Australian employees:
- Annual leave: This is the primary type of leave, and it’s accrued over time. The minimum entitlement depends on the type of employee and industry based on Modern Awards.
- Sick leave: Employees are entitled to a certain number of paid sick leave days per year.
- Long service leave: This is a form of paid leave accrued over a specified period of employment, typically 10 years.
- Parental leave: Both primary and secondary carers are entitled to parental leave.
- Unpaid leave: Employees may request unpaid leave for various reasons. Examples of these are carer’s leave, compassionate leave, or study leave.
You are responsible for tracking and calculating all leave for every employee. This ensures your payroll records are accurate and that employees can see their leave balances, which is super helpful when they want to check their annual leave reports.
Workplace health and safety
Every employer has to follow the Work Health and Safety Act of their state or territory for their state or territory. It’s your job to identify potential hazards and their risks. For each risk, you should have a standard operating procedure and make sure your employees are trained on it. This is especially important if your business uses machinery or hazardous substances. In some industries, you may even need to hire a safety officer.
Employee data privacy
As an employer, you handle personal employee information, and you’re obliged to keep it private. Personal information includes names, addresses and contact details, dates of birth, tax file numbers, medical records, and bank account details.
Newly hired employees should be able to provide consent to collect their information for business use. They should also be able to access, update, or remove their information. Ideally, you should prompt updates periodically for accurate recordkeeping.
Apply appropriate cybersecurity measures to protect employee data from unauthorised access or loss. There should also be a set process for disposing of the data when the duration of employment ends.
How to hire employees? 5 steps to follow
Once you’re on top of your employer obligations, you’re ready to start hiring. It might seem like a lot, but taking it one step at a time is the best way to find the right person for your team.
1. Create a clear job description
A good job description sets the right expectations from the start. You’ll find tons of templates online, but they should always include:
- Job title
- Company overview
- Job summary
- Key responsibilities
- Required qualifications: Essential skills, knowledge, and experience needed for the position
- Preferred qualifications: Other qualifications or skills that would be nice but not mandatory
- Working conditions: Work hours, physical demands, travel requirements, compensation and benefits can also be included.
Keep the language clear and to the point. While it’s tempting to use industry jargon, you don’t want to confuse anyone. Your goal is to represent your company accurately and make a great first impression.
2. Screen candidates for skill, experience, and cultural fit
Now it’s time to look through CVs, resumes, and portfolios. Compare what they’ve sent you against your job description. For specific roles, you might want to give them a technical test or assignment. This step can also help you see where a candidate might need some extra training or Continuing Professional Development (CPD) opportunities.
Use a checklist to evaluate applications and create a shortlist. Then, do some quick phone interviews to check their communication skills before scheduling a full interview.
3. Conduct effective interview processes
Job interviews are a two-way street. They’re an opportunity for you and the candidate to assess whether working together is a good idea. Prepare a set of questions to ensure the interview stays focused and relevant. The main goal should be to get to know the candidate well.
Start with an overview of the position, then ask candidates to introduce themselves. Pay attention to details you may want to ask about later in the conversation. Take note of non-verbal cues that may help you evaluate whether the candidate is a good fit.
Cultural fit is often overlooked, but it largely impacts employment experience. This means that employees should be able to work well with your business’s values and work well with existing staff. Otherwise, employees will come and go fast, hurting business operations and budgets. So, ask about work styles, collaborative abilities, and problem-solving approaches.
4. Check employee references
Ideal candidates should be honest about their skills and experience and be great coworkers. Employee references let you verify a candidate’s work history, skills, and character. After the interview, let the candidate know you plan on contacting their references. This helps protect their privacy and build trust.
Like the interview, prepare a structured list of questions. This will help make sure you get the information you need. Focus on the candidate’s job performance, ethics, and ability to work under specific conditions. Sometimes, you may also ask about concrete examples of their work. While references are usually from past employers, colleagues and clients may also give good insights.
5. Finally, make an employment offer
Now comes the most exciting step: You’ve done your screening, conducted interviews, and found the perfect candidate. It’s time to make a job offer!
First, communicate the initial offer with the job title, salary, and start date. Include other essential terms such as non-monetary benefits. Express your excitement about the candidate joining the team – it’ll also help them look forward to it. You should expect the candidate to negotiate all these aspects but set boundaries on your capacity to meet their requirements.
If all goes well, you can send a formal offer letter. Include critical information like the probationary period, training, and access to benefits. Specify whether the position is full-time, part-time, or contract-based. Send over the offer letter with a clear deadline for acceptance.
Once the candidate accepts the job offer, start working on the employment contract. Congratulations – you just hired an employee!
Learn more about engaging workers: ato.gov.au
Tips for onboarding new employees
A well-prepared onboarding process sets the tone for new employees. A positive experience will lead to great performance. Follow these best practices to help your new staff member start well!
Use forms for new employee
Hiring an employee requires following legal rules. You need several documents to make the employment official. Before starting, make sure the employee has signed a contract and given you the required tax forms. You may also need to assign them a payroll number and get their banking and retirement savings details for payments. Finally, get the employee’s preferred contact person in case of an emergency.
As mentioned above, it’s important to get the employee’s consent to collect and store their information. A formalised consent form builds trust with new employees and ensures you follow good data privacy standards.
Prepare everything before their first day
Ensure the employee’s workspace is ready with all the necessary equipment. Remote employees should ensure they have access to all the tools they need to perform their roles. Prepare a welcome package with company policies, the employee handbook, and relevant documents.
You may plan a detailed schedule for their first week to get them settled in. Make sure they dedicate time to meeting new team members and training.
Introduce the workplace and team members
New employees should meet other employees who are important to their job. This helps them learn the company’s goals, purpose, and plans. It also allows them to start building relationships with others. This will help them when they need to work together. If your team is not too big, assign an experienced team member to guide and support new employees.
If your employee is working in an office, give them a tour of the layout and key facilities. This will help cut down on questions they may have once they start working on their own tasks.
Unlock business growth by recruiting the right employees
Hiring the right employees is very important for building a successful business. By following the steps, you can increase your chances of finding the perfect person for your team. Define the role, attract candidates, conduct effective interviews, and onboard new hires.
Remember, the hiring process is an investment in your company’s future. It’s essential to balance efficiency with thoroughness to ensure you make informed decisions.
To streamline the hiring and onboarding process, consider utilising payroll software like Payroller. Payroller help you manage employee records, run accurate payroll, and comply with Australian labour laws. With features like employee apps for timesheets and annual leave reports, Payroller simplifies HR management for small businesses.
Combine effective hiring practices with the right tools, and you can build a high-performing team for your business’s success!
Frequently asked questions about hiring staff for small businesses
What are some of the common challenges in hiring employees?
Hiring workers can be difficult, even for business owners with experience. Trying to manage your business and also find new employees can be stressful. You may want to hire a recruiter or HR expert if you plan to grow your team a lot. They can help you follow labour laws, which can save you time and worry.
Another problem is finding qualified applicants, especially for jobs that are in high demand, such as hotels and tech. Competing with big companies to hire skilled workers can be expensive and take a lot of time.
What are the important legal considerations when hiring employees?
Australia has robust employment laws to protect both employers and employees. Here are some key legal considerations:
- Fair Work Act: This is the primary piece of legislation governing employment relationships.
- National Employment Standards (NES): These are minimum employment conditions that apply to all employees.
- Modern awards: Industry-specific awards outline minimum pay rates, conditions, and entitlements.
- Superannuation: Employers must contribute to employees’ superannuation funds.
- Work Health and Safety: You have a duty of care to provide a safe and healthy workplace.
- Anti-discrimination laws: Avoid discrimination based on age, sex, race, disability, sexual orientation, religion, or other protected attributes.
Do I need special licences to hire employees?
In Australia, you usually don’t need special licenses to hire employees. However, some jobs may have specific requirements or licenses. For example, if you hire tradespeople, they might need certain licenses or certificates to do their work.
It’s essential to research the specific requirements for your industry to ensure compliance.
Do I need to pay superannuation for all employees?
Yes, you must pay superannuation for almost all employees in Australia. Superannuation is a compulsory retirement savings scheme. The current superannuation guarantee (SG) rate is 11.5%, increasing to 12% by 2025.
There are some exceptions, such as casual employees who earn less than $450 per month. However, it’s essential to understand the specific rules and regulations to ensure compliance.