Recruitment Agency Director Checklist: How to hire your first employee compliantly with confidence

As the owner of a recruitment agency startup, the decision to hire your first employee is a pivotal milestone, but one that is often fraught with anxiety. It’s a big decision to go from self-employed to an employer that is responsible for the livelihoods of other people. What if you hire the wrong person? What if you can’t afford to pay their salary if there’s a dip in turnover? What do you have to do to be compliant with all the legal requirements as an employer?

Although you help recruit people for your clients all the time, this one will feel really different – after all, it’s of direct personal importance. This initial recruit will lay the groundwork for your company's future and directly impact its trajectory.

The process of selecting this crucial team member involves more than perusing CVs and skill sets; it requires strategic thinking and a comprehensive understanding of your future needs and legal compliance. Here we'll walk you through 5 essential steps for recruiting your first employee compliantly and effectively, making sure you lay a solid foundation for your agency's growth.

When should I hire? Who should I hire?

The first hire: how important is cultural fit?

Onboarding new employees: legal compliance 

Additional considerations for office-based agencies

Once you’ve got them, make sure you keep them! 

When should I hire? Who should I hire?

Before embarking on the hiring journey, it's important to recognise when it's the right time to bring someone on board. Here are some of the key signs that indicate you might need to expand your team: 

• Healthy finances
  You’ve reached a stage of financial stability where you can comfortably afford to bring on an employee and sustain their salary, benefits, and overhead costs. 

• An overflow of business 
  If your agency is experiencing steady growth in new business, this could be an indicator that you need extra support to sustain and manage this expansion effectively. 
• You’re overloaded
  When the workload consistently exceeds your capacity, causing potential delays or a compromise in quality, it's a clear sign that additional hands are needed.  
• Reaching milestones
  Meeting or surpassing certain milestones outlined in your agency's growth plan can signify that the business is ready for the next phase, often requiring additional human resources. 
• Admin is getting in the way
  If you, as the founder, find yourself spending more time on administrative tasks rather than focusing on core business activities or expanding the business, it’s probably better for someone else to take on these responsibilities, freeing you up to strategise and grow the company further. 

 Understanding who to hire involves contemplating the long-term strategy of your agency. Your first hire should align not only with your present needs but also with the future you envision for your company.  

On the other hand, if you feel you haven’t quite ticked off all the boxes above, it may be worth partnering with a streamlined back office service to take some of the administrative burden off your shoulders and help you scale more sustainably. 

The First Hire: How important is cultural fit?

As a recruiter, you understand the hiring process, but it's important to be really clear about what you’re looking for – as your first employee, this person will play a significant role in helping to create your company culture. This should be someone who not only possesses the skills you need but also resonates with your agency's values...

Look for the right values

Seeking “cultural fit” in a small business is vital for creating team cohesion and shared values. But it’s also important to remember that looking for people who speak like us, think like us and look like us will not foster diversity. Embracing diverse perspectives and cultural backgrounds allows varied insights and approaches to flourish, fueling creativity and problem-solving. While aligning with your company’s ethos is crucial, valuing differences cultivates a vibrant, adaptable environment.

Offer the package you'd want

For recruitment agency startups aiming to...

Onboarding new employees: legal compliance 

The onboarding process is not just about welcoming new hires; it's about adhering to legal obligations. Prior to their start date, you’ll need to make sure that all necessary compliance measures are in place.

• Get employers' liability insurance

 Almost all employers in the UK must obtain employers’ liability insurance, which serves as a crucial safety net against workplace-related injury claims. Workplace accidents can occur unexpectedly, and if an employee suffers an injury or becomes ill due to their work, they reserve the right to claim compensation. Employer's liability insurance is designed to cover the costs associated with such claims, including legal fees and compensation payments. By securing this insurance, first-time employers protect themselves from potential financial strain and legal liabilities that may arise from unfortunate incidents in the workplace, ensuring the well-being of both your employees and your business.

• Don't skip your due diligence
• Draw up a contract
• Register with HMRC
• Select a Workplace Pension
• Run a monthly payroll
• Ensure you are GDPR compliant
• Introduce HR Software

Additional considerations for office-based agencies

If you’re establishing an office in the UK, adhering to your obligations when it comes to the physical workplace is also worth factoring into your plan.

• Insurance
  

Ensuring you have the right type of public liability and office insurance cover is an absolute must to protect you from any kind of potential accident or damage that may occur in the future.

• Health & Safety
• Fire Safety
• Compliance

Once you’ve got them, make sure you keep them! 

Once you've successfully recruited, the journey doesn't end there. To retain your employees, it's vital to establish a conducive work environment and growth opportunities. Here are a few pointers to keep in mind as you strategise your approach to employee retention:

• Set clear goals

Clearly define individual and team goals. When employees understand what they're working toward and how their role contributes to the business's objectives, they feel more engaged and motivated.

• Undertake regular performance reviews
• Role clarity and progression
• Offer pathways for career advancement
• Prioritise culture, well-being and recognition

About Ditton HR

Ditton HR is a Surrey-based Human Resources and Training Consultancy that assists you in assessing the HR health of your recruitment business and offers outsourced HR support.

With a goal to ensure that you follow your legal obligations, Ditton HR helps optimise the potential of your talented workforce and are very familiar with recruitment agencies and practices. 

Ditton HR has a range of SME starter kits. These kits support you with tailor-made documents, legally compliant HR documents to set your growing business off on the right footing.

Find out more 

About 3R

Supporting SME Recruitment agencies to fulfil their growth ambitions, 3R provide funding and back office solutions that enable efficient business operations and support you to deliver a service focussed experience for your contractors and clients.

In addition to our services, we have a Partner Network of tried and tested recruitment specialists to help make your journey as hassle-free as possible.