Business Insurance

How to Hire Employees

Whether hiring for the first time, replacing a past or current employee, or your business is growing, hiring the right employees can be challenging, time-consuming, and potentially expensive. Here are some tips on how to hire the right people.

Unless you want to be replacing an unsuitable employee, you’ll want to spend the time searching for the right candidates in the right place. It’s more than just getting someone to fill a job for a set salary, but finding someone who’s skilled for the job and fits the culture and work style of your small business.

If you’re reading this looking to hire for the first time, Employers’ Liability Insurance is a must. This is an essential insurance policy that’s legally required under UK law, and it protects you as an employer against legal action from current or former employees. If you don’t take out Employers’ Liability Insurance, then you can get a hefty fine for every day you’re not covered.

In this short article, we’ll cover:

Where to hire good employees

In this day and age, the best place to look for good employees is recruitment platforms. Spaces like Indeed, or social media equivalents like LinkedIn Jobs can put your business and vacancy in front of millions of potential candidates.

Pew Research found that 79% of job seekers had used the internet to gather resources or information about a vacancy, showing how central digital options have become to recruitment. And as you might expect, this was skewed significantly towards younger demographics, and also those in middle-to-high income streams.

The above trends have likely increased with the move to all-things digital over the past years. Importantly, it shows you that if you want to put yourself in front of young, highly talented individuals, you need to be using the right digital platforms.

Indeed is one of, if not the most popular job hiring website. With ten jobs added every second and 250m unique monthly visitors, it’s a great option for putting your vacancy in front of qualified candidates.

Linkedin Jobs’ feature is the most popular social media of choice for job seekers and recruiters. With more than 81 job applications being submitted every second and four people hired every minute via LinkedIn Jobs, you’ll certainly find a big pool of excellent candidates with LinkedIn Jobs.

How to hire the right employees

To hire the right employees, there are a few things you should consider. Below are some important considerations to make before starting the hiring process.

1. Look in the right places

To hire the right employees, first of all, you need to look in the right place. We’ve discussed the importance of certain web-based platforms like Indeed and LinkedIn Jobs, and it’s crucial that you’re using these platforms to tap into the best pool of candidates possible.

Another good way of finding the right employees will be to ask current employees for their recommendations. Employee referrals can be an effective recruitment strategy as the current employee will not want to refer a bad candidate, as it can put their judgement in disrepute.

Employee referrals can help you recruit faster—which means cheaper. Glassdoor says that interviews from employee referrals are between 2.6% - 6.6% more likely to lead to an accepted job offer.

It’s also an ideal way to make sure they fit into the company culture. When an employee decides to refer, they’re pre-filtering them to make sure they fit in with the rest of the team. As a bonus, employee referrals will tend to improve employee retention at your company, possibly because they’ve become more invested in the company through the referral.

2. Screen employees

Regardless of how you’re interviewing, make sure you spend time screening candidates. This may be as simple as asking basic competency questions or even setting up a more rigorous skills test. This is an easy way to ensure you’re not wasting time progressing with a candidate who doesn’t meet the specifications or have the skills to do the job well.

Some hiring platforms, such as Indeed, allow you to set up screener questions to ensure candidates meet the minimum requirements before the CV sift.

3. Check they’re compatible with your company

An important factor when making a hire is ensuring they’re compatible with the company culture. A good culture that embraces team members can make or break a business’s success, so you should spend time to ensure a new employee is the right choice.

During the interview, or even during the screening stage, you could prompt candidates about their values and attitudes that are important to them. You may find that a highly qualified candidate who just doesn’t fit in with the company may not be the right choice. . 4. Take your time

When you’re hiring, don’t try to rush into choosing someone just to fill the gap. Even if it’s a high priority to get someone in to get the work done, hiring an unsuitable candidate could cost you in the long run—unqualified or unskilled employees will take up extra resources in training or the time of other employees.

This could mean leaving your job ad up longer than you expected, having a more rigorous interview progress, or even giving an offer to a candidate based on a short initial contract or probationary stage.

Even if you have candidates lined up ready to go, if you don’t feel like any would be the right choice, then you shouldn’t feel pressured to choose one just for the sake of filling the vacancy.

How much does it cost to hire employees?

Hiring a new employee can end up costing you a lot more than just their salary. If you’re running a small business, it’s important to understand the costs involved as they can add up.

Hiring a fresh employee, if we assume you’re paying them £27,600, the total cost could be around £53,000 for their first year of employment- almost twice the actual salary. This figure was reported by The Undercover Recruiter, who breaks down the costs you need to consider when taking on a new employee. Not all costs will be relevant to your business and the role you’re providing, but it shows how many hidden costs besides a salary there are.

Here’s a breakdown of the costs:

  • Recruitment: £3,000 if you decided to use a recruitment agency, but potentially a lot less if you opted for a DIY solution.
  • Salary: £27,600, as an average UK salary. Increase or decrease this depending on the job’s pay scale.
  • Bonuses: £1,656. Your business might not typically pay a bonus, but on average this could be around 6% of the total salary, or also commonly up to a full month’s salary in addition.
  • National Insurance: £4,037. Employer National Insurance contributions are 13.8% of salary, this would go up or down depending on how much you’re paying the new employee.
  • Pension: £828 based on the employer’s 3% minimum pension contributions. This can go up or down based on the salary and whether you choose to contribute more than the minimum.
  • Training: £1,068 if your company decides to offer training opportunities, whether internally or externally.
  • Office space and/or equipment: £4,800. New employees will need equipment, such as a desk and computer, or in more manual jobs, possibly heavy-duty hardware and tools.
  • Other costs: £8,000 to cover Human Resources (HR), maternity leave, software licenses, or other perks like a company car for example.

While the above list depends entirely on your business’s package for employees, it gives you a good idea of the different costs that go into hiring an employee.

But, if we’re talking about the cost of replacing an employee—perhaps if they’ve left voluntarily or you’ve decided they’re not a good fit—the real cost will be different. Research shows that you could be spending around £5,433 on finding a replacement for a lost employee, which includes setting up and running job advertisements, holding interviews and the time spent in the hiring process.

In the same research, Oxford Economics and Unum say that it will take up to 28 weeks for that employee to become as productive as the one they’re replacing, which could take up your and your other employees’ time. It’s estimated this cost could be up to £25,182, but of course, this is highly dependent on the type of job. Overall, replacing an employee could cost around £30,614 plus salary.


Hiring the right employees can be difficult. But with the right approach we’ve detailed here, it doesn’t have to be too challenging or take up lots of your time.

If you’re a small business and you’re hiring for the first time, you must have taken out Employers’ Liability Insurance. This insurance is compulsory for a business with one or more employees and will protect your small business against compensation claims brought by former as well as current employees. There’s a large fine for not having it as it’s a legal requirement.

Erin Yurday

Erin Yurday is the Founder and Editor of NimbleFins. Prior to NimbleFins, she worked as an investment professional and as the finance expert in Stanford University's Graduate School of Business case writing team. Read more on LinkedIn.