1. Employing People

2. Reasons to employ people
As business grows, owner is unable to carry out all the tasks necessary
An entrepreneur may not have all the skills required to run a business – require specialist expertise (e.g. marketing, finance)
Seasonal nature of business (Christmas tree farms)

3. Options if expanding Outsourcing Training existing staff
Hiring new staff

4. What type of employee? How constant is the work?
How long will the work last?
How many hours are required each week?
What level of responsibility is required?
What obligation is the business willing to take on?

5. Options
Permanent employees (full or part time with an open-ended employment contract)
Temporary or fixed-term contract employees (predetermined time or until specific task is completed)
Employees on zero-hours contracts (business can have people on-call)
Employment agency staff
Self-employed freelancers, consultants & contractors

6. Permanent v. temporary
Permanent tend to be more loyal & more motivated than temporary
Efficiency – seasonal work requires temporary workers only
Temporary useful as cover for maternity leave or long-term sickness
Use agency staff to cover holidays or sickness

7. Full-time v. Part-time
Depends on nature of job & needs of the business
Also depends on individual employee
Job-sharing – 2 or more people share the responsibilities, pay & benefits of a full-time job in proportion to the hours they work
May retain valuable staff who want to reduce hours & might otherwise leave

8. Advantages of part-time workers
Efficient way to keep costs down where full-time work is not necessary
Builds in flexibility – respond to changes in demand more easily
If part-time work suits employees, may be more motivated
Less absenteeism, stress & greater productivity
Availability of part-time work may create a wider pool of candidates
Opportunity to work part-time may mean business is able to retain key employees

9. Disadvantages of part-time
May involve potentially higher staffing costs
Extra induction
Extra training
Increased administrative costs

10. External consultants, contractors & advisors
Self-employed or employed by another company
Benefit from skills without taking on responsibility of employer

11. Cost of employing people
People’s contribution to business success is clear BUT
In addition to wage or salary, business must also pay:
National insurance contributions
Possible pension contributions
Administrative costs

12. Legislation Often seen as a real burden for small businesses
Contracts of employment
Grievance & disciplinary procedures
Equal pay & equal opportunities legislation
Minimum wage
Working time requirements
Health & safety legislation

13. Managing Staff
Leading & managing staff effectively ensures that employees are well motivated & perform their jobs well
Does an entrepreneur have the necessary skills to do this?

14. Employee Absence
Business start-ups tend to employ few people due to their scale
Absence of any one employee can have a significant negative impact on the business