2. BUSS1.10 Employing People Starting a Business Employing People “Executive ability is deciding quickly and getting someone else to do the work.” John G. Pollard John G. Pollard “To be successful you must recognise your weaknesses and employ people with complementary skills” Duncan Bannatyne

3. BUSS1.10 Employing People In this topic you will learn about  Types of employees used in small businesses  Using consultants and advisors

4. Why might a small business need to employ someone? Needs More Customers at weekends Expert advice Holiday Cover Increased work load Specialist skills Seasonal Demand Administrative support

5. BUSS1.10 Employing People Types of employees used in small businesses  Temporary Employees  Permanent Employees  Full Time Employees  Part Time Employees  Self-employed workers  Zero-hour contracts  Young and retired employees

6. BUSS1.10 Employing People Types of employees used in small businesses Temporary Employees These employees will have fixed term contracts and will work for a set period of time. They may be full time or part time but they do not have the security that a permanent employee has. Often, they are agency workers and are brought in to fill gaps at peak times e.g. seasonal work or to cover peak holiday periods. Should temporary workers have stronger rights? Permanent Employees These workers can be full time or part time. They will be a major investment for a small business and they often are delegated responsibility that they might not see in a larger firm. They will have an open-ended employment contract with the business. This provides them with greater security and they tend to be more committed to the firm.

7. BUSS1.10 Employing People Types of employees used in small businesses Full Time Employees Most employees are full time workers and they are likely to work at least 30 hours a week although most work more than 35 hours. They tend to be more committed to the business and are available when there is increased demand at the firm. Full time workers will spend more time in the job and will therefore have more scope to build up their knowledge base and working practices.

8. BUSS1.10 Employing People Types of employees used in small businesses Part Time Employees For a small business part time workers are a cost effective way of employment. It allows for flexibility in that hours can be increased if there is an increase in demand and the firm requires more workers. Legally, part time workers should not be treated less favourably than full time workers. Offering part time work increases the number of applicants for a position. Women with children and retired workers are more likely to be interested in part time work. A firm can retain valued workers that no longer wish to work full time by offering part time work. In the UK job sharing has increased where employees share a full time position.

9. BUSS1.10 Employing People Other types of employees and contracts Self employed workers There is no clear legal definition of a self employed worker. However, they tend to have the following in common:  They run their own business  They have a number of different customers at the same time  They decide when and where they want to work  They provide the equipment for their work  They may employ other people to work with them

10. BUSS1.10 Employing People Other types of employees and contracts Zero hour contracts Here, the employer does not guarantee any hours of work for the employee. The employee will be called in when needed. Clearly, this can be beneficial in cutting costs. However, it can be detrimental as there is less employee loyalty and the employee may not always be available for work. Trade unions have called for zero hour contracts to be curtailed or even banned as they exploit workers. The British Retail Consortium (BRC) give an opposing view. They believe that these contracts provide workers, perhaps with families, the flexibility that many appreciate.

11. BUSS1.10 Employing People Types of employees used in small businesses Young and retired employees Young people can be regarded as anyone up until the age of 25. There are strict laws for the employment of young people. These include their education and training. Those aged 16 or 17 can only work up to 8 hours a day and no more than 40 hours a week. They must have 2 rest days a week. They are entitled to a minimum wage of £3.53 per hour (October 08). This rises to £4.77 up until age 21 and £5.77 from age 22 and above. Many firms are now making use of the experience and skills of retired workers (Over the age of 65). This has led to a surge in employees past retirement age.

12. BUSS1.10 Employing People Using consultants and advisors Consultants and advisors Nearly all small businesses will use the expertise of consultants and advisors at some point. These will have the expertise that the start-up business simply do not have. Therefore, they must turn to another party. Typical among these are: Accountants – money spent on a good accountant is a wise investment. They can actually save you the money you pay them! Legal advisors – some areas are a legal minefield and it is wise to seek advice. IT advisors – quality website design can be priceless to a new firm. As always Business Link is well worth a visit for further reading.

13. Activity – employing people Gina is setting up a catering business to provide hot and cold finger buffets to corporate events and parties. She forecasts that bookings will be taken every Saturday from May to August and evening bookings approximately once per week all year round and more close to Christmas. Her sister will help with the food preparation and be responsible for delivering food to venues and arranging for waiting staff as necessary. Gina will advertise her services to local businesses through a flyer, yellow pages and a new web site she wants to be designed on her behalf in the next six weeks. Both Gina and her sister have experience in the catering business but have no other business experience. What are Gina’s staffing needs likely to be? For each of her needs recommend a suitable type of worker. Justify your answer. What are the advantages and disadvantages to Gina of employing the services of workers and consultants? How might Gina’s staffing needs change as the business expands?