If you’re a business in the UK, hiring staff can be a big decision. Before taking on employees – whether on a full-time, part-time or self-employed basis – it’s important you have a good reason for adding to your workforce and understand the legal responsibilities that comes with employing new members of staff.
What Are The Different Types Of UK Employment Contracts?
With the time, costs and legal obligations that comes with it, taking on a new member of staff can be a big commitment. However, there are a number of different ways to employ a new worker – and hiring someone doesn’t necessarily mean offering a full-time, permanent contract.
Depending on the type and size of your business – as well as your recruitment requirements – there are a variety of ways you can hire members of staff. If you’re an office-based business offering services to clients around the clock then recruiting a worker on a full-time basis may be the most cost-effective option, whereas if you run a seasonal photography studio and require extra workers on a project-by-project basis, then working with a freelancer will likely suit you better.
Before deciding on which type of employment contract to offer any new member of staff, make sure you think carefully about the role of the worker, what they’ll be doing for your business and how often you’ll require their services – you don’t want to be left struggling to meet deadlines with too few employees, or paying over the odds for workers who aren’t really needed.
Fixed-Term Contract Employees
A worker who is on a fixed-term contract – for example, if they’re working for a set amount of time until a specific project is completed – has the same rights as a permanent member of staff. The main advantage of hiring an employee on a fixed-term basis is your obligations to them only last as long as the length of the contract, meaning you can hire workers as and when you need them.
You may take on an employee on a fixed-term basis to cover a seasonal spike in business or if you’re launching a new product or service and require an extra pair of hands.
A permanent employee can be hired on either a part-time or full-time basis. As an employer you are required to adhere to a full range of legal obligations to your workers, including sick pay and holiday entitlement.
Permanent employees are usually hired on an ongoing employment contract, and the advantages of hiring them includes predictability, loyalty and regularity in the workforce. The disadvantages of entering into a permanent contract for an employer includes increased management time, the strict adherence to legal obligations and a lack of flexibility.
Zero Hours Contract Employees
The main advantage of hiring a zero hours contract employee is the flexibility involved. A zero hours contract means that you can call on your workers as and when you need them, without meeting the legal obligations or costs associated with a permanent employee contract.
However, while a zero hours contract may be more cost-effective, it’s a two-way street, meaning the employee is not obliged to work a set number of hours per week. Depending on the type of industry you’re working in, zero hours contract employees can provide a flexible solution to your staffing needs.
Temporary Agency Staff
A large number of start-up businesses begin their recruitment process by hiring temporary staff supplied by an employment agency. As these type of workers are often available at short notice and you don’t have a great deal of legal obligations to them, temporary agency staff offer a relatively low-risk way of bolstering your workforce.
However, as you’ll be paying commission and fees to an employment agency, it is a more expensive option that hiring full or part-time workers directly. Although things such as National Insurance Contributions will typically be handled by the agency, you are still obliged to provide things such as a basic level of pay, an appropriate amount of rest breaks and a safe work environment for your workers.
Freelancers, Contractors and Consultants
With an estimated 2 million workers, the freelance economy makes up a significant part of the UK workforce. As an employer, many businesses use freelancers, contractors and consultants to help complete specific projects as and when they’re needed. Professional service companies, meanwhile, typically call on consultants to help meet client needs on a seasonal basis. As the freelancer, contractor or consultant is self-employed, your legal obligations as a business are minimal.
However, in order to meet HMRC requirements, it’s important to check the legal status of any freelance worker you go into business with. The definition of ‘self-employed’ usually relies on the work that the freelancer is doing for you and where they carry out the work. As a responsible employer, you should check the employment status of anyone who works for you and we’d recommended drafting a contract with any self-employed staff you hire.
How To Resolve Workplace Disputes
A healthy and positive working environment is crucial for any productive and successful business. If problems within the workforce are not resolved in a timely manner, disputes can quickly escalate. As a business owner, make sure that you have suitable procedures and policies in place to resolve any workplace issues. For more information on how to maintain a healthy working environment visit Acas (Advisory, Conciliation and Arbitration Service).
Are You Considering Hiring Staff For Your UK Business?
An Accounting Gem can guide you through the process – including the pros and cons – of staff recruitment.
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Speak with our friendly and knowledgeable team today by calling 01473 744 700 or email us at firstname.lastname@example.org and we’ll be in touch.