Growing Your Business
employ staff
The ABC of employing someone
As your business grows, you may need to employ someone. Before you do you will need to assess whether the cost incurred is justified, and if there is sufficient work to sustain them. It would not make financial sense to accept a contract that would increase your workload and make it necessary to employ someone, when the financial outcome was simply break-even, or worse, a loss.
Once you have assessed the need, and the cost (award rate and on-costs for the new employee), incorporate it into your cash flow forecast to see if your business can accommodate the additional regular outflow of money. If your calculations support taking onboard a new worker, here are the suggested steps to follow:
A. Write a job description:
Identify and write down the duties and responsibilities of the position,
and the skills, expertise, and experience that will be required to do the
work. The SBDC has several publications
available from its bookshop with examples of business letters and documents.
B. Find out your legal obligations: Payment of workers’ compensation insurance and superannuation guarantee charge is a compulsory for employers. For further information contact Workcover, Tel: (08) 9388 5555. The ATO will provide information about superannuation contributions for employees, Tel: 13 10 20; and PAYG withholding tax, tel: 13 28 66, or online. For information about State employment awards, contact the Department of Commerce, or Wageline, Tel: (08) 9222 7700.
C. Work out hours and rate of pay: Contact Department of Commerce to find out about the appropriate state award rates for employees.
The Small Business Development Corporation (SBDC) and Commerce have publications covering a range of human resource issues. See the list of books available from the SBDC online bookshop.
Alternatives to engaging full time employees, are: casual or part-time employees, sub-contracting parts of your work; using someone from a labour hire firm; using an agent; or bringing a partner into the business who can share the workload, and/or contribute to working capital requirements.
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