Kathryn Walters
Posted on 30 Jan 2020

Employment considerations for new businesses

How to attract employees to the business

In any competitive industry, it can be difficult to attract the best people. This is particularly the case for start-ups and new businesses without an established reputation in their respective marketplace. Understandably, employees feel nervous about the potential risks and uncertainties that working with such businesses might bring.  Often, the bigger, safer option prevails.  To coin a well-known (if a little outdated!) phrase from the trading floor…"no-one gets fired for buying IBM".  Sometimes, playing it safe is more appealing than walking the path less-trodden.

With this in mind, how can start-ups and entrepreneurs buck the trend and attract the best candidates?  With Millennial and Gen Z employees now placing greater emphasis on culture, sustainability and non-financial benefits, there is an obvious opportunity for any new business to establish and promote these values in an effort to appeal to those people looking for 'something more'. 

How should your start-up look to put these values into practice?  With regards to sustainability, think about how this can be ingrained into the business culture and working practices.  For example, does the business offer a cycle to work scheme; do you only use recycled paper; is the office canteen plastic free? Intelligent Hand Dryers has taken it one step further by announcing plans to discipline staff who bring single use plastic to work.  This might feel like a step too far for some people, but it will undoubtedly speak to some potential candidates.  Think about what your business could be doing to stand out from the crowd.

Consider other non-financial benefits, which are becoming increasingly important for employees when deciding where they choose to work.  These can be relatively inexpensive for the business (and, in some circumstances, can actually result in significant cost savings). For example, does the business offer agile working; are all employees encouraged and supported to work flexibly? Is it possible to offer an extra day's holiday for birthdays? Timpson offer their employees the use of a limousine, an extra £100 and a week off work when they get married.  This is just one of many reasons why they are viewed by so many of their staff as an inspiring employer.  What can your organisation offer to demonstrate the value that you place in your employees?

In terms of career development, which might seem limited in a small organisation, can you provide additional training or leverage your professional contacts to provide an external mentor programme for employees? Could you make a contribution to training costs to help them acquire and develop new skills (including a contractual repayment clause where appropriate)? 

There may be innovative ways in which you could train your employees. For example, Walmart use Virtual Reality technology to train staff on how to spot hazardous situations during Black Friday sales. While VR is expensive, and is perhaps out of reach for most start-ups, it is a good example of how training does not have to take the usual form of courses and classes.

Mental health and wellbeing is a hot topic at present. If your business is seen to promote this in the workforce, it will inevitably help you entice the best people. Employees really value an employer who authentically encourages and supports a positive work/life balance.  Where employees can demonstrate that they can be relied upon to do the job, allowing them the flexibility to undertake work in a way that better fits their lives can help ensure that you obtain the best from, and have a happy, and loyal workforce. It doesn't cost you anything to build a culture of trust and transparency at work and smaller, more nimble, businesses can potentially steal a march on their larger, more traditional competitors in this regard.

If your start-up cannot afford to support and offer increased maternity, paternity or shared parental leave benefits, there are less expensive alternatives which can be offered, all of which still show your employees that you recognise their family commitments. One such example might be to host a Christmas or Summer party for your employees' children and families. CA Technologies provide on-site day-care for employees; another way of offering employees the help they need. Holiday Extras hire out a cinema each year to offer a free film showing to all employees and their families.

Another option may be to introduce an employee share scheme or a profit sharing scheme. If employees share in the success of the business, this could be an incentive for them to give their best.  Having 'skin in the game' helps people to feel personally invested in the organisation.

Protecting your business

Attracting the right people is extremely important to every business, and the importance of establishing a positive and engaging culture should not be underestimated.

However, there are other considerations in play.  As an employer, you will need to ensure that your business is adequately protected when employing or engaging staff, and getting your house in order at the outset is far easier than addressing this issue further down the line.

Having adequate and properly drafted employment contracts, staff handbooks and policies is the best way to protect your business.  We would always recommend that these are prepared specifically for your organisation – 'off the shelf' versions may not contain all of the protections you need, may not be suitable for your business, and may not embody your culture.

The employment contracts are particularly important.  The risk to start-ups of a key employee leaving and damaging the business are significant, but these can be addressed in the contract.  It is prudent to include bespoke provisions to protect your business's intellectual property rights and confidential information, particularly if you are operating in a niche or growth sector.

You may also feel it appropriate to restrict the competitive activities of former employees, perhaps in respect of their dealings with your confidential client base.  These 'covenants' are often difficult to enforce, however, and should therefore be bespoke and appropriate to your business and to the role of the particular employee.

It is important to note that there is not a 'one size fits all' for employment contracts, and we would advise that you obtain specialist employment advice in order to protect your business.

Please do not hesitate to contact Kathryn Walters or Rachael Lloyd in our Employment Team for further advice and assistance.