Guide to hiring for employers

The Small Business Company

TSBC are the experts in small business - they help Government agencies, Banks, Accountants, Large businesses, & Industry associations deliver small business improvement tools to their own small business customers. www.TSBC.com

Hiring employees is one of the biggest decisions you can make in business. It can also be a time-intensive and costly process if you don’t get the hiring process right the first time.

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To make a decision that will serve your business well in the future, you’ll need to do a little forward planning to make sure you know exactly what you want and be clear about how a new employee will help you achieve your business goals.

Identifying your requirements

Before you rush out and start advertising, you’ll need to be sure hiring an employee is the right move for your business.
Things to consider:

  • How many hours will the role require? This includes whether the role will be a part-time or full-time position, permanent or fixed-term.
  • How much responsibility is required? This includes whether the role requires managing people (such as a team leader) or resources (accounts and budgets).
  • Does the role fit with your business plan – both short-term and long-term? This includes whether the role fits with your strategy and direction as a business. If you’re thinking about hiring a permanent member of staff, you should think about how the appointment could affect your future goals.
  • Do you have the budget to hire? You will need to be certain that you have enough money to hire another staff member. An employee on a $50,000 per year salary will cost $250,000 after five years.
  • Do you have the space to hire another member of staff? If taking on an extra staff member makes things a little cramped, you might need to think about expansion or relocation. This can be expensive.

The  Ministry of Business Innovation and Employment – Labour has created some useful resources for business owners who are intending to hire staff. The Ministry’s  describing and advertising the job page contains a handy Employment Cost Checklist for your reference, which lists the costs you’ll need to consider such as wages, overtime, leave and training expenses.

Once you have a clearer idea of where a new role will fit into your business plan, it’s time to think about the job description.

Full-time, part-time, permanent, casual or fixed-term employee?

Most minimum conditions of employment are consistent across all forms of employment, although there are some other factors to consider.

  • Fixed-term agreements can only be offered where there is a genuine reason for the fixed-term. An example could include a design firm that lands a big contract and needs to take on additional staff until the project is over. More information about  fixed-term employment is available on the Ministry of Business Innovation and Employment – Labour’s website or by phoning 0800 20 90 20.
  • Many people are referred to as casual employees when they are actually fixed-term or part-time workers. Casual employees are those who work only intermittently or on an irregular basis, and some different rules may apply. More information about  who is an employee is available on the Ministry’s website or by phoning 0800 20 90 20.
  • Special provisions for the payment of holiday pay apply for some fixed-term employees and for employees undertaking genuine casual work. More information about  holiday payments for some fixed-term and genuinely casual employees is available on the Ministry’s website or by phoning 0800 20 90 20.
  • There are additional requirements if your  employee is employed on a trial or a probation period.

Find out more by reading Types of employee.

Writing a job description

You don’t need to spend days creating a 100-page job description, but you will need to create a job description that is comprehensive and accurate. For prospective employees, your job description and advertisement say a lot about your business, so you should make them as professional as possible.

Having a comprehensive job description also makes it easier to form an employment agreement (which is required by law for all jobs) when you have found a suitable applicant because you will already know the hours of work and other details.

Your job description should:

  • identify your business, its priorities and objectives
  • outline the hours of work
  • outline the purpose of the position
  • be written at a level appropriate for the position you are filling
  • clearly identify the core tasks and responsibilities
  • describe who the person is responsible to and (if appropriate) who reports to them
  • describe any minimum legal, educational or experience requirements
  • describe ideal personal skills and attributes
  • set out your performance measures or expectations for the job.

The Ministry of Business Innovation and Employment – Labour has developed a handy job description checklist that you can use as a basis for your own job description.

Advertising the position

How you attract the best applicants depends on the job, how much money you’re able to spend on advertising, and how much time you have.

Options include:

  • Engaging a recruitment agency – this might appear costly, but an agency can reduce the amount of time you spend reviewing and short-listing applications, and can also help you clarify your needs, appropriate pay levels and levels of experience available and required.
  • Targeted advertising in industry journals, magazines and websites.
  • Listing the advert on sites such as  Seek,  Trade Me Jobs or  MyJobSpace.
  • Contacting an Industry Training organisation (ITo) or training establishment that deals with workers in your industry.

If you’re considering advertising overseas, read more about Employing workers from overseas, or contact the Ministry of Business Innovation and Employment – Labour’s  immigration service for information about visas.

When you prepare and publish an advertisement, you retain responsibility for what is said and you need to make sure what is said is accurate and non-discriminatory.

It’s also important to consider whether there are any procedures that must be followed in making a new appointment. Some private sector employers may have agreed to certain hiring obligations in their collective or individual employment agreements. One example would be a preferential re-employment clause applying to any employees who have recently been made redundant. Another example would be an agreement with staff that vacancies will be advertised internally as well as externally.

Receiving applications and interviewing

The easiest way to manage applications is to use an application form that can be downloaded from your website, posted to interested candidates or obtained in person from your premises. Many businesses also request that applicants complete a covering letter – these are a great way to screen candidates before going through the interview process.

When reviewing applications and interviewing, you’ll need to consider the privacy and confidentiality of all applicants. This could mean ensuring documents are filed away out of sight and not sharing information with other parties.

Points to remember when writing an application form:

  • Important questions can be included in the application form, such as asking what responsibilities an applicant had in previous jobs, and how they are relevant to the job you are trying to fill.
  • It can be used to obtain details of an applicant’s residency status and, where appropriate, the nature of work visas held.
  • The form can include a declaration for applicants to sign, acknowledging that they have provided all information relevant to the job and have not withheld any significant information. In addition, it’s a good idea to draw attention to this with each applicant you interview, so they understand the importance of the declaration.
  • The form can include a section for the applicant to sign to authorise you to contact referees and, where it’s a requirement of the job, to conduct a security check to ascertain whether the applicant has criminal convictions.
  • The form can explain key features of the hiring process being followed. For example, that the terms of any offer of employment will be those recorded in the written job offer. This can help to avoid problems with applicants later stating that binding verbal assurances were given during the hiring process.

When interviewing candidates for a position, it’s important to apply consistent criteria for determining who and how you interview.

Approaches may include:

  • a one-on-one discussion
  • an interview panel
  • a written project or examination
  • skills and/or attribute testing.

The approach you take should be applied to all applicants you interview to ensure consistency, and applicants should be advised of this when you set up the interview.

When you appoint someone to the job, your comments at the interview may be relied upon at a later time so be clear and concise.

To avoid making unintended commitments or assurances, it is important to have developed answers on:

  • the process to be used after the interview
  • the likely range of employment conditions.

Selecting and appointing

At this point, you will either have a good idea of who the right candidate for the job is, or have a few options to consider.

If you have a few applicants to choose from, you should consider the following.

  • Relevant experience. Will the applicant be able to pick the job up immediately, or will they need considerable training?
  • Personality. Do you feel you will get along with your applicant? You don’t have to be best friends, but it’s important to hire someone who will get along well with team members and others within the business.
  • Attitude. Do you feel the applicant is passionate about the job? This doesn’t mean instantly hiring the applicant with the most extroverted personality, but you should be able to sense if an applicant has the right attitude.

You’ll also need to ensure the employee is entitled to work in New Zealand.

People entitled to work in New Zealand are those who:

  • are New Zealand or Australian citizens (including people born in the Cook Islands, Niue and Tokelau)
  • have a New Zealand residence visa
  • have a New Zealand work visa or a condition on their New Zealand temporary visa showing they are allowed to work here.

Work visa conditions should be checked. Some visas allow only certain types of work, or work for specified employers. An employee is not entitled to work here just because they have a tax number.

 VisaView allows employers to confirm an employee’s work entitlement. Read Employing workers from overseas for more information.

You can contact the Ministry of Business Innovation and Employment – Labour’s immigration service on 0508 55 88 55 (outside Auckland) or 914 4100 (from the Auckland area) for more details, or visit  Immigration New Zealand.

Writing an employment agreement

It’s a legal requirement that you write (and retain a copy) of an employment agreement that is a legally binding document protecting both you as the employer and your employee.

There are certain basic elements that must be covered in individual employment agreements – these are outlined in the Employment Relations Act 2000. There are also minimum legal rights that apply (such as holiday pay) which neither you nor your employee can agree to reduce.

You can offer a trial period for new staff, but they will need to agree to this as part of their signed employment agreement before they start work for you. If you verbally acknowledge a trial period but omit it from an employment agreement, the trial period has no effect.

Find out more about employment regulations.

You must give the employee the opportunity to seek advice, and consider and reply to your offer, and you must consider and reply to any response they may make to the offer. Once you have met those requirements, the range of payment or conditions you are willing to offer is likely to be driven by:

  • the profitability of your business
  • the provisions other similar employers are offering
  • the special circumstances in your region or area
  • the availability of skills in the industry
  • your policy on retention and development of employees.

The Ministry of Business Innovation and Employment – Labour’s  Employment Agreement Builder can help you develop your own employment agreement. Read what to put in employment agreements for further assistance.

Find out more about about managing staff.

 
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