Transitioning from employee to employer can be a daunting. As the Nigerian economy continues to grow, more business startups are appearing on the scene, mainly thanks to young Nigerians pursuing entrepreneurship. For these budding entrepreneurs, a key decision they must make at some point in their business life is when to make their first hire. Becoming an employer for the first time takes some adjustment; the role comes with its own set of rules, guidelines and expectations. However, a great place to start is by asking yourself a few simple questions to guide you on whether your business is truly ready to become an employer and worthy of attracting the best talent on the market.
Can Your Finances Handle It?
When making the leap from employee to employer, you become responsible for decisions – good and bad. This includes the financial aspects of employing people in your business, including a monthly agreed upon wage, the provision of job benefits like retirement plan and the payment of PAYE, Income Tax and Social Security for each employee. For social security, employees are required to contribute 8 percent of their salary. New employees are also required to register in their individual states as either self-employed (contractor) or as a payee agent with their employer. Depending on the working contract you intend to offer, you should be aware of which option applies and the relevant process of registration.
For first time employers, you will also be required to secure insurance coverage for any worker you choose to hire. While some are mandated by law, others are optional, but can make a competitive package when recruiting fresh talent. Therefore new employers should aim to include the cost of workers comp premiums in their immediate recruitment expenses and annually after that. There will also be the costs of recruiting the perfect employee or replacing employees that leave over the course of your business. This can increase substantially according to the number of employees you plan to hire. Past studies and surveys have shown that businesses typically pay 20 percent of an employee’s annual salary to replace them, so making the right hire the first time is not only vital to your business operations, but influential on your bottom line as well.
Are Your Employee Management Skills Up to Par?
Becoming an employer is about much more than being able to afford the monthly wages of a workforce or having the demand for additional labor. You must also be well equipped with the right management skills, such as communication, and time and people management skills. As a new employer and leader, your workforce will look to your for guidance, direction and motivation – something you must be able to deliver if you want your company productivity to soar. Therefore, before hiring your first employee, take the time to assess your people management skills. Are you good at communicating and delegating? Can you calmly handle conflict and confrontation in the workplace? Is the relinquishing of control a worry for you? If the answer is no to any one of these, opt for a quick refresher self-development management course online, or enroll yourself in management classes at your local university campus.
Is Your Business Safe And Welcoming For An Employee?
As well as providing the right remuneration package for your employees, your business place must be prepared to welcome them. This means ensuring you have adequate equipment and space for them to properly perform their job duties, along with ensuring that the relevant health and safety standards are met. In accordance with the provisions of Factories Act and Labor Law, employers must provide a safe workplace and take adequate measures to ensure the safety of the worker when in their employment. This includes providing the right equipment free of malfunctions, ensuring the cleanliness of the workspace and ensuring workers are not exposed to hazardous situations such as explosives. Failure to do so places you at risk of a wrongful suit and employee blame should a workplace accident occur. In addition, providing a safe and welcoming work environment for your employees promotes their productivity, which benefits your business’ goals.
Like any other decision when running a business, hiring your first employee requires some forethought. Not only do you want to be sure your business can afford the move to becoming an employer, but you also want to be certain that your leadership skills can as well. So, it is worthwhile asking yourself these three simple questions before launching yourself into the world of being an employer and all that comes with it.
