Growing a Business Employ Staff
The ABC of employing someone
You need to assess if the cost incurred in employing someone is justified and if there is sufficient work to sustain an employee. Begin by referring to your sales performance for the past year and your sales projection for the next 12 months. If the sales trend indicates consistent business growth, calculate if there are sufficient funds being generated to cover an employee’s wages and maintain reasonable business profitability. 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.
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 on board 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.
B) Find out your legal obligations: Payment of workers’
compensation insurance and superannuation contributions are compulsory for
employers. For further information contact Workcover, Tel: (08) 9388 5555.
The Australian Tax Office (ATO) will provide information about superannuation
contributions for employees, Tel: 13 10 20; and PAYG withholding tax, Tel:
13 28 66. For information about State employment awards, contact Dept of
Consumer and Employment Protection (DOCEP) www.docep.wa.gov.au,
or Wageline, Tel: 1300 655 266.
C) Work out hours and rate of pay: Contact DOCEP to find
out about the appropriate state award rates for employees.
The Small Business Development Corporation (SBDC) and DOCEP have publications covering a range of human resource issues. See the list of books available from the SBDC online bookshop: www.sbdc.com.au, and you can ring the BILC Tel: (08) 9220 0235 to have them send out an “employer obligations pack” by mail. The SBDC also has a workshop especially for first time employers – Employment Today. For bookings, Tel: (08) 9220 0234.
If you are not ready to employ someone full time, consider casual or part-time
employees. Other options are 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. This may change your business structure so check your legal
obligations.
