HR basics for small firms looking to build a team

  • 05 Apr 2022

By Ben Gateley, CEO and co-founder, CharlieHR

HR can be a difficult area for small business owners to get to grips with but it is an essential part of running a business that employs people. The following outlines some of the most important compliance issues SMEs must adhere to when building a team, along with some suggestions to help develop your own unique company culture:

Don’t scrimp on employment contracts

One of the most common HR mistakes for early-stage start-ups is to take an approach which is far too casual when it comes to employee contracts. For people’s jobs and livelihoods, it’s important to use contracts drawn up by a professional – that way you are protected from, at best, misunderstandings and, at worst, full-blown legal battles.

On the other hand, businesses can nail the legalities required in a contract but forget to make it easy to read – if you can’t understand it, how will employees? Make sure your employment contracts are drafted by a human resources expert and tailored to your unique context, whatever the size of your business.


You must have at least three HR policies

When it comes to compliance, there are three HR policies which are mandatory for you to have in place once you take on team members. These policies include a health and safety policy, a disciplinary and dismissal policy, and a grievance policy. You are breaching the law if you don’t have these in place and they provide an important protection for employers – you could be setting yourself up for significant financial loss if something goes wrong.

Your legal employer responsibilities

The fact you have just started up won’t excuse you from your legal responsibilities, once you become a UK employer and take on staff. These laws protect not only your people, but also your business from costly issues in the future. A crucial initial checklist includes:

  1. Right to work documentation

You must keep a record of your employees’ Right to Work documentation – a passport scan is sufficient for team members from the UK. Gathering the right paperwork for nationals from other parts of the world is more complex, but you can find a complete list of the documents you will need to collate on the government website.

  1. Employers’ liability insurance

This insurance will cover you if an employee becomes injured during their work with you. You may never need to draw on this but if something happens and you aren’t covered it could cost an eye-watering £25,000 a day!

  1. Workplace pension

Since 2008 and the passing of the Pensions Act, all employers in the UK must provide employees (with qualifying criteria) with a workplace pension and make contributions to it. Make sure you are fulfilling your pension responsibilities by visiting The Pension Regulator website at

Develop an efficient onboarding process

With almost 30% of new hires leaving within the first 90 days, developing an effective and motivating onboarding process is critical for those joining your team. By providing the right training and resources for new hires they will not only feel welcomed but in control and equipped. Here are some essential ingredients to any onboarding process for new starters:


  1. Documentation checklist

You will need to compile the same basic information for every new starter, so it is sensible to develop a checklist you can simply run through. Without systems in place to support due diligence, you run the risk of not only creating unnecessary inconvenience (such as when new starters need to go on an emergency tax code) but of breaking the law – such as failing to complete the necessary Right to Work checks. Your checklist should include:

  • Address
  • Next of kin
  • Contact Details
  • Passport or another form of identification
  • New starter form
  • P45
  • Bank details
  1. Develop an onboarding programme

Ensure you and your managers have an onboarding plan which starts before their first day. Make sure your new hire’s laptop is set up and essential applications are ready to go before they start.

Plan the first day so the new starter can be taken through your company’s systems and documentation. Set a timeline which includes the knowledge and training that will be shared over the first week.

It is also a good idea to set milestones so how the new starter is doing can be assessed – this will help with any probation-based conversations which may need to be had. Ensure the programme includes meeting the wider leadership team. This will avoid them feeling siloed and provide the business’ broader context.

Create a company handbook

Codifying ways of working and company policies is essential to help set and maintain the culture of a company but it will also save you time. Your handbook should include your health and safety policy, disciplinary/dismissal policy and grievance policy but also the policies which help define your culture, protect your team and help you scale your business.

Policies could include your parental leave policy, your approach to flexible working, your commitment to diversity and how you support employees’ mental health. They are any written guides that set out your teams’ norms and processes.

Related topics