By Helen Scullion Assoc. CIPD | 5 min read
There’s a moment many business owners describe in almost the same way. You’ve built something. It’s working. But you’ve hit the ceiling of what you can do alone.
Taking on your first employee is the obvious next step. But it’s also the moment you go from running a business to being an employer, and that changes things in ways that are worth understanding before you advertise.
This is not a reason to hold back. It’s a reason to go in prepared.
Why the first hire feels different
When you’ve been working alone, every decision is yours. You carry the risk, but you also have total control. Bringing in another person means sharing the business with someone, setting expectations, and taking on legal responsibilities you didn’t have before.
For a lot of sole traders, that’s genuinely daunting. Not because they doubt the person they want to hire, but because employment law can feel like a different language when you’ve never needed to speak it before.
The good news is that the foundations are simpler than they look. And getting them right from the start is far easier than retrofitting compliance after the fact.
What you legally need before anyone starts
As a first-time employer in the UK, you must register with HMRC before your first payday, provide a written contract of employment from day one, check the employee’s right to work, take out employer’s liability insurance, set up payroll and auto-enrolment, and have core HR policies in place. From April 2026, several employment rights also apply from day one, including statutory sick pay.
Think of these as the licence to employ. You wouldn’t drive without passing your test. The same principle applies here.
The documents you need
A contract of employment
This is the legal cornerstone of the employment relationship. It must cover pay, hours, holiday, notice periods, probation, and the nature of the role. It should also cover confidentiality, particularly important for businesses where knowledge of clients, processes, or pricing is sensitive.
Core HR policies
You are legally required to have disciplinary and grievance procedures that align with the ACAS Code of Practice. Our Disciplinary Policy for Small Organisations and Grievance Policy templates are a practical starting point. Beyond the legal minimum, a health and safety policy, sickness absence procedure, and data protection policy will cover you in the situations most likely to arise in a growing business.
A job description and hiring process
Before you advertise, document what you’re looking for and how you’ll make the decision. A Recruitment Policy and consistent, fair recruitment process protects you from discrimination claims and makes it easier to hire the right person.