Sustainable Business/Choosing your team


This section is about planning what kind of staff you want and how you will recruit them. Once they have joined your business, the plan also requires you to think about how you will motivate them and retain their services.

Deciding to employ staff is one of the most important decisions that a small business owner can face because:

  • a full-time employee represents a significant business investment
  • recruiting and selecting an employee can take considerable time and effort
  • once chosen, a staff member becomes an integral part of your business. Therefore hiring the right person for the job is critical. If you select the wrong person, rectifying the mistake can be time consuming and expensive.

The recruiting stage

Creating a job description

Ideally the job description should only be written after the needs analysis has been completed. A comprehensive job description should cover the following:

  • job title
  • name of the employee’s immediate superior (this will typically be the owner but it is an important point to clarify). For example, if you have a partner, to whom does the staff member report?
  • employee’s subordinates (if any)
  • job description and its major objectives. For example, if it is a sales position, what sales targets are required?
  • key tasks and activities of the job.
  • what physical resources are required for the employee to complete their tasks? For example, will a desk and phone be required?
  • results and the standards required for each task. For example, what degree of accuracy do you require from a person responsible for generating invoices? This information will help you later when you come to establish the degree of experience and skill you require of the candidates for the job.
  • how much authority will the employee have. For example, if they are in charge of purchasing, what is the largest value they can order without consulting you? Or if they are negotiating discounts with customers, how much are they allowed to discount before they have to consult with you?

Analyse these activities in detail. How much time will they actually require to do their job? Does the answer really amount to a full-time job? Or could the tasks be split into two part-time jobs? Will your business improve through creating this job, or would it be better to halve the number of activities and take on a part-time person instead? (Or should you out-source the work to another company?)

Answering these questions might seem laborious, but in fact this exercise is one of the best methods for testing the feasibility of your plans and is well worth the effort.

The Department of Labour’s Employment Relations website offers you much useful information to help you build an employment agreement.

Conditions of employment

Having completed your needs analysis and job specifications, you are now in a position to complete the following details:

  • Employment agreements and hours of work for all staff
  • Basic wage or salary rate and when payable
  • Fringe benefits, holidays, bonus and overtime rates
  • Time off, sick leave, superannuation
  • Training, promotion and performance appraisals
  • Dismissal and grievance procedures
  • Retirement policies
  • Employment Relations Act rights, such as the role of unions
  • Health and safety information and conditions.

Establishing what to pay staff is always difficult, though there are minimum wage guidelines. We would encourage you, however, to pay as much as you can afford. Local employers’ associations carry out an annual salary and wages survey and make this information available to members. This information will help you to arrive at appropriate wage or salary levels for particular jobs.

Detailing the person specification 16

A person specification lists the qualities you require for a specific position in your business. The person specification speeds up the selection process by helping you to match applicants to the position.

The following five headings will assist you to select potential employees.

  • Physical requirements: the person must physically be able to complete the work.
  • Qualifications: the job (such as computer programming or electrical wiring) might require a person who is properly qualified for the tasks.
  • Special aptitudes or skills: these might include numeracy, literacy and computer skills.
  • Personal characteristics: people and relationships skills. These may be important if the employee is to deal with customers or be part of a work group.
  • Specific circumstances: for example, willingness to travel frequently away from home.



The recruitment stage can be a critical, especially if you have never hired someone before. Therefore it is well worth your while spending some time researching how the selection process works and detailing how you intend to recruit staff. It is important that your recruitment process is professional as this will reflect on your business.

There are various ways of advertising for a new staff member. You may decide to advise the position in national newspapers, internet job sites, community newspapers or trade journals.

If you intend to advertise, make sure the advertisement accurately reflects what you are looking for. If you have not written a job advert before, find someone who has experience and ask them to help you.

Alternatively, it is often worth speaking to your contacts, such as staff, friends and family, industry contacts to see if they know of anyone who may be suitable. It may also be beneficial to approach, educational institutes and employment agencies and recruitment consultants to assist in your search.

Employment incentives

Several Government programmes and some local councils offer incentives to employers. Make full use of these benefits where you can, but do not let the immediate dollar rewards blind you to the job you have described or the skills you want. Poorly chosen staff will cost you more in the long run.

Selecting the right person for the job


You should plan how you will select a suitable person, for instance, what techniques will you use to ensure that you choose the right staff member?

Application form and Curriculum Vitae (CV) 17

Ask all applicants to fill in a basic application form and supply a CV. A photo is also useful in helping you to remember each applicant. You need information from four basic areas:

  • Personal details
  • Education and training
  • Employment history
  • References.

Armed with the completed application form and CV you should now have enough basic information to screen out unsuitable applicants before you grant interviews.

The job interview

Before the interview it is a good idea to write down the questions you will ask each applicant, ensuring you have covered all areas outlined in the person description. Your aim is to find out how well the applicant fits the description.

At the beginning of the interview it is a good idea to outline for applicants how the interview will be structured, and explain that they will be given time to ask their own questions during the interview process..

It is also worth remembering, when you employ a person for the first time there is always a trade-off between paying a lot of money for someone who is well trained or paying less for someone who needs some training. Another consideration is that if you decide to train someone you have a better opportunity to train them in the culture of your business. I

If you do select someone who has many of the attributes you are looking for but does not have a particular skill you require, consider whether they could be trained. Your training options might include:

  • choosing a ‘buddy’ from existing staff to help train them on the job
  • sending them on a course (carefully checked first to ensure it will teach the skills you require)
  • hiring an expert for in-house training
  • teaching them yourself.

The motivating stage


Your ability to manage and lead your staff will dictate the success of your team plan. It is your ongoing role to ensure that a high level of motivation and enthusiasm is maintained so that staff perform at the highest level.

If you lack experience as a manager, having to lead and manage staff for the first time can be stressful. It is important that you assess your own management skills. Do you require more training? Be honest with yourself and if necessary take advantage of the management courses that are available to you.

Why train staff?

There are excellent reasons for training staff and considerable research exists to show that successful businesses invest more in training than their less successful competitors.

In particular, training:

  • ensures staff can perform their jobs
  • keeps staff interested in the job
  • keeps staff focused on the needs of the customer
  • stops bad habits developing
  • prevents failures, accidents and injuries
  • keeps staff in touch with new technologies
  • earns the business more profits.

Plan your training for the next year. It is essential that the training be ‘locked in’, so budget time and money for staff to leave work and attend courses.

Establish what learning objectives you want the staff to achieve. Outline these to the training provider and plan to use the new skills in the job. Many training programmes are unsuccessful because the new skills learned are not immediately used in the job and repeated over time. Therefore follow up all training to ensure that skills learnt are actually applied in the workplace.

Performance appraisal

Regular feedback is essential

A regular performance appraisal is a useful tool for keeping your staff motivated. Staff always want to be told when they are doing a good job. Plan regular interviews where you discuss with each employee the performance objectives set out in the job description.

If during this interview you discover the staff member is carrying out duties that are not in their job description find out why. The job description may need revising.

It is important that you keep up regular performance appraisals because this planned approach is a far more effective way of addressing issues than trying to sort out problems that have been allowed to develop over time.



The loss of a key staff member can have a dramatic effect on your business. It can be difficult for a small businesses to retain staff because it is not always possible to offer someone a career path. Simply increasing someone’s salary does not always mean you will retain the services of that person. Simple things, such as giving employees more control over their own work, can have an enormous impact.

Another technique is to involve staff in the planning of the business. This will increase their interest and commitment.

Employees like using a variety of skills and like and like to know that their work is important and meaningful. The more you can design their jobs to allow this to happen the greater your chances of retaining them.



If you do have to dismiss staff, or make anyone redundant, you should be aware that there is a right way and a wrong way to go about the process. The right way involves following certain definite steps. Instant dismissals are particularly dangerous even in cases such as theft that might seem clear cut. A lawyer could put a quite different interpretation on such actions in court. If you make mistakes, you could end up fighting a personal grievance case that could cost your business much wasted time and money. So always get expert advice before you consider action to dismiss staff.



This is unlikely to be an issue in new businesses, but managers of existing businesses should be aware of changes in this regard. Seek expert advice if you are in doubt.



Employing staff is often the most satisfying part of being in business. Giving meaningful employment and seeing people achieve their true potential is one of the best aspects of operating a business. Staff are important assets and should be treated as such. They are the means through which you will achieve success.

Some familiarity with the Employment Relations Act will be of great benefit to you in your relations with staff. For basic questions about the Employment Relations Act, visit the Department of Labour’s website or phone the Employment Relations Infoline on 0800 20 90 20. This service doesn’t replace expert advice, but is a useful adjunct to it. There are some good articles and FAQ (Frequently Asked Questions) sections.

Also check the government’s business portal or for details of Enterprise Training workshops on employment topics in your area.

Future thinking


Work habits in the future are likely to change, driven both by changing lifestyles and the need to accommodate employee expectations. To attract quality staff, here are some of the factors you may need to consider:

  • more employees in future will want to work from home
  • more may want more flexible working hours so they can fulfil other family or caregiving tasks
  • you may also want to employ part-time workers
  • you might want employees to be more available outside working hours

Steps you can take accommodate these changes include:

  • enabling workers to work remotely. For example, install a server in your business so that both employees and you can access centrally stored
  • providing key employees with laptops or remote working devices such as PDAs or Pocket PCs
  • paying for a home broadband connection so the worker can stay connected and productive

Note that technology can have a positive affect on your business and productivity. For example, enabling sales people to access the latest stock levels or your product prices remotely can improve their ability to perform away from the office.

Some of these changes may impact on your start-up or operating budgets, so remember to include them in your financial planning.