Going from Entrepreneur to Employer

It’s happened. Your startup has just been funded. You need to go from a group of visionaries who care deeply about the product to an employer.

Where do you start? How do you stand out?

Whilst it is attractive to work for a start up, you are competing with a mass of others trying to attract from the same very small talent pool. 

Almost everyone offers free lunches, beers on friday, pool tables and even ‘bring your dog to work’ day!

Get the basics in place


Ensure they are in the spirit of a good working relationship.  Let the tone be worded in a way which conveys the sprit of your business (instead of an overly legalistic draconian tone) but be very clear about: 

Hours: Be clear about core office hours and manage flexible arrangements locally. If output is more important than being at their desk for 9am, be clear about that in your handbook and your expectations. With a small team, it’s relatively easy to be flexible and give people the freedom to manage their own time but it gets more complicated as you grow and having everyone turn up at a time which suits them is not sustainable long term. So it’s important to include core office hours in your contracts to avoid issues later on.

Salary: Obvious point to include but also be clear about when deductions to pay would be appropriate e.g. for loans. Also be clear about when salaries are reviewed and how long you need to have worked to be eligible for a review. 

Bonus: anything included in your contract needs the employee’s consent to change so best to allow discretion in bonus clause wording.

Benefits: It’s now a legal requirement for businesses to automatically enrol all employees onto a pension scheme so it’s worth adding details into the contract. Keep the rest fluid as benefits may change with time.

Holidays: In the UK you are legally obliged to give employees a minimum of 5.6 weeks paid leave including bank holidays. You need to give part timers the equivalent pro rata. Be clear about whether holidays are inclusive of bank holidays or not.

Also be clear about the holiday year, whether days can be carried over and if so, any rules around the operation of this.

Data protection: You will hold personal data so in accordance with data protection laws, make that clear so the employee is aware and consents.

Confidentiality: You need to protect your commercial interests so ensure that you specify that everything the employee comes into contact with during their course of employment needs to be treated confidentially.

Notice period: Specify how long this is and the duration during the probationary period (if you include a probationary period). Dependent on role, the probationary period can be anything from 3 to 6 months. After 2 years of continuous employment, the notice needs to increase by 1 week per year up to 12 weeks maximum.

Post termination restrictions: Be clear about how you will protect yourself once an employee leaves your business by specifying how much time from their termination date needs to lapse before they can work for a competitor, poach staff, deal with suppliers or start their own business. 

People guidelines or employee handbook

A well defined set of guidelines/ expectations about your workplace is vital so everyone is clear where they stand. Yes, it’s not cool to have bureaucracy and people seldom read them but it’ s important that new joiners understand the full terms and conditions of their employment before they sign up and existing people know where they stand to avoid misunderstandings later on. 

You can make them as creative as possible and they should reflect your culture and founding values. 

They do need to outline your approach to confidentiality, working hours, dealing with poor behaviour, performance, complaints, business ethics, etc.

Paying market rate and stock options

It’s worth investing in some data to understand market rate for pay and benefits for your industry. Whilst money is a consideration, you can offer other things to make the package more attractive like time to work from home, a sign-on bonus, lots of opportunity to develop, stock options, tickets to conferences, etc. 

Pension Auto enrolment

It’s now a legal requirement for all businesses to automatically enrol employees in a contributory pension scheme. You need to do communicate this to them when they join and whilst they are employed with you. For more info, visit 

http: //www.thepensionsregulator.gov.uk/

Probationary periods 

If you decide to have a probationary period, be clear with people what they need to do within the first 3 or 6 months. Keep a track of progress and give regular feedback. If things don’t work out, at least both parties would understand why. 

Welcome newbies

You don’t need to do a formal induction, but it’s helpful for new people to understand your culture and ways of work as soon as possible so they can hit the ground running quickly. A team lunch is a great way to meet people, get them to spend sometime with one of the founding team so they learn the ropes quickly. Once you reach the 40+ people mark, a more detailed approach like time with each time would be useful. You are not a corporate company, so a light touch approach will work fine. 

Bonus schemes/ reviewing salaries

It’s useful to have a practice of when you review salaries, how long people need to be working with you to get a review and  you are open and transparent in communicating this so people understand. Pay is always a sensitive matter and you can create a culture of trust and openness by being very clear about these things. 

Ditto for bonuses. Many businesses don’t offer bonuses as performance can sometimes be difficult to measure. If you do decide to give people a bonus, be very clear about what criteria you will use to decide whether they get a bonus or not and keep the criteria objective and easy to measure. 

Now that you have the basics in place, you need to think about how you can make your workplace stand out as a great place to work.