From start-up to fast-growing business: getting to grips with becoming an employer

20.05.24 12:27 PM Comment(s) By Alicia

If you are thinking about employing staff, your business is obviously doing well and growing.

Hiring staff is an exciting next step for any aspiring company. It may be that you have secured a large contract and need a lot more help, your workload is becoming too much for you to manage alone or you are joining up with other specialists in your field to start a new business.


Setting up as a company and employing staff brings new responsibilities. There are laws which mean offering basic financial benefits, such as a work-based pension scheme to your new employees. If you are a small start-up business of highly skilled employees who produce significant sums in turnover, you may also need to offer an attractive benefits package to be able to secure the right staff to join your team.


Whilst you would typically register as an employer and set up a payroll system with the help of your accountant, other elements, like setting up a pension and benefits plan are usually done with a financial adviser.

Pension Schemes

The Government is keen to get everyone saving for retirement, which is why, by law, all employers must offer a workplace pension scheme in order to meet their pension auto-enrolment obligations. By ensuring all working adults have access to a pension scheme, it is hoped that more people will save for their future actively and have a retirement which is more financially secure.

Offering your staff a pension scheme which meets all the legal criteria may sound complicated, but once you have a plan in place and someone to help you manage it, it becomes  straightforward. You are then on the right track to go forward and grow your business as an employer.

A work-based pension is a scheme that the employee, the employer and the  government can all pay into. You must automatically enrol your new employee into the plan and make contributions to their pension if they are eligible, this means if they are:

•  classed as a worker

•  aged between 22 and State Pension age

•  earn at least £10,000 per year

•  usually (‘ordinarily")work in the UK

If your employees do not meet the above criteria, they should still be given the option to join the pension scheme if they want to, and as an employer, you cannot refuse. You don’t have to contribute if they earn these amounts or less than £520 a month, or £120 a week or £480 over 4 weeks.

As an employer, once your staff are enrolled you must:


•  pay at least the minimum contributions to the pension scheme on time - usually by 22nd of each month

•  Allow your employee to leave the pension scheme (called ‘opting out") if they ask, and refund the money paid if they optout within 1 month

•  Let your employee rejoin the scheme at least once a year if they have opted out

•  Enrol your employee back into the scheme at least every 3 years if they have opted out and are still eligible for automatic enrolment

Employee Benefit Schemes

Even if you are a small start-up business, it may be that you are aiming to attract highly skilled employees who will expect both an attractive salary and a range of benefits. Group protection and benefit arrangements can be structured to provide different levels of benefits for senior employees. Benefit plans can include:


•  Group life assurance

•  Group income protection

•  Group critical illness cover

•  Group private medical cover

•  Group dental insurance

•  Health & opticians cash plans

Benefits can be structured to meet your business’s bespoke needs. Whether this is being paid by the employer, which is normally the case for core benefits, or by the employee under a flexible or voluntary benefits arrangement for additional benefits. Flexible benefit schemes allow employees to vary their pay and/or benefits package to reflect their own requirements. They differ from voluntary benefit schemes where employees pay for extra benefits.

Business Protection Plans

As your company grows, which can happen very quickly, one of the key roles of a financial planning partner is to safeguard the continuity of your business by protecting those who look after it.


Your employees can be your greatest asset, particularly if you work in a specialist field and losing someone important to your business is a risk worth addressing. You can build in business protection cover to off set that risk. This can include:


•  Key person protection, in case a key individual dies or becomes critically ill

•  Shareholder protection, in case a partner or shareholder dies or becomes critically ill

•  Relevant life insurance, tax-efficient life insurance for employees and directors

•  Business loan protection, to cover any business debts


Typically, a financial adviser will take a practical and objective view of the business risks you face. For example, if one of your shareholders or partners died or became incapacitated, usually their shares would pass to their beneficiaries. That could disrupt your business and leave you without enough capital to buy back the shares and regain control. But with shareholder protection, you’d get a lump sum to help cover the cost of buying back those shares.


Similarly, if you are a director and become sick, a protection policy can extend to both salary and dividend payments, so you can focus on getting well and returning to your rolewithout other financial burdens or anxiety. You may also want to provide directors or employees with private medical insurance. We can search the whole market to find a solution that keeps both your business and your people healthy and thriving.

Past performance is not a reliable indicator of future performance.


The value of an investment and the income from it could go down as well as up. The return at the end of the investment period is not guaranteed and you may get back less than you originally invested.


If premium payments are not maintained, the benefits of the plan will be put at risk. If premium payments cease altogether, the benefits of the plan will cease. The cover may be less than you need if you do not review it regularly.


All information correct at time of writing.

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