Companies in the UAE cautious on new job hires
Companies in the UAE cautious on new job hires Image Credit: Gulf News

As businesses rebound after a pandemic-induced economic slowdown, many nascent stage businesses will reach an important milestone: hiring their first employee.

However, before taking this step that is crucial to any start-up’s growth trajectory, here is a checklist of what business owners should primarily do or ask themselves.

Is your business currently ‘at capacity’ with available staff?

Firstly, it’s essential that business owners or entrepreneurs look for signs that your business can't move forward without assistance. Only then should a business hire staff, here’s why.

If you're personally ‘at capacity’ and receiving more orders than you can handle, it may be time to hire someone, explained Phelan Spence, a services and financial analysis associate at US-based ‘JumpStart’, a firm that works with entrepreneurs to launch their businesses.

What does it mean for a business to be ‘at capacity’?
If your business has exhausted all of its available options and it is currently working at optimum level with the resources in hand, it means the business venture is working ‘at capacity’ and requirement new investment to grow. It is derived from the business management principle of ‘maximum utilisation of available resources’.

Hiring may also be on the horizon for business owners who are missing deadlines, fielding customer complaints or thinking about taking on a big project.

Picture used for illustrative purposes only. Image Credit: Supplied

Is your business cash flow steady enough to support staff salaries?

Before hiring full- or part-time employees, your cash flow should be steady enough to support regular employee salaries.

Business owners need to plan for expenses beyond wages, including insurance and taxes (if applicable), and, in many countries, workers' compensation (explained below), with benefits like health insurance adding to additional costs.

(Workers' compensation or workers' comp is a form of insurance providing wage replacement and medical benefits to employees injured in the course of employment in exchange for mandatory relinquishment of the employee's right to sue his or her employer for the tort of negligence.)

UAE’s Wages Protection System (WPS): Explained
In 2009, the UAE introduced the Wages Protection System (WPS), a mechanism that ensures that those working in companies in the UAE are paid fully and on time.

The system, developed by the Central Bank of UAE, allows the Ministry of Human Resources and Emiratisation (MOHRE) to create a database that records wage payments in the private sector to guarantee the payment of agreed-upon wages.


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Can bringing in a new employee help your business generate more revenue?

At the same time, bringing in a new employee can help you generate more revenue by expanding your capacity.

Spence added that metrics like average monthly sales and average revenue per sale can help you understand how hiring someone will affect your finances and when it's time to take that step.

“(Hiring is) not necessarily tied to a date - it's really tied to hitting that number of customers or number of projects or products or services,” Spence further noted.

Should you seek professional help with the hiring process?

Outside experts can help you navigate the hiring process. That team might include a lawyer, bookkeeper or accountant and a HR (Human Resources) consultant.

“Make sure that you get the advice of a professional to kind of lead you along the way,” said Angel Washington, owner of US-based medical billing and coding business ‘Consult 2 Code’. “You just want to make sure you do everything right from the beginning so you don't have to go back and fix things.”

Expert advice can help you stay compliant with employment law, like understanding when you can hire independent contractors and when you need full-time employees, and making sure new hires fill out the necessary legal contracts.

The Embassy of India has warned expats in the UAE to report any delays of salary payment directly to the missions in Abu Dhabi or Dubai. Image Credit: Agency

Is it also time for your business to set up a payroll and accounting systems?

When a business owner hires a new employee, they need to gather certain documents for legal reasons. And when they pay that employee, they need to deduct money for insurance and other payments.

“When you're at this stage, it is really important to start thinking about your systems and invest a little bit of time and energy in your systems,” added Spence.

Those systems could include payroll software, most of which can automatically withhold funds from salaries or monthly income, or accounting software, which you can use to keep your finances organised as your business grows.

Why is the first employee hire a crucial decision in business management planning?

Your first employee is the first person that you are entrusting your vision to, said April D. Halliburton, founder and president of US-based virtual HR company ‘All-4-HR’.

Start by writing a clear job description, Hallburton added, and don't rely totally on a template because “10 different companies are going to have receptionists doing things 10 different ways.”

Halliburton recommends business owners to work with an HR professional to create an employee handbook so employees know how to navigate the workplace. Also, consider creating manuals that walk new employees through key tasks.

“I think you make the biggest impact within the first few months,” Halliburton opines. “The last thing you want to do is not give the effort and energy that is needed when you're hiring your employees and growing your staff and culture.”

Entrepreneurs are often hesitant when it comes to bringing a new person on board
Washington started Consult 2 Code as a solopreneur. She now has a team of seven, including full- and part-time employees as well as independent contractors.

Washington further opined, being an entrepreneur himself, that it’s common for most entrepreneurs to “want to do things ourselves because our name is the brand and the brand is our name.”

But hiring a team has allowed her to step back from day-to-day tasks and focus on running and growing her business.

“Being able to let go was really hard,” Washington added. “But once you do let go, you can finally be able to breathe.”