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The link between HR and finance

How to keep your two business departments in check

According to a CV Library report, over 56 per cent of businesses spend up to £5,000 on hiring new staff. Ensuring your human resources (HR) procedures are effective when hiring new staff can have a direct impact on your business expenditure. In this article, Richard Stonier, co-founder and partner of online accounting provider Tally, explains the top four ways to keep your HR procedures in check, to help protect your business’ budget. 

From the moment a business decides to hire a member of staff, whether that be their first ever employee, or as part of a multi-national corporation, the financial implications of hiring a new person must be closely monitored.

Look beyond skills

Before you’ve even considered where your recruit should sit in the office, you need to find them first. To do so, you’ll likely need to develop a targeted strategy to get the right CVs coming in.

Start with a clear job and person description. Obviously, making sure the person you hire has the right skills is important, but not considering the interpersonal dynamic of your team can lead to epic failures.

A report from David Sturt and Todd Nordstrom on Forbes highlights that “The people you work with can make or break a work situation.” If you don’t get the team dynamic right, it can cost the business thousands in terms of management time and possibly recruiting replacement staff.

First impressions count

Once you’ve found the right fit, both in terms of skill and personality, getting them through the door and feeling part of the team is important too. The onboarding of new staff can make or break the first impression of your new hire.

For instance, once you’ve made a formal offer to a recruit, make sure that all the information you send them is cohesive. Simple things like using branded letter heads for welcome letters and contracts or providing them with a structured introduction plan can set the mark.

Also giving the new hire all the tools they need to do their exciting new job effectively is just as important. Not having a desk, computer or any other relevant equipment set up and ready to go on their first day can put a dampener on first impressions.

Even taking your new colleague out to lunch on their first day can really make them feel welcome and gives you an opportunity to talk to them socially, rather than just about business.

Paying the bills

Of course, one of the key reasons your new hire has started working for you is to pay their bills. Setting them up in your payroll system is critical. However, to do so, there are a number of other key tasks.

“Her Majesty's Revenue and Customs (HMRC) needs to be aware that your new employee is starting before they even arrive, not at the end of the first month,” says Sue Green, owner of Evergreen HR Ltd. “You also need to make sure that they are covered through your employee liability insurance. This is particularly important if this is your first employee as it is compulsory insurance for anyone responsible for employees.”

Digitalisation is key

While the recruitment industry underwent a digital revolution in the early 2000s when sites like Indeed and Reed were launched, the financial industry is only just catching up.

However, even for small businesses, transitioning to managing your finances online can help keep your recruitment strategy in line. Using digital accounting software, like Tally Accounts, that incorporates HR elements to their function, can help ease the strain of getting a new hire in place. Costs can be minimal for tasks like payroll setup, payroll-payrun or the processing of new starters through many accountancy software packages.

Making sure that your business is prepared, both in terms of the HR and financial impact of hiring employees, is vital in ensuring the smooth transition of having a new face in the office, both for the new starter and for you and your business too.