Hiring Your First Employee: A Practical Guide for Australian Small Businesses

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Hiring your first employee is a significant milestone.

It usually means your business has reached the point where there is more work than you can comfortably manage alone.

That is exciting.

It can also be daunting.

Suddenly you are not only responsible for finding customers and delivering your products or services. You also need to think about wages, superannuation, insurance, payroll, workplace policies, employment conditions and managing another person.

The good news is that you do not need to become an HR expert overnight.

You do, however, need to understand your responsibilities and put some basic systems in place before your new employee starts.

This guide walks through some of the practical things Australian small-business owners should consider when hiring their first employee.

Important: This guide provides general business information only. Employment, taxation, workplace health and safety and superannuation obligations depend on your circumstances and can change. Check current requirements with Fair Work, the Australian Taxation Office, your state workplace safety authority and appropriately qualified advisers.

Are You Ready to Hire Someone?

Before advertising a position, ask yourself why you need another person.

Perhaps:

• You are regularly turning away work
• Customers are waiting too long
• Administration is consuming too much of your time
• You need skills you do not have
• You are working excessive hours
• The business cannot grow while you do everything yourself

These can all be good reasons to hire.

But being busy does not automatically mean you can afford an employee.

Before making the decision, look at both the workload and the numbers.

Work Out What You Actually Need

Your first employee does not necessarily need to be a full-time employee.

Start by identifying the work that needs to be done.

Write down everything you would like another person to take responsibility for.

Then separate those tasks into areas such as:

• Administration
• Customer service
• Sales
• Production
• Technical work
• Deliveries
• Marketing
• Bookkeeping

You may discover that you need a particular skill set rather than simply “someone to help”.

That makes writing the job description and finding the right person considerably easier.

Employee or Contractor?

This is an important distinction.

Hiring someone as a contractor does not automatically make them a contractor simply because that is what you call the arrangement or because they have an ABN.

Australian rules distinguish between employees and independent contractors, and getting this wrong can create significant problems.

Do not choose a contractor arrangement simply because it appears easier or avoids employment obligations.

Check the current guidance from Fair Work and the Australian Taxation Office and seek professional advice when you are unsure.

Understand the Real Cost of an Employee

One of the biggest mistakes small businesses can make is looking only at the hourly rate or salary.

An employee can cost considerably more than their base wage.

Depending on the employment arrangement, costs can include:

• Wages or salary
• Superannuation
• Workers compensation insurance
• Payroll administration
• Leave entitlements
• Training
• Equipment
• Software
• Uniforms
• Workspace
• Recruitment
• Insurance
• Management time

Before hiring, create a realistic estimate of the total cost.

Then ask whether the business can comfortably sustain that cost during quieter months as well as busy ones.

Understand Awards and Minimum Entitlements

Australian employees may be covered by a modern award, enterprise agreement or other workplace arrangements.

Awards can set requirements relating to matters such as:

• Minimum pay rates
• Hours of work
• Overtime
• Penalty rates
• Allowances
• Breaks
• Rostering
• Classification levels

The National Employment Standards also provide minimum employment entitlements.

Do not rely on an old spreadsheet, another business owner’s advice or a figure you found in an old article.

Use current information from Fair Work when determining employment conditions and pay rates.

Decide on the Employment Type

Depending on your requirements, the position might be:

• Full-time
• Part-time
• Casual
• Fixed-term

Each arrangement can have different conditions and obligations.

The best choice depends on the role and how the work will actually be performed.

For example, if you genuinely need someone for consistent hours every week, that may lead to a different arrangement from hiring someone for irregular shifts during periods of high demand.

Understand the differences before making an offer.

Write a Clear Position Description

A good position description does not need to sound corporate.

It needs to be clear.

Include:

Job title

Use a title that accurately reflects the role.

Purpose of the role

Explain why the position exists.

Main responsibilities

List the important tasks the person will perform.

Skills and experience

Separate what is essential from what would simply be useful.

Hours and location

Explain when and where the work is performed.

Reporting

State who the employee reports to.

A clear position description helps both you and the applicant understand what success in the role looks like.

Think About the Person, Not Just the Skills

Technical skills matter, but your first employee will probably work quite closely with you.

For a very small business, reliability, communication and attitude can be just as important.

Think about characteristics such as:

• Reliability
• Communication
• Willingness to learn
• Initiative
• Attention to detail
• Customer service
• Ability to work independently
• Ability to follow processes

You can teach many technical skills.

Some behaviours are much harder to teach.

Advertise the Role Clearly

Your job advertisement should help suitable applicants understand what you are offering.

Include information such as:

• Position title
• Main responsibilities
• Employment type
• Location
• Required skills
• Experience
• Working arrangements
• How to apply

Avoid making the advertisement unnecessarily vague.

The aim is not to attract the greatest possible number of applicants.

It is to attract appropriate applicants.

Create a Simple Recruitment Process

You do not need a complicated corporate recruitment system.

A small-business process might be:

1. Receive applications
2. Shortlist candidates
3. Conduct an initial phone conversation
4. Interview suitable candidates
5. Check references
6. Confirm employment conditions
7. Make a written offer
8. Complete onboarding

Having a process helps you compare candidates more consistently.

Ask Consistent Interview Questions

Prepare your questions before the interviews.

Ask each candidate similar core questions so you can make a fair comparison.

Useful questions might explore:

• Relevant experience
• How they approach customer service
• How they organise their work
• Examples of solving problems
• How they handle competing priorities
• What they are looking for in a role
• Availability

Where appropriate, ask candidates to provide examples rather than hypothetical answers.

For example:

“Tell me about a time you had to deal with an unhappy customer. What did you do?”

This often gives you more useful information than asking:

“Are you good with customers?”

Check References

Reference checks can help confirm information provided during the recruitment process.

With appropriate permission, speak to previous employers or referees and ask questions relevant to the role.

For example:

• What was the person’s role?
• What were their main responsibilities?
• What were their strengths?
• How reliable were they?
• Would you employ them again?

Keep questions relevant and appropriate.

Put the Employment Arrangement in Writing

Once you have selected someone, clearly document the employment arrangement.

The documentation required will depend on the circumstances, but it may cover matters such as:

• Position
• Employment type
• Pay
• Hours
• Start date
• Duties
• Workplace
• Probation arrangements
• Confidentiality
• Relevant policies

Make sure the terms comply with current Australian workplace requirements.

Professional HR or legal assistance can be worthwhile, particularly when you are hiring for the first time.

Set Up Payroll Before They Start

Do not wait until payday to work out how payroll works.

Before your employee begins, make sure you have the appropriate systems in place for:

• Payroll
• Tax withholding
• Superannuation
• Timesheets if required
• Leave
• Payslips
• Record keeping

Your accounting software may handle some of these functions.

Your accountant or bookkeeper can also help you establish an appropriate payroll process.

Check Your Insurance

Hiring employees can affect your insurance requirements.

Workers compensation requirements are particularly important.

For a Queensland business, check the current requirements that apply to employing workers in Queensland.

You may also need to review other business insurance policies when your circumstances change.

Do this before the employee starts rather than after something goes wrong.

Prepare Their Equipment and Access

Imagine arriving for your first day and nobody knows where you should sit, your email account has not been created and you cannot access any of the systems you need.

It does not create a great first impression.

Before your employee starts, prepare what they need.

This might include:

• Computer
• Email account
• Telephone
• Software accounts
• Uniform
• Keys
• Security access
• CRM login
• Cloud storage
• Equipment
• Password management access

Only give people access to systems and information they genuinely need.

Create an Onboarding Checklist

Onboarding should be more than showing someone where the coffee is kept.

Your checklist might cover:

• Welcome and introductions
• Workplace tour
• Role and responsibilities
• Employment documentation
• Safety procedures
• Systems and passwords
• Customer service expectations
• Business processes
• Communication methods
• Key contacts
• Initial training
• First-week priorities

A checklist makes the process repeatable when you hire again.

Document Your Processes

Your first employee will quickly reveal how much information currently exists only in your head.

You know how to:

• Answer enquiries
• Prepare quotes
• Name files
• Follow up customers
• Handle complaints
• Process orders
• Complete jobs

Your new employee does not.

Start documenting recurring processes.

They do not need to be elaborate manuals.

A simple checklist can be enough.

For example:

New website enquiry

1. Check enquiry details
2. Add contact to CRM
3. Review existing website
4. Send acknowledgement
5. Create follow-up task
6. Arrange discovery call

Documented processes make training easier and reduce inconsistency.

Set Expectations Early

Do not assume your employee knows what you expect.

Talk about:

• Working hours
• Communication
• Customer service
• Deadlines
• Personal phone use
• Remote work
• Privacy
• Security
• Workplace behaviour
• Who makes which decisions

Clear expectations prevent misunderstandings.

Schedule Regular Check-Ins

When you have worked alone for years, managing someone can take some adjustment.

Do not wait until there is a problem before discussing performance.

During the first few weeks, schedule regular short check-ins.

Ask:

• How are things going?
• Is anything unclear?
• Do you need additional training?
• Is anything stopping you from doing your job?
• What have you noticed that we could improve?

New employees can sometimes identify inefficient processes that have become invisible to you.

Listen to them.

Your First Employee Changes Your Business

Hiring your first employee is about more than increasing capacity.

It changes the way your business operates.

You begin moving from:

“I know how everything works”

to:

“We have a system for how this works.”

That shift is important if you eventually want to build a business that can operate without requiring you to personally handle every task.

First Employee Checklist

Before your employee starts, check that you have considered:

• The role is clearly defined
• You understand the total employment cost
• Employment type has been determined
• Applicable workplace requirements have been checked
• Pay and conditions have been confirmed
• Employment documentation is ready
• Payroll is configured
• Superannuation processes are established
• Required insurance has been arranged
• Equipment is ready
• System access has been created
• An onboarding plan is prepared
• Important processes are documented
• Initial training is scheduled

Frequently Asked Questions

How do I know when it is time to hire my first employee?

Common signs include consistently turning away profitable work, excessive workloads, slow customer response times or spending too much time on tasks that could reasonably be delegated. The business also needs sufficient and sustainable cash flow to support the additional cost.

What does an employee cost besides their wage?

Depending on the arrangement, additional costs can include superannuation, insurance, leave entitlements, payroll administration, equipment, software, training and management time.

Can I hire someone as a contractor instead?

A contractor and an employee are not interchangeable labels. The actual working arrangement determines whether someone is an employee or independent contractor under relevant Australian rules. Check current Fair Work and ATO guidance.

Do I need workers compensation insurance?

Workers compensation requirements apply to many businesses employing workers, but the precise requirements depend on your circumstances and jurisdiction. Queensland employers should check current Queensland requirements before employing staff.

Should my first employee have a written employment agreement?

Putting employment arrangements in writing provides clarity for both parties. Make sure any agreement complies with applicable workplace laws, awards and minimum entitlements.

From Doing Everything Yourself to Building a Team

Hiring your first employee can feel like a huge step.

In many ways, it is.

But it is also an opportunity to start building a business that does not rely entirely on you.

Define the role carefully.

Understand the costs.

Get the employment foundations right.

Create simple systems.

Train your new team member properly.

And communicate.

The goal is not simply to find someone who can take work off your desk.

It is to start building a team that helps the business operate better and gives you room to focus on where you can add the most value.

Continue exploring our Start & Run guides for practical resources to help you establish, manage and grow your Brisbane small business.