How to hire your first employee

Your startup or entrepreneurial project has been successful: Your business is growing and you need to expand your team. When you hire people, you automatically become an employer, and there is a number of practical and legal aspects to consider. In this article, IDA will guide you through all these aspects.

What are the needs of your business?

First of all, you need to define the employee profile you're looking for in your startup. Are you looking for an employee with the same competences as yours, or do you want someone with a different profile? What tasks would you like your new employee to take on, and what will be the employee's role in your business? You need to consider these questions because right now, you're responsible for everything yourself, and in principle, you fulfil all roles. When a new employee joins your business, you have to be ready to define this person's role and tasks. But you should also be prepared to let go of the tasks and roles.

Patience, patience, patience

Once you know what kind of employee you need in your business, it's time to be patient. You have to write a job ad with a realistic deadline, post the ad on relevant platforms (Facebook, LinkedIn or job banks), and ask people in your network. Then you have to read all the applications and allocate time for job interviews. It’s important that you don't just hire the first candidate that comes along. The wrong job match in a small business can take a successful business in the wrong direction. Hiring the right employee requires careful deliberation, and you may even have to advertise the job again. During the employment process, you have to consider whether to conduct several interviews with selected applicants, and you may also consider whether you will ask the applicants to complete practical tests or take a personality test.

You have found the right candidate

Once you have found the right candidate for the job, it's time to start thinking about the legal aspects. It's important that you draw up a legally correct employment contract. Employment contract templates are available at ida.dk, and, of course, the terms and conditions can be adapted to fit your business. Make sure that the template contains the right details, for example with regard to salary, working hours, pension and holiday. The Act on the Employer's Obligation to Inform Employees of the Conditions Applicable to the Employment Relationship (Ansættelsesbevisloven) stipulates a number of aspects that must be covered as a minimum, and these are included in the template. If you follow the list below, you have already come a long way:

• Name and address of the employer and the employee
• Location of the workplace or a statement that the employee will be working from different workplaces, if there is not a permanent workplace. Furthermore, the business head office or the employer's address must be stated.
• Job description or information about the employee's job title, rank, position or job category.
• Start date of the employment relationship.
• Expected duration of the employment relationship if the employment is not permanent.
• The employee's rights with regard to paid holiday, including whether the employee will be paid a salary during holiday.
• Terms of notice for the employee and the employer, or the regulations in this respect.
• The current or agreed salary to which the employee is entitled when the employment relationship commences, as well as any additions and other salary components not included in the salary, for example pension contributions or food and accommodation.
• Salary payment dates.
• Normal daily or weekly working hours.
• Information about the collective agreements or other agreements governing the conditions of work. If there are collective agreements or other agreements concluded by parties outside the business, information about these parties should be included.

Do you need to hire several employees at the same time?

It is important that you take time to introduce new employees to your business. Therefore, it is generally a good idea to hire one employee at a time. It takes about six months to get a new employee completely up and running.

Find the right employee through your network

There is a shortage of engineers in Denmark, and many engineers may prefer working in an established company rather than a startup. The solution may be to recruit new employees through your network. This will give potential candidates an informal impression of your business and help attract the right person for the job.

Contact IDA

Remember that you can contact IDA and get legal advice when hiring your first employee.