The first employee is the point where a business stops being one person's work and starts being an organisation. It is also the point where a set of obligations attaches that most owners meet for the first time on the day they need them.

None of it is difficult. Almost all of it is easier before you hire than after.

First: is this an employee at all?

Plenty of small businesses start with a freelancer and slide into employment without noticing. The label on the arrangement is not what decides it — what decides it is how the work actually happens. Somebody who works your hours, under your direction, using your equipment, mostly for you, is an employee in substance whatever the invoice says.

Getting this wrong is expensive in two directions at once: SARS treats unpaid employees' tax as your liability, and a person you thought was a contractor can bring an unfair dismissal claim you were not expecting. If the arrangement looks like employment, treat it as employment.

What you must have in place

  • Written particulars of employment. The employee is entitled to written details of the job, the pay, the hours and the leave, given when they start. This is not the same thing as a lengthy contract, and having one does not require an attorney — but having nothing is both a breach and the cause of most disputes that follow.
  • Registration as an employer with SARS, so you can deduct and pay over employees' tax.
  • UIF registration and monthly contributions, deducted from the employee and matched by you.
  • Registration with the Compensation Fund for workplace injury cover, and an annual return of earnings. The letter of good standing it produces is also something larger customers ask for, so it is worth having even if nobody is ever hurt.
  • A payslip every time you pay them.

Check whether a bargaining council or sectoral determination covers your industry. If one does, it sets minimum wages and conditions for your sector specifically, and they override whatever you and the employee agreed between yourselves.

What an employee actually costs

The salary is the smaller number. Before you commit, add up the whole thing for a full year: gross salary, your UIF contribution, the Compensation Fund, any provident or medical contribution you offer, recruitment costs, equipment, the software seat, the desk, and the paid leave they are entitled to — which means you are buying somewhat fewer working days than the annual figure suggests.

Then add the part nobody budgets: your own time. The first month of anyone's employment is mostly you explaining things, and the business produces less during it, not more.

The honest test is whether you can pay all of that in a quiet month, not an average one. Hiring on the strength of a good quarter is how businesses end up retrenching somebody a year later, which is worse for everyone than not having hired.

Write the job down before you advertise

Not a job description in HR language. Three plain answers: what will this person do all day, what does good look like after six months, and what must they already be able to do on day one.

Most bad first hires are not bad people. They are people brought in to "help", with no definition of help, who are then judged against a standard nobody wrote down. Writing it down also tells you whether you actually need a full-time employee or four hours a week of somebody who is genuinely good at the specific thing.

Hiring itself

Advertise in the place the people you want actually look, which is often not the biggest job board. Ask your network first — most small businesses fill a first role through somebody who knows somebody, and a referral comes with a reference attached.

Interview against the three answers you wrote down. Ask for examples of work already done rather than opinions about how work should be done. Where the job has a practical core, set a small paid exercise that resembles the real thing — an hour or two, paid, tells you more than another conversation.

Check references, and phone rather than email. People will say things on a call they will not put in writing, and the question worth asking is whether they would employ the person again.

Probation, and being honest during it

A probation period is only useful if you use it. It exists so both of you can find out whether this works, and it requires you to be explicit — set out what you expect, meet regularly, say clearly when something is not right and give the person a real chance to fix it.

Probation is not a period in which employment law does not apply. You still have to be fair, you still have to give reasons, and you still have to follow a process. What it does allow is a shorter, more open conversation about fit, and the time to have it before either of you has invested a year.

The thing to get right from day one

Keep records. The signed particulars, the payslips, the leave taken, the conversations about performance, the warnings if there are any. Small businesses lose disputes they should win because everything happened verbally and nothing was written down.

It takes minutes a month, and it is the difference between a disagreement and a case.

General guidance on employing people in South Africa, not legal advice. Employment law and sectoral determinations change; confirm the current requirements, and take proper advice before a dismissal or a retrenchment.