Five Things To Consider When Hiring Your First Employees
It's an exciting, yet nerve jangling moment, and one that brings with it a whole new set of red tape– including legal obligations, expenses and liabilities.
For months, you’ve been steering a lone ship- you’ve controlled everything to do with your startup, and burnt the midnight oil to make it work. Now, all that effort has paid off, because you need your first employee to help your company grow. It’s an exciting, yet nerve jangling moment, and one that brings with it a whole new set of red tape– including legal obligations, expenses and liabilities. To help you navigate through this, here’s a brief overview of what you should know before hiring an employee for your enterprise in the UAE:
1. Know when it’s time Hire with a plan. Don’t start hiring in a mad rush. Bad decisions are made in haste. Instead, consider whether you’re hiring a person to help you make the business more money, save money, or both? If the answer is yes to any of these, then the time is probably right.
Another way of considering this is asking whether you’re currently too busy simply because you’re doing the work of an employee. For example, if you can hire someone to do the job, and by doing so, open your time up to sell more product that comfortably covers their wage, then hiring makes sense.
Other key signs could be that you’re turning down work, that you’re not competing for work because you don’t have the time, that you’ve had a few complaints about yourself or your product that appear to be there, because you’re rushing.
2. Know who to hire You next need to know what type of person and skillset you need. Do you need a jack-of-all-trades? Or would a specific skillset serve you better?
It certainly seems that there are particular skill requirements that are common for first hires among startups. In the European Startup Report from 2017, which surveyed the UK, Germany, France, the Netherlands, the story was the same for all countries. The top three first startup jobs were developers (14-24%), sales (13-20%), and marketing (7-13%).
This makes sense, because these jobs are fairly common requirements for most businesses and require knowledge that not every entrepreneur has. If the tasks you need help with logically fall into a single expertise, then it’s probably time to hire.
Sometimes however, what you really need is someone to take the heat off you in terms of the day-to-day tasks. An operations manager, for example, can help with invoicing, finances, and inbound communications. This leaves you free to go out and concentrate on improving a product/service, or gaining more customers.
Also take note that it doesn’t have to be a full-time employee at all. You could start with an intern to do the day-to-day tasks with the possibility of hiring after a certain period. This way you get to know someone before taking them on full time.
There is then the possibility of outsourcing. For many industries, including marketing and programming, it’s possible to either strike up a long term relationship with a pool of freelancers, or use an agency. In this way, you access a wide range of skills and resources for the price of that one full time hire.
3. Know how to recruit efficiently Recruitment always takes a surprisingly large amount of time. There are job descriptions to be made, interview questions to write, CVs to read, interviews to perform, and formal employment offers to be made.
It’s tempting to rush. But the more time you put into the process now, the easier it will be in the long run. Set up a template for your job descriptions, so they’re easier to adapt later on.
Write a complete job description. Doing so not only increases your chances of attracting the right people with the right skills, but also helps you then write the best interview questions. Try to make these questions about finding solutions, rather than the predictable ones like: “What are your weaknesses?”
Build a consistent interview process, where everyone receives the same questions, making it simpler to compare candidates after the interviewing is complete. Finally, consider involving one or two other trusted people in the process. They may be able to offer some valuable insights.
4. Know how the recruitment process can vary Understanding employment law in the UAE can be daunting at first, but so long as you stick to the rules you’ll be just fine. One key thing to keep in mind is that the process is different, depending on whether you hire on the mainland or in a free zone.
If you’re on the mainland, once your business has the correct licenses in place, it can then sponsor employees. When handing out a work visa, the UAE Ministry of Human Resources and Emiratisation also considers the following:
> Qualifications Workers should possess the competence or academic qualifications needed in the country and will need to provide validated proof.
> Visa requirements Companies sponsor work and residency visas for their employees. The cost is footed by the business. You may also wish to consider whether you will also offer to sponsor the employees’ family visas as part of their employment package, although the employees can also sponsor these themselves.
If you’re hiring from a free zone, the need for the right licenses and visas holds true; however there is rarely priority for work given to one group (e.g. Emiratis) over another (e.g. foreign nationals). Also note that:
> Companies don’t do the sponsoring It’s the authority managing the free zone that does. This means the visa is location specific.
> Visa quotas vary Free zones issue a limited number of employee visas per company, depending upon on the size of operation and type of license.
5. Know what to offer Much of what is required in a UAE employment contract is similar to the rest of the world, but there are differences. Many bring with them additional costs that are not immediately obvious when you first think of hiring someone. You would be wise to approach a professional when it comes to drawing up a contract.
Here are some things to remember– but note that while these are based on UAE Labour Law, free zones often have their own variations, so be sure to check.
> Employment contracts need to be in Arabic and English. If there is a dispute, the Arabic text prevails.
> Private medical insurance is required.
> Employers must cover their potential pay liability owed to workers, especially in terms of repatriation. This is usually done via a bank deposit or insurance scheme.
> Eight hours per day, 48 hours per week are the maximum working times, but this varies by industry.
> Overtime should be paid for certain employee grades. The is the normal rate of pay plus 25% in most cases.
> Annual leave, sick pay, and maternity pay should all be offered.
> End of Service Gratuity needs to be budgeted in, given that all workers are entitled to this after one year’s service.
There is, of course, far more to get clued up on. Given the recent impact of COVID-19, it’s also advisable to keep checking for changes to labour laws.
Time well spent
In addition to the above, you’ll need to consider where to go to search for your employees, and how best to interview them. So, it may well seem a daunting and time-consuming process. But, if your business is to grow, it has to happen at some point. Luckily, most entrepreneurs find the process rewarding, and that the assistance they ultimately gain brings an immediate boost to their business.
Hans Christensen is Vice President, Dubai Technology Entrepreneur Campus (Dtec), Dubai Silicon Oasis Authority.
Hans holds a BA, an MBA, and is studying for his PhD. For the past eight years, he has led a team of managers running the largest and most impactful tech hub in the MENA region. It houses 1,000+ tech startups, from 72 nations, within its 10,000 sq. m. business center. Dtec has helped create 3,000 jobs and the inflow of US$300 million in the local economy.
Hans shaped Dtec’s strategy. Today it is highly profitable and has six different pillars addressing co-working, Acceleration, Events & Learning, Venture Capital, Services and Corporate Innovation. Dtec was also a hosting partner of Intelak, Emirates Airlines incubator, co-founded Startupbootcamp’s Smart City Accelerator and is home to Intel’s Innovation lab and the HP Innovation Garage.
Previously, Hans founded, as CEO, three startups on different continents, raising $10 million in venture capital, and has also held senior positions building three departments in MNCs, including Siemens’ first incubator 20 years ago.