Setting up a New Hire for Success

 No one has a bigger impact on a new employee’s success than the manager who hired them. Here are some tips on how to set your new hires up to succeed.

Investing time in onboarding brings new employees up to speed faster, which means they’re more quickly and efficiently able to contribute to the business. Effective onboarding also dramatically reduces failure rates and increases employee engagement and retention. The time between someone accepting an offer and starting their new role can be used to jump-start the process.

But even if new employees are already in their new job, there are many ways to get them up to speed faster. The starting point is to take care of the “onboarding basics” – such as documentation, compliance training, office space, support, and technology. Fortunately, most firms do a reasonably good job of these elements. The real work begins with integrating new hires into the business.

Understand the challenges

Starting a new job is challenging. Even experienced professionals can struggle as they are unfamiliar with the business, don’t understand the culture and aren’t fully aware of how things really work. New employees have to learn a lot and may be feeling quite vulnerable, even when they seem outwardly confident.  Integrate a new employee with the help of the existing team. The rewards of this will help create a more inclusive working environment for the new employee – lessening the chance of them wanting to leave after a short time.

Managers need to get involved

Managers have a vested interest in onboarding their new hires effectively. They need to coach their new recruits, check-in with them regularly and be ready to intervene if things look like they might go off-track. This requires an investment of time and energy but can help the new hire to secure some early wins, which can boost their confidence, their credibility within the firm and will increase the likelihood that they will succeed in their new role.

Make them part of the team

New hires need to build effective working relationships with their peers. The arrival of a new employee should be communicated prior to their start date so that the team understands who the new person is, why they have been hired and the role they will fulfill.

Once they join, a team lunch or social get-together is a good investment as it helps to connect your new hire with others in the team, in a more relaxed setting.  Introduce a tour of the office so that a new employee can meet everyone on a one to one bases and see where they sit.  Outside of the new hire’s immediate team, there are likely to be other stakeholders who will be critical to their success in the job. A good manager will take the time to set up introductory meetings with key stakeholders so that the new recruit gets connected with the right people from the start.

Direction

From the beginning, a manager should explain to the new hire what the expectations of the role are and set some key objectives for the first 100 days. The new recruit should be clear on what they need to do, how they should be doing it and what the purpose of the role is within the context of the wider business.

If you would like me help and support on hiring staff, please contact Andrew Tomlinson at Nicholsons  on 01522 815100.

Head of Human Resource at Nicholsons Chartered Accountants Lincoln HR

 


How to raise your prices without losing customers

The cost of running a business goes up every year, but when was the last time you increased your prices?

Many business owners and managers worry that if they were to increase prices, they would lose customers. However, a customer will often be willing to pay a higher price if they feel they are getting value for their money.

A good way to increase your prices can be to bundle products or services together and offer the combined bundle at a price that offers value to the customer. For example, a phone contract might have a higher price but it may include a bundle such as unlimited calls and 20GB of data per month. The key is providing value to the customer.

Find a way to differentiate your offering. Perhaps you could offer new online services to your customers such as an online portal or an app. Maybe you could create faster, more efficient processes so that your customers get a faster, more efficient product or service from your firm, compared to the competition. If you offer something that is seen to be the best in its class, that offers a benefit to your customers, you may be able to increase your prices.

You can test a higher pricing strategy on new customers. Your existing customers might be resistant to a price increase but new clients will be unfamiliar with your pricing so they may accept the higher price if they feel that you offer more value to them than your competitors.

If you do increase prices for your existing customers, you need to communicate well and explain clearly why you had to make the decision to increase your prices. Do your market research to make sure that your pricing isn’t completely out of line with competitors. If your business is not significantly different to the nearest competition, you may run the risk of losing clients.

Large sudden jumps in your prices will not go down well. Instead, introduce gradual increases such as 5% or 10% per year, depending on the type of business that you run. Everyone knows that the cost of doing business goes up each year. If you communicate with your customers, they may be more receptive to small increases.

 

 


Joshua Lester tells us how an apprenticeship has helped him find full-time work

My name is Joshua Lester; I am 19 years old and currently studying for my Level 3 business administration qualification through LAGAT college with Nicholsons Chartered Accountants.

Whilst taking my A-levels in sixth form, I know that university wasn’t a path I wanted to go down, so I decided to take my first steps into full-time work and began hunting for an apprenticeship. I had a few options and a handful of interviews, however after my initial interview at Nicholsons, I was eager to hear back from them as it seemed like a very promising career path.

I soon got called in for a second interview and a chance to ask further questions, which I had prepared. Once the interviewing process had been completed, I received a call from Nicholsons and was offered the apprenticeship position. I was excited as I knew this was a great opportunity for me to get started on the progression ladder; the team at LAGAT college described this as a “job for life”.

Nicholsons was very welcoming and made it easy for me to settle into my new position. I began my apprenticeship in December 2018, and I am set to finish it by the end of June 2019. Once finished I will be able to continue with my learning through LAGAT, alongside my new role within Nicholsons, while hoping to keep building towards the future; both for myself and for Nicholsons.

Since being at Nicholsons my confidence has grown both within my work and my personal life and has helped me grow as a person. Furthermore, being able to ‘earn and learn’ has given me a chance to become more independent than whilst at school, this has also been very beneficial for me. I firmly believe that an apprenticeship was the correct route for me and that Nicholsons was the perfect place for me to begin my career.


Extracting profit from the family company

 The start of the new tax year means that shareholder/ directors may want to review the salary and dividend mix for 2019/20. The £3,000 employment allowance continues to be available to set against the employers national insurance contribution (NIC) liability which means that where the company has not used this allowance it may be set against the employers NIC on directors’ salaries.

Thus, where the only employees are husband and wife there would generally be no PAYE or employers NIC on a salary up to the £12,500 personal allowance.

There would however still be employees NIC at 12% on the excess over £8,632 (£166 per week) which would be £464 on a £12,500 salary, leaving £12,036 net.

Taxation of Dividend Payments in 2019/20

Traditional advice would then be to extract any additional profits from the company in the form of dividends. Where dividends fall within the basic rate band (now £37,500) the rate continues to be 7.5% after the £2,000 dividend allowance has been used. Thus where husband and wife are 50:50 shareholders they would each pay £2,663 tax on dividends of £37,500 assuming they have no income other than a £12,500 salary, leaving £34,837 net of tax.

So a combination of £12,500 salary and £37,500 in dividends would result in £46,873 (93.7%) net of income tax and NICs.

Ensure dividend payments are legal

The Companies Act requires that companies may only pay dividends out of distributable profits. This means that in the absence of brought forward reserves the company would need to provide for 19% corporation tax in order to pay the dividends and thus there would need to be profits of £92,593 in order to pay dividends of £75,000 (after providing corporation tax of £17,593).

Overall the combination of salary and dividends suggested above would result in net of tax take home cash of £93,746 for the couple out of profits before salaries and corporation tax of £117,593 (20.3% overall tax). This still compares very favorably with the amount of tax and NIC payable if the couple were trading as a partnership.

If you would like any further information please call our tax specialist on 01522 815100

how will the 2017 general election affect business in lincoln

 


Taxation of Dividend Payments in 2019/20

Traditional advice would then be to extract any additional profits from the company in the form of dividends. Where dividends fall within the basic rate band (now £37,500) the rate continues to be 7.5% after the £2,000 dividend allowance has been used. Thus where husband and wife are 50:50 shareholders they would each pay £2,663 tax on dividends of £37,500 assuming they have no income other than a £12,500 salary, leaving £34,837 net of tax.

So a combination of £12,500 salary and £37,500 in dividends would result in £46,873 (93.7%) net of income tax and NICs.

Ensure dividend payments are legal

The Companies Act requires that companies may only pay dividends out of distributable profits. This means that in the absence of brought forward reserves the company would need to provide for 19% corporation tax in order to pay the dividends and thus there would need to be profits of £92,593 in order to pay dividends of £75,000 (after providing corporation tax of £17,593).

Overall the combination of salary and dividends suggested above would result in net of tax take home cash of £93,746 for the couple out of profits before salaries and corporation tax of £117,593 (20.3% overall tax). This still compares very favorably with the amount of tax and NIC payable if the couple were trading as a partnership.

 


Private Residence Relief could see changes in 2020

The government is currently consulting on important changes to private residence relief that are likely to be introduced from 6 April 2020.

The two possible changes, announced in the Autumn 2018 Budget are:

Firstly to limit to just 9 months the period prior to disposal that counts as a period of deemed occupation

The second is to limit “letting relief” to periods where the taxpayer is in shared occupation with the tenant.

Final period exemption to be reduced

The final period exemption was for many years three years and was always intended cover situations where the taxpayer was “bridging” and waiting to sell their previous residence. However, 36 months was felt to be too generous and was allegedly being abused by a strategy known as “second home flipping”. As a result the final period relief was restricted to the current 18 month period of deemed occupation a couple of years ago. The latest proposal is to restrict still further to 9 months although it will remain at 36 months for those with a disability, and those in or moving into care.

Possible Lettings Relief Changes

Lettings relief currently provides a further exemption for capital gains of up to £40,000 per property owner. The additional relief was introduced in 1980 to ensure people could let out spare rooms within their property on a casual basis without losing the benefit of PRR, for example where there are a number of lodgers sharing the property with the owner.

In practice lettings relief extends much further than the original policy intention and also benefits those who let out a whole dwelling that has at some stage been their main residence. It is those situations that the government appear to be attacking under the proposed changes.

Note that those who are renting their property temporarily whilst working elsewhere in the UK or working abroad are unlikely to be affected by this change as there are alternative reliefs available under those circumstances.

Please check with us if you are likely to be affected by the proposed changes as it may be worth considering disposing of the property before the new rules are introduced from April 2020.

Call Richard Grayson on 01522 815100.

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Jim Carratt gives us his end of season report for Lincoln City FC

March began with 3 victories and 2 home wins, with a satisfactory 1-0 v to-be-relegated Yeovil and a 2-0 win over Paul Scholes’ Oldham, which was his last match in charge, where City played some of their best football of the season. A 2-1 away victory followed over former National League rivals Forest Green.

A highly important Sky TV game versus local rivals Mansfield and a John Akinde penalty earned us a 1-1 draw in a tight encounter.

A 3-0 win at Crawley followed by a 1-1 draw at home to relegation threatened Macclesfield.

Backed by over 5,500 fans City travelled to promotion rivals MK Dons and won 2-0 with a cool penalty from John Akinde and a great strike from Bruno Andrade – a commanding display and season defining moment.

A win v mid table Cheltenham the following week would guarantee promotion. A 1-1 draw caused confusing scenes as fans started leaving the ground unaware that we had been promoted even though Sky TV had announced this had been achieved as other results went their way.

An entertaining 0-0 draw against Tranmere sealed the club’s first championship since 1976. A pitch invasion ensued before the team were able to celebrate with a lap of honour.

The season finished with a 1-0 loss at Newport and a 3-0 home defeat against an excellent Colchester side where the team were harshly booed at half time – the fickle fans forgetting the previous 45 games. The presentations took place after the match and the defeat was soon forgotten with the bus parade through the city taking place the day after.

What a season! – 3 trophies now in 3 years and just 1 division off the Championship.

Arguably the fans started to believe the club were on the way back just over 2 years ago when we played championship side Ipswich in the FA Cup, Lincoln were a non-league club, Next year we play them in Division 1.