Drafting Contracts and Employee Hire

See also: Selecting and Recruiting Skills

An employment contract is a binding agreement between an employer and employee that outlines the terms, conditions, rights, and responsibilities of both parties. Drafting an employment contract is essential for protecting the legal interests of both the business and the employee.

A contract tells the employee what is expected of them and sets out the rules for the employer’s workplace. It outlines job duties, salary, benefits, termination conditions, compliance with laws and regulations, confidentiality agreements and other important information about employment.

An effective contract can help prevent misunderstandings or disputes between an employee and an employer. Here are some steps for drafting a sound contract and hiring employees, as well as tips on how to sail through this process smoothly.

3 Skills Needed in The Hiring Process

Vetting the right candidates for the job and ensuring their smooth transition to your organisation is no easy feat. You'll have to be equipped with the right skills if you want to get the best out of your employee hiring process.

Here are some skills you need to get through this process successfully:

1. Communication and Negotiation Skills

Hiring managers should be able to effectively communicate with their candidates, as well as negotiate the terms and conditions of the job offer.

Being able to clearly explain expectations and policies in a non-biased manner is key to letting the employee what's expected of them in their future role.

2. Time Management Skills

The hiring process can last anywhere from a few days to several weeks. And while you'd ideally have a steady and efficient timeline for hiring, many external factors can add to the workload and even delay the process.

As such, managers should set a timeline and have contingency plans in case things fall behind schedule. Furthermore, the system they set in place must also already be incredibly efficient to ensure that all tasks are completed on time.

3. Decision Making Skills

Throughout the recruitment process, you will have to make a handful of decisions. This includes deciding which applicants are the best fit for the job, as well as negotiating and agreeing upon the terms of employment.

Having good decision-making skills is essential to ensure that these decisions reflect the company’s values and that everyone's happy.

Hiring Employees: A Step-by-Step Guide in Contract Drafting

1. Provide an Appropriate Title for the Contract

The first step in drafting a contract is providing a title that accurately describes the terms of the agreement. This is important as it defines the contract’s purpose for the benefit of the employee.

For example, a contract between an employer and a software engineer will likely have the title “Software Engineer Employment Contract.” It's also reasonable to add a company title or logo to the contract.

2. Identify the Relevant Parties

The next step is to identify the relevant parties, in other words, the employer and the employee. This includes describing their full names, work email addresses, and other pertaining details that the contract will cover.

If you're creating a template, leave an underscore or blank space to be filled in later with the title, name, and other information of future hires. Encourage these employees to fill in their full names and other personal information to prevent any future disputes.

3. Set Out the Contractual Terms

The bulk of the contract should set out the conditions of employment. A lot of these terms have regulations that follow the local state laws, but you can also include company clauses to ensure the employee’s compliance with your company’s policies.

Make sure you include all these terms so the employee has a clear understanding of their rights and obligations. If you want to be certain that your guidelines abide by state laws, contact the employment team at LegalVision UK for professional legal advice.

4. Outline the Job Details

Even though this may have already been established in interviews, get everything in writing and provide a clear outline of the job details for your new hires. This includes the job title and description, hours of work, rate of pay, and other relevant information regarding tasks expected of them.

It's also beneficial to give a breakdown of duties, responsibilities, and performance expectations for employees to clearly know their obligations. This can be done in the form of percentages of the role’s components.

For instance, a cashier can be expected to have 25% of their time dedicated to customer service and 75% to cashiering duties.

5. Outline the Compensation Scheme

It's critical to provide a clear and concise description of the salary details upfront to avoid any confusion later. This includes wages, overtime rate, bonuses, health benefits, vacation time, and any other remuneration associated with the position.

Include a payment schedule, such as monthly or bi-weekly payments and specify the payment date. Also mention how the employee will be reimbursed, whether it's through direct deposit or check.

If employees are expected to provide their own equipment, include details of if and how the company will reimburse them for it. By having all this information clearly set out in the contract, there will be no misunderstandings once payday rolls around.

6. Have a Signature Line and Date

The contract should have signature lines for both parties with a box that states the date when the agreement has been signed.

This is an important step as it legally binds both parties to the terms within the contract. It also informs when the employee can start working for the company and how long the employment agreement is valid.

7. Send the Agreement for Signature

Once all these steps are completed, you should send the agreement, preferably via email, to the employee. If the applicant finds the terms agreeable, they can proceed and sign the contract.

However, it's still within the rights of the employee to negotiate or forfeit the terms listed in the contract if they are not comfortable with it.

Further Reading from Skills You Need

The Skills You Need Guide to Leadership

The Skills You Need Guide to Leadership eBooks

Learn more about the skills you need to be an effective leader.

Our eBooks are ideal for new and experienced leaders and are full of easy-to-follow practical information to help you to develop your leadership skills.

8. Onboarding Employees

Once the employee has returned a signed contract and other relevant paperwork, you’re ready to properly onboard them to your company.

This process can vary greatly, depending on the size and nature of your organization. Generally, the first few weeks involve introducing the employee to their team, providing job-specific training and familiarizing them with company policies.

Training them on company-specific software is also a part of the onboarding process, and this can take anywhere from a few days to a few months.

Furthermore, the company will have to add any new hires to the company payroll system and database. This is to ensure that the employee receives their wages and other remuneration on time.