Hiring For Your Business: What You Must Know

In this post, we show you what you need to know when hiring for your business. From HR strategy to employment contracts to payroll, it’s all here along with first-hand insights from successful business owners and leading business experts.

Sooner or later in your business, you will need to start hiring to keep up with growth. 

To help you make sense of this topic, we spoke to our panel of successful business owners and leading business expert to share their unique insights. 

Let’s hear what they have to say.

Getting a Grip on Labour Costs

When your business is first starting out, it’s important to keep overheads manageable while you build up your customer base and revenue stream. Marc Goh—Founder of digital marketing agency Design Prodigy shared with us his personal experience.

“I over-hired at the start and exhausted my cashflow. Based on my assumptions of what a marketing agency will need, I hired 3 full-time employees. But in reality, just 1 is needed to get the work done.”

Hiring employees is a big commitment and can be costly. Before you go this route, consider if it’s possible to accomplish the work yourself, or to outsource.

Today’s technology has made many tasks so much easier. Want to set up an online store? Build it yourself with Shopify. Need to send marketing professional-looking emails on your latest promotion? Use Mailchimp. Both of these apps are made free for you to try with OCBC’s Start Digital Pack.

If you have a one-off task or short term project which cannot be automated, consider outsourcing to freelancers and part-timers. Platforms such as Upwork and Fiverr are great for finding creative and web development talents at a reasonable rate.

Of course, hiring full time employees is inevitable when your business grows. How do you improve your chances of finding the right person for the job? Read on to find out.

Manpower Rules and Regulations

Businesses looking to hire in Singapore need to stay on top of rules and regulations, with the key requirements being set by Ministry of Manpower (MOM), CPF Board and IRAS.

For a start, an employment contract is mandatory. Francis Chan, Deputy Head (Disputes) at Rajah & Tann Legal Basix Practice Group advises, “As a starting point, businesses should cross check their own employment contract templates to ensure that it includes key employment terms and may use the MOM template as a checklist. Employers should also consider including confidentiality, intellectual property, termination and other relevant clauses in their employment contracts to protect themselves.”

If you’re looking for more resources on this area, you can check out Francis’ comprehensive guide on employment contracts.

When budgeting for your salary expenses, do note that both employers and employees have to contribute CPF, hence your wage bill could potentially inflate by 17%. Part-time, temporary employees and company directors are not exempt from CPF contributions either.

You should get a CPF Submission number and apply for CPF e-Submission as soon as you intend to hire your first employee. You must pay the CPF contributions within 14 days after the end of the month for which CPF contributions are due, or risk paying a late fee.

Each month you must issue itemised pay slips to all employees. You must also prepare Form IR8A (reporting of employee earnings) for each of your employees by 1 March annually for their submission to IRAS.

If you’re planning to hire foreigners to work in your business, it’s important to understand the types of work visas you need to apply for, the eligibility criteria and application process.

The number of foreign workers you can employ will depend on the industry you are in, and the number of local employees earning at least $650/month that you employ. MOM has a handy calculator here.

Pitfalls To Avoid When Hiring

Many businesses make errors on payroll calculations and submissions without even knowing if they have met all statutory requirements.

Gordon Ng, CEO of HR platform, Talenox, shared: “The biggest mistake you don't want to make is to manage all these processes through Excel or other manual methods only to find out during tax submission season that there are errors or certain calculations have been done wrongly for the past 12 months.” 

Given that there are so many rules and regulations when it comes to hiring workers, keeping up with the requirements may be stressful. Mr Lai Chang Wen, Co-Founder and Chief Executive Officer of Ninja Van, emphasised the importance of getting HR software which is up-to-date with labour law. “The regulations governing hiring workers are different in each country. As a regional business, we have to use localised software so that all our offices are in compliance.”

Summing Things Up

A business is the sum of its many parts and that includes the people working in the business. So make sure you hire when the time is right, hire the right people for the right jobs, and do the right things to retain your best people. If you do that, your employees will grow in tandem with your business.

We hope you found this hiring guide useful, with the insights from our business owners and subject matter experts shedding light on the topic. Here at OCBC, we’re always looking to share great content to help you on your entrepreneurial journey.