A few years ago, I spoke to a woman running a product business who had just been approached by her dream client. The catch? The order was large enough that she would have to move from outsourced manufacturing to in-house production. That meant leasing space, buying equipment and, crucially, becoming an employer.
After weighing it up, she turned the contract down and put the business on hold. It was not a failure; it was a deliberate choice. With a young family and a working style that suited lean, project-based work, she did not want the legal, financial and managerial weight of employing staff. She was happy to use freelancers and suppliers, but being an employer was a different proposition entirely.
Her story still resonates. The question of whether to hire or not to hire staff is one of the most consequential decisions a UK business owner makes. For many women entrepreneurs, growth is framed as “taking on staff,” yet that is only one model. The UK labour market offers several legitimate ways to get work done, each with different costs, risks and obligations. The key is choosing the structure that fits your business, your personality and your stage of life.
Why being an employer is not for everyone
Employing someone in the UK is about far more than paying a wage. When you take on an employee, you take on a set of statutory duties: providing a written statement of employment particulars, paying at least the National Living Wage or National Minimum Wage, operating PAYE, deducting income tax and employee National Insurance, and paying employer National Insurance contributions. For the 2026/27 tax year, HMRC charges employer NICs at 15% on earnings above the £5,000 secondary threshold, although the Employment Allowance can reduce this bill by up to £10,500 for eligible businesses.
There are also pension duties. Under auto-enrolment, The Pensions Regulator says most employers must enrol eligible staff into a workplace pension and contribute at least 3% of qualifying earnings, with total minimum contributions of 8%. Then there is holiday pay, statutory sick pay, maternity, paternity, adoption and shared parental leave, and the day-one right to request flexible working set out in the Employment Relations (Flexible Working) Act 2023. Dismissing someone who is not right for the business is not impossible, but it must follow fair process; otherwise, you risk an unfair dismissal or discrimination claim.
For some founders, the people management side is equally daunting. You are not just buying skills; you are responsible for motivation, performance, wellbeing and, sometimes, personal problems that spill into the workplace. If you prefer to focus deeply on your craft rather than manage a team, employment may feel like a distraction rather than an accelerator.
The contract and freelance route
This is why many UK business owners choose to work with freelancers, contractors, virtual assistants or agencies instead. You can buy in expertise for a specific project or retainer, scale up and down as demand changes, and avoid the ongoing obligations of employment.
However, “freelancer” is not a free pass. UK employment status falls into three main categories: employee, worker and self-employed. A worker sits in the middle: they may be on a casual or zero-hours contract and are entitled to the National Minimum Wage, holiday pay and rest breaks, even if they are not a full employee. New zero-hours reforms taking effect in 2026 give eligible workers the right to request guaranteed hours. Our Zero Hours Reform 2026 guide explains the small print for women employers.
A genuinely self-employed contractor has more control over how, when and where they work, often supplies their own equipment, can send a substitute, and takes on financial risk. Getting the status wrong can be expensive. HMRC’s off-payroll working rules, commonly known as IR35, mean that medium and large private-sector clients are responsible for deciding whether a contractor is genuinely self-employed. If you are a small business, the contractor’s own limited company usually remains responsible, but you should still document the relationship carefully. HMRC’s Check Employment Status for Tax (CEST) tool can help, and a well-drafted contract should reflect the reality of the working arrangement, not simply label someone as self-employed. Our IR35 guide for women contractors sets out what this means in practice.
When it works well, the freelance model gives you access to specialist skills without the overhead. You can hire a bookkeeper, a web developer, a marketing consultant or a virtual assistant for a few hours a week, review the arrangement regularly, and part ways cleanly if priorities change.
When employees do make sense
That said, staff are sometimes the right choice. If you need consistent presence, long-term loyalty, in-house knowledge or direct control over how work is done, an employment relationship is usually stronger. Employees can embody your brand, build customer relationships over time, and grow with the business in a way that a rotating cast of contractors may not.
There are also practical considerations. If you plan to seek investment, apply for grants or tender for public-sector contracts, having a permanent team can signal stability. And for some regulated sectors, employing directly may be a requirement.
To hire or not to hire: how to decide
The decision is not simply “can I afford a salary?” It is “can I afford the total cost and responsibility of employment, and do I want it?” Start by asking:
- Is the work ongoing and central to my business, or project-based and specialist?
- Do I need to control how, when and where the work is done?
- Am I prepared to handle PAYE, pensions, holiday cover and HR issues?
- Would a freelancer, agency or virtual assistant give me the flexibility I need?
- What does my cash flow look like over the next 12 to 24 months?
It is also worth being honest about your working style. If you dislike managing people, avoid it. If you thrive on building a team, lean in. Neither choice is more virtuous than the other.
Action steps before you hire anyone
- Calculate the true cost of employment, including employer NICs, pension contributions, holiday cover and payroll software.
- Check the latest National Living Wage and National Minimum Wage rates on GOV.UK before advertising any role. From April 2026, the National Living Wage for workers aged 21 and over is £12.60 per hour, following the Low Pay Commission’s recommendation.
- If you choose freelancers, document the working relationship and use HMRC’s CEST tool to check employment status.
- Speak to an accountant or HR adviser before taking on your first employee or contractor. Our Human Resource Toolkit for Small UK Businesses covers the essentials.
Final thoughts on your hiring decision
The entrepreneur I interviewed did not close her business because she lacked ambition. She made a values-based decision about the kind of business she wanted to run. In the UK, you can build a successful company with employees, with a network of freelancers, or as a solo founder using outsourced support. The right answer is the one that matches your goals, your finances and your life.
Before you take anyone on, check the latest guidance on GOV.UK or speak to an accountant or employment adviser. Employment law and tax rules change frequently, and a small investment in advice at the outset can save considerable cost and stress later. If you are still weighing up the decision to hire or not to hire, start with the numbers, then choose the model that lets you do your best work.
