Before you hire: a quick check for UAE small businesses

Hiring is often the right move, but it's also the biggest fixed cost most small businesses add. Before you post the job, work out what the person will really cost each month.

The cost beyond the salary

On top of the salary, budget for:

• Visa, work permit and Emirates ID fees, which vary by emirate and free zone.
• Health insurance, which employers in the UAE have to provide.
• End-of-service gratuity. Under UAE labour law it builds up at 21 days of basic salary for each of the first five years, so set a little aside every month.
• Housing, transport or other allowances you agree in the contract.
• Equipment, software licences and training in the first months.

Add these up for the role you have in mind. Together they can come to a lot more than people expect.

Can your profit carry it?

A common rule of thumb: before you hire, your monthly profit should cover the full cost of the new person at least three times, unless the role will bring in revenue quickly. That leaves room for a slow month and for the time it takes someone to get up to speed, which is often two or three months.

Questions to answer first

• What will this person take off your plate, and is that work growing?
• Could a part-time contract or a freelancer cover it for six months first?
• If sales dropped by a fifth, could you still pay them?
• Who will train them in the first month?