In order to ensure the suitability of new employees, the manager should have in place appropriate recruitment procedures.

Typically, such procedures would include an analysis of the specific role (job description), interviewing against that job description and undertaking appropriate due diligence checks on new employees. Such due diligence checks are likely to include seeking formal references. The recruitment procedures should also comply with relevant employment law, such as equal opportunity and/or anti-discrimination legislation.

Written terms of employment should, if possible, be in place by the time an employee takes up appointment. Employment may also need to be conditional upon regulatory approvals. The fundamental determinant in selecting an individual for any particular role should be the competence of the individual to carry out that role.

Some Hedge Fund managers find it helpful to develop a staff handbook setting out employment policies, terms and conditions.