Attach this piece to the neck of the minifig, make sure it goes down all the way.
Pull the handless arms up to the corresponding technic holes, they do not come up all the way, so don't get worried if you can't attach the hands
Rest the hands in the corresponding technic holes, they will not connect to the arms, but if it is positioned correctly they may sort of click against them.
The final step is merely to attach the head (only to be detached later).