Eight in 10 Fast Growing companies have an Employee Handbook updated in the past 12 months. That’s what the data shows from our 2023 HR Survey of over 2,000 small and midsize businesses. You can download your copy of our 2023 Small Business HR Benchmark Report at no cost here.
Our survey revealed the other side of the coin as well. Nearly 40% of companies that didn’t grow last year do not have an Employee Handbook updated in the past 12 months. Here’s how to write an effective employee handbook that sets clear expectations, promotes consistency, and ensures compliance. Whether you’re starting from scratch or looking to revamp your existing handbook, this guide will help you create a valuable resource for your employees and business.
For personalized guidance or to explore HR solutions tailored to your business needs, connect with an HR expert.
What is an Employee Handbook?
An employee handbook is a document that serves as a guidebook for employees, outlining company policies, procedures, expectations, and rights. It provides employees with a comprehensive understanding of their roles, responsibilities, and organizational culture.
Beyond being a repository of rules and regulations, a well-written employee handbook can also contribute to building a positive work environment and fostering strong employee relations.
Why Is An Employee Handbook Important?
An employee handbook is one of the first impressions you make on your new hires. A recent study by Zippia found that 17% of new hires leave their new job between the first week and third month of being hired. You can hold onto these folks by proactively engaging them with a welcoming and professional onboarding process.
Your employee handbook plays a crucial role in ensuring compliance with state and federal laws, promoting effective communication, and creating a positive work environment. By providing comprehensive information and guidelines, a well-crafted handbook serves as a valuable resource for both employers and employees.
Mary Simmons, VP of HR Consulting here at Asure, lists how an Employee Handbook benefits employers and employees:
Explains the company culture
Set expectations and communicates the consequences of not following the standards explained in the handbook
Educates managers and supervisors so they can recognize issues
Ensures fair and consistent treatment of employees
Explains time-off policies and medical/dental benefits
Demonstrates the professionalism of the organization
Defense for unemployment and legal claims
The handbook can also be leveraged as a tool to attract new talent
Let’s go into more detail about how an employee handbook can help your business:
Our 2023 HR Survey revealed that 3 in 4 Growing Companies have new hires go through formal orientation to learn the company’s mission, vision, and values. Nearly half (46%) of companies that had a Down Year do NOT have new hires go through formal orientation to learn the company’s mission, vision, and values.
Your employee handbook puts your culture in writing. There should be a section of your employee handbook that details your company’s mission and what you stand for as an organization.
Legal Compliance and Documentation
State and federal laws often require that certain employment policies and laws be provided in writing to employees. Having an employee handbook simplifies this process for employers. Whether in physical or virtual form, the handbook can be readily distributed to new hires and current employees, ensuring that they have access to information regarding their rights and obligations.
By having employees sign off on receiving the handbook, employers can maintain a record that may be useful during audits or litigation related to employment laws or policies. Employee handbooks also serve as valuable educational resources for supervisors, providing guidance on company policies aligned with state and federal laws. Given the complexity of employment laws, employee handbooks assist employers in staying compliant with legal requirements.
Without clear guidelines, employees often spend valuable time seeking clarification from supervisors about company policies. This leads to wasted time and effort. Well-crafted employee handbooks proactively address common questions, enabling supervisors and managers to focus on their core responsibilities and keep employees productive.
Improves Morale and Cooperation
Handbooks have the potential to enhance employee morale and promote a sense of cooperation. By clearly outlining your company’s expectations, employees gain a solid understanding of their roles and responsibilities right from the start. Handbooks eliminate surprises and establish the groundwork for success, contributing to positive attitudes among employees.
Protects Your Company
A well-written handbook delineates the rights of the employer. It safeguards crucial employer prerogatives, such as the ability to hire and terminate employees at will. Additionally, employee handbooks can help prevent costly lawsuits by clearly articulating company policies and providing employees with a reference point.
Minimizes Conflict and Inconsistencies
Workplace conflicts often arise when employees perceive unfair treatment, particularly when company policies are inconsistent. Employee handbooks establish written policies that can be uniformly applied to all employees and situations, reducing conflicts and ensuring fairness.
An employee handbook serves as a centralized source of information, enabling employers to effectively communicate policies, procedures, and any changes that may occur. By disseminating information uniformly and promptly, the handbook minimizes confusion and promotes consistent understanding among employees.
This reduces the number of queries directed at managers and HR personnel, allowing them to focus on their core responsibilities.
Increases Awareness of Benefits and Expectations
A well-structured employee handbook helps employers explain the benefits and perks offered by the company, such as paid time off (PTO) and holidays. By outlining these benefits clearly, employers can attract and retain top talent.
Employee handbooks provide an excellent platform for effectively communicating company-provided benefits, resulting in increased employee loyalty and satisfaction.
Employee Retention and Productivity
Clear guidelines and policies outlined in the employee handbook promote employee satisfaction and engagement. By providing employees with a comprehensive understanding of their rights, responsibilities, and available resources, the handbook serves as a reference point for addressing queries and minimizing confusion.
This helps managers to lead and manage their teams consistently. By minimizing disputes and potential litigation, the handbook contributes to increased productivity and a shared focus on achieving company goals.
How to Write an Employee Handbook
Understand Your Company’s Needs and Culture
Before you begin writing the handbook, gain a deep understanding of your company’s unique needs, values, and culture. Consider the industry you operate in, the size of your organization, and the specific challenges and opportunities your employee’s encounter. This understanding will help you tailor the content of the handbook to meet your organization’s requirements effectively.
Include information about your company’s history, mission, values, and a welcome statement for new hires.
Determine the Handbook Structure
Creating a clear and organized structure for your employee handbook is essential to ensure ease of use and clarity for employees. For example, here at Asure, our employee handbook has the following sections:
Employment Status & Records
Employee Benefits Program
Work Conditions & Hours
Leaves of Absence/Time Off Work
Employee Conduct & Disciplinary Action
Security & Privacy
Address Legal and Compliance Requirements
Ensure that your employee handbook complies with all relevant federal, state, and local laws and regulations. Include policies on anti-discrimination, harassment prevention, equal employment opportunity, and any other applicable legal obligations. Staying updated with employment laws and seeking legal counsel when necessary is crucial to ensure compliance.
Include an employment-at-will statement, EEOC policy, and state-mandated discrimination and harassment laws.
Define Employment Policies
Cover policies related to employment, including hiring procedures, onboarding, work schedules, attendance, time-off policies, performance evaluations, promotions, and disciplinary actions. Clearly communicate expectations and guidelines for each policy to avoid misunderstandings and promote consistency.
Be sure to include FMLA policies if your business is covered by this federal law, disability policies, remote/ hybrid work policies, and rules about meal and/or break times.
Remember, your state or local municipality may have laws to which you must adhere. It’s wise to have an HR expert review your handbook for compliance to protect your business from litigation and time-consuming governmental investigations.
Communicate Benefits and Compensation
Detail the company’s benefits package, including healthcare, retirement plans, vacation policies, and any additional perks or employee assistance programs. Provide clear information on how employees can access and utilize these benefits, including the necessary forms and procedures.
Establish a Code of Conduct
Outline expected behavior and conduct within the organization. Include policies on dress code, professional communication, conflict resolution, social media usage, and confidentiality.
Define the consequences of violating the code of conduct and outline the steps for reporting concerns or complaints.
Include a final section where the employee can sign off on having read and received the handbook. You might want to have the employee acknowledge at-will employment and what that means if that’s your arrangement. You can also ask the employee to sign off on a drug and alcohol policy in this section.
Tips for Writing an Employee Handbook
Use clear and concise language: Avoid complex jargon or technical terms that may confuse employees. Use plain language to ensure easy comprehension.
Maintain a positive tone: The employee handbook should promote a positive work environment and align with the company’s values and culture. Use encouraging language when addressing policies and guidelines.
Keep it updated: Review and update the handbook regularly to reflect changes in policies, procedures, or legal requirements. Inform employees of any revisions and ensure they have access to the most up-to-date version.
Provide examples and scenarios: Use practical examples and real-life scenarios to help employees understand the practical application of policies. This makes it easier for your team to grasp the intended behavior and expectations.
Make it easily accessible: Ensure that the handbook is readily accessible to all employees. Consider providing a printed copy or making it available electronically through your company’s intranet or a designated HR platform.
Your employee handbook is a business tool. Without it, you are behind your competition when it comes to retaining talent and productivity at work. With an employee handbook, you also make your business more vulnerable to lawsuits.
We all know communication is key. Prove it by crafting an employee handbook that explains your policies and your understanding of employment law and sets new employees on the right course to be wildly successful.
An employee handbook should be a living document that evolves as your organization grows and changes. Remember, our survey data showed that 8 in 10 Fast Growing companies had updated their Employee Handbook within the past 12 months.
For help with your employee handbook, contact a friendly HR representative at Asure.