How to Write an Employee Handbook (for Your Small Business)

Does Your Small Business Need an Employee Manual?

For too many business owners, an employee manual might sound like the kind of bureaucratic red tape that only large corporations care about. And some might not know what it is or have even thought about it. But in fact, once you start hiring more than a bunch of employees, a manual could be quite valuable.

In this tutorial, you will learn how to write an employee manual. Find out exactly what an employee manual is, why your small business might need one, and what should go in it. We'll also look at some helpful templates and examples to help you get started making your own employee manual for your small business.

1. What is an Employee Handbook?

An employee manual, also sometimes called an employee manual or a policy and procedure manual is a document that tells your team members what to expect when they work for you.

While it often takes care of practical details like vacation time, benefits, disciplinary procedures, and more, it can also be a great place to introduce your employees to the company in other ways. You can explain the values ​​of your company and the type of workplace you have in it. You can let employees know who to contact if they have questions or problems.

There is no set format for writing an employee manual. This is your document, and you can choose how you want to communicate with your employees - in fact, the tone and format you use can communicate something about your company's values. The manual can be playful or formal, contemporary or traditional, full of graphics or heavy with text.

Traditionally, it was a printed book, and many companies still use that format. But you can also make it available in digital form, perhaps accessible on a company's intranet or shared file server. That's particularly useful if your employees travel or work remotely - then they can access it from anywhere.

The basic purpose of an employee manual is to set expectations. Let your employees know what kinds of benefits and support they can expect from you, and also what standards of work and behavior you expect from them in return. Provides clarity on both sides.

When you're just starting out and only have one or two team members, you might not need an employee manual just yet - informal communication might work just as well on that scale. But as you start to expand, you will really start to see the benefits of having that clear documentation in place.

2. The Benefits of Having an Employee Manual

If you are not convinced about the need for a manual in your business, read this section to discover some of the benefits.

Create Better Workplace Policies

The main point of an employee manual is to document everything a team member needs to know to do their job. But sometimes the very act of documenting all of these things will help you come up with better ways of doing things.

You could be writing the section on attendance policies, for example, when you realize that for some job functions, it shouldn't matter if someone is late while doing work (while for others, swiping the time card at a particular time could be quite important). So you come up with a more flexible formula than the one you were using before.

Help New Employees Get Up Fast

You probably know what it's like to start a new job. Lots of new faces, an unfamiliar office, different processes, and jargons than you were used to at your old job. And you usually have thousands of questions to ask, and you feel bad about asking them because everyone around you seems busy with their own work.

A well-written employee manual is perfect for helping new hires get on their feet more quickly. While you may not read the entire book cover to cover, you can use it as a quick reference to get all your questions answered.

Avoid Constant Questions About Policies

If you don't have an employee manual, expect constant questions - not just from new hires, but existing ones as well. How many vacation days do we get? What national holidays do you pay for? What are the rules about conflicts of interest or working elsewhere?

There are quite a few things in the workplace that can cause confusion, and you could end up spending a lot of time camping out the same questions - or worse, having employees follow the wrong policies because they didn't ask.

Have Everything in One Place

Sometimes companies do have their policies documented but in a fragmented way. Some things are recorded on the intranet, but in different places, while others were simply communicated by email. When employees need to search for something, they have to embark on an elaborate treasure hunt.

This can be irritating to your team, and it is clearly not an efficient way to work. An employee manual compiles everything together in one place, so it's quick and easy to find information.

Communicate Your Values

While it's easy to get stuck in the background of policies and procedures, an employee manual is also your chance to tell the story of your company and get your employees aligned around its values. Why does your company exist? What are they working towards? What is your position on things like diversity and social responsibility? This can be a great way to keep your employees motivated and energetic and to ensure that everyone is on the same page about the values ​​of the firm.

Avoid Lawsuits

I mentioned in the first section that the basic purpose of an employee manual is to set clear expectations on both sides. That clarity can also give you legal protection.

For example, let's say you have to fire one of your employees for poor attendance or harassing a colleague. The employee might try to sue you for wrongful termination, saying that it was never made clear to him that those things were reasons to fire someone. If you have established these policies in your manual and have documented the fact that all employees are given copies of them, then you have a stronger defense.

3. What to Include in an Employee Manual?

As I mentioned earlier, there is no required format on how to write an employee handbook, but there are some common sections that many companies and small businesses include. In this section, we will look at those sections and what you would like to include. But keep in mind that you can always add to it or customize the document to cover what is important to your business.

Important note: In some jurisdictions, there are labor laws that stipulate particular things that you must include in your employee handbook. Envato Tuts + has a worldwide audience, so we won't be able to cover all the local variations here. Be sure to research local regulations that may apply. It's also a good idea to have an employee handbook reviewed by an attorney so that you can make sure that you are complying with all relevant laws and not making yourself vulnerable to future litigation.

OK, now let's take a look at common sections to include in a small business employee handbook.

Company Summary

Employee manuals often begin with a general introduction and company overview. You could include a short history of the business, a timeline of key events, and a charter of important values ​​and goals.

Security Politics

Your employees spend a lot of their time at work, and their safety is the most important thing. This section tells people what to do in the event of an emergency or accident at work, how to access first aid, fire safety procedures, and more.

Diversity and Equality Statute

This is your opportunity to show your commitment to equal opportunity in the workplace and say that you will not tolerate discrimination or harassment based on age, race, religion, sex or sexual orientation, disability, etc.

You can also elaborate on what constitutes discrimination and harassment, so that people are clear about what is being covered, and give employees a procedure they can follow and believe they are being harassed or discriminated against in the workplace.

Payment and Benefits

It gives details of when and how employees can expect to be paid, how taxes and other deductions will be taken, and if they will be eligible for more time (if some employees are paid overtime and others not, or if some are full time and other part-time, make those classifications pretty clear.) You can also include details on other types of compensation such as bonuses and storage options if applicable.

Then itemize any company benefits you offer, such as health insurance, pensions, and more. You can also include details of abandonment policies here, such as parental abandonment, sick leave, vacation pay, and more.

Code of Conduct

What standards do you expect from your employees? This is where you can specify everything from a dress code to the expected level of attendance and punctuality. You could also handle things like internet use and social media if you want to put restrictions on that.

It remains in you, however, as much as detail you immerse yourself. Some companies prefer not to provide harsh lists of rules here, rather than giving general guidelines and letting employees use their discretion. You will see some examples later. There may still be some things you need to be strict and clear about in your small business employee handbook, however, such as the need to keep company and customer data confidential.

Discipline and Termination

Give your employees a clear idea of ​​what constitutes the ground for disciplinary action and what kind of action will be taken. Also, let them know what they can do if they feel they have been treated unfairly. You can then set a policy for what happens in the termination event.

Keep in mind that any disciplinary procedure you outline in this section could do the trick, so be careful about committing to anything you don't want to follow in each case. For example, if you say in your workbook that you give a series of verbal and written warnings for disciplinary problems, you could get in trouble if you later fire an employee without giving them all those warnings.

Acknowledgment of Receipt

It is important to document the fact that each employee was given a copy of the manual. So have every employee sign an acknowledgment of receipt of the manual - this is usually included at the end of the book, for the employee to sign and walk away, so you can keep a copy of their personal file. In the event there is a dispute afterward, this stops people from claiming they weren't aware of the policies.

Legal News

When you have an attorney review the employee handbook, they might warn you to include extra words, for example, that the employee handbook is a guide, not a contract, and that future work is not guaranteed. The verbiage will depend on where you are located and your particular situation, so be sure to get individual legal advice.

For better employees' management start using HRMS