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If you’re a new or burgeoning business that hasn’t gotten down to setting up different important business processes or writing an employee handbook yet, suffice it to say you’re not alone.

Employee Handbook for Small Businesses
Employee Handbook for Small Businesses

According to a survey conducted by Gusto, a platform that is dedicated to aiding small enterprises in their ventures, only a meager 26% of small businesses (consisting of 1 to 9 employees) have employee handbooks.

The figures are far better (87%) for small enterprises with 10 to 200 people in their employ. The obvious question that arises: how can a company make an employee handbook, and more importantly, why should they in the first place?

This article will endeavor to discuss all of that and attempt to dive deeper into the dos and don’ts, tips involved in creating a handbook, and so forth.

What is an Employee Handbook?

An employee handbook often referred to as a business playbook, employee manual, and employee field guide is a comprehensive company document given to employees once they become a part of the workforce.

Essentially, the document conveys a business’s objective & mission, its policies, processes, procedures, and the expectations it has of its employees while they are under a company’s contract.

Not only does an employee handbook describe the responsibilities of the staff, but it also protects their rights as well.

Often the first document to be received along with their welcome email, an employee handbook allows a new hire to feel equipped and ready to take on their daily task from the get-go, thereby increasing their efficiency manifold.

An employee handbook immediately becomes an asset for a business once it’s able to keep the staff working as a team with their respective job roles aligning with each other. The guide also gives employees the opportunity to be protected and accountable.

Businesses have come quite far in terms of transitioning from creating thick, long-winded employee handbooks to business manuals that are crisp, to the point, and more importantly, a document that new hires, as well as existing employees, will come to appreciate.

As such, the modernized version of employee handbooks more or less outlines the rules of the organization in one place.

If done in the right manner, this is the resource that employees would turn to when they find themselves in need of instruction, a sense of direction in their tasks, and gain a general understanding of each employee’s tasks and how it ties in with the rest of the team.

When Should a Company Create an Employee Handbook?

Although there is no hard and fast rule that businesses must have an employee handbook at all costs, the benefits the guide provides have allowed it to become an essential makeup of enterprises at large.

Even though there aren’t any specific laws that require companies to create handbooks aside from letting employees know of all their rights, businesses make it a point to include the guide as an essential aspect of the company’s workings especially because it can bring about desirable company culture and optimize the workflow for employees.

Whether you’re a business with less than 10 employees or one with about 200 of them, if a manual can reduce and even resolve conflict within teams and the workforce in general, there is every reason to make one.

Another major upside to creating an employee handbook for your company is the fact that it makes the transition into a new job seamless, simple, easy, and without complications. New hires don’t have to worry about adjusting to an alien environment when they’re equipped with all the necessary tools they would need to overcome challenges that are bound to arise.

Not only that, this smooth transitioning and being able to determine company policies & culture allows employees to appreciate the organization they’re working for, effectively creating a sense of loyalty and a level of engagement that business owners would not have previously thought possible.

Employee Handbook Template

A business’s employee handbook depends largely on the industry it belongs to and the number of staff on the payroll. The more employees you have, the more things you would have to include as a key aspect of the handbook.

Nevertheless, there are a number of essential elements that every business manual should accommodate as they would directly affect decision-makers within the company and the workforce at large.

Now let’s identify all the components that make for a comprehensive employee handbook template.

Employee Handbook Template
Employee Handbook Template

Welcome Message to Set the Tone for Your Business Culture

Although it’s only natural to get to the crux of the matter immediately, company owners would agree that a well-thought-out business manual must come with a welcome message that ensures the beginning of a long-lasting relationship.

Furthermore, a pleasant and sincere welcome message allows employees to take into consideration the value a business can offer them since an employer-employee relationship has always been a two-way street.

You can get creative with your onboarding message by sprucing up a short video clip wherein the CEO greets and welcomes new hires into the company. The video could make it to the list of attachments on an employee’s welcome mail.

Aside from this, businesses must make it a point to include a quick history of the company and how it came about with a brief focus on what the enterprise’s vision and mission statement are all about.

And to all this, the welcome section must have a quick walkthrough of company values and how it could serve customers. You can also choose to talk about your product, its uniqueness, and how it ties in with the niche market. The welcome message can end with a quick description of your customer base and target audience and this process can be automated using BPM tools.

When a new employee glances through all the pointers mentioned above, the thorough albeit brief run-through affords them a complete and ubiquitous view of the organization, thereby allowing them to feel equipped and ready for the challenges to come.

Employment Basics

This section of the employee handbook is a company’s chance to determine what its relationship with its workforce is going to be like. It is also the appropriate moment for a business to introduce possibilities, set expectations, and let employees know more about their role and where they stand concerning the company.

Businesses can anticipate all sorts of queries from the staff, set the general terms and conditions of the contract, address job classifications, and so on.

Here’s a look at some of the key contents you can include in this section of the manual.

Employee contract - Here, you need to define all the different kinds of contracts your company holds with employees. This would consist of full-time employees, those who work part-time, on a freelance, contractual, or project basis, those who intern at the organization, and seasonal employees as well.

Equal Employment Opportunity (EEQ) statement - If you want your business to be viewed as one that functions based on meritocracy and equal opportunity, this statement should make its way into the handbook.

What is your recruitment process like? - This sub-section allows companies to talk about all the steps involved in their recruitment, shortlisting, and hiring process. What is your company’s referral program and hiring procedure like? How do you source talent? You can explain all these common concerns here.

Attendance - To make your attendance policy completely clear so that there is no doubt as to what is expected, businesses need to outline the guidelines. This includes talking about what must be done in case an employee isn’t able to make it to work.

Workplace Policies

One of the first things new hires and even current employees worry about is the safety and comfort level of the organization they’re working in.

The workforce cannot give it their all if they’re constantly looking behind their backs because topics such as diversity, anti-harassment, and health & safety policies have not been duly addressed. So this section of the handbook can be dedicated to explaining all such necessary details.

Let’s have a look at all the workplace policies businesses should consider addressing.

Diversity and inclusion policy - Ensure that your vision for diversity and inclusion is clearly stated in this section of the manual. International corporations are especially taking this aspect of workplace dynamics very seriously to the point of making it a business imperative.

Confidentiality protection - It is important to set certain parameters to make sure that your staff doesn’t divulge company information that you would rather keep within the four walls of your organization.

Data protection procedures - Since we live in an ever-evolving digitized space, employees want to know if all of their data will be kept private and secure. As such, businesses need to take the necessary steps to ensure that protection procedures are given their importance and assure new hires of the fact.

Harassment and violence policy - A strict policy that lists out everything that falls under the bracket of harassment and violence at the workplace allows businesses to provide necessary warnings while also ensuring that employees remain protected at your business.

Carefully describing behaviors that will not be tolerated, effectively leading to disciplinary/legal action should an employee resort to displaying such behavior, is a sure deterrent of abhorrent actions from taking place.

You can also talk about the various ways in which an employee can report cases of harassment and violence to HR or concerned authorities in this section.

Safety and health needs - This aspect of the workplace includes all the circumstances, processes, and procedures that fall under the safety, well-being, and health of an employee. This section must therefore list out the guidelines that staff need to follow to maintain an environment and culture at the workplace that is safe and conducive to the mental and physical health of employees.

Code of Conduct

This section of the business manual is meant to lay out a set of rules and guidelines that allow employees to understand what is expected of them in terms of their behavior at the workplace, how their interactions with other staff, clients, and customers must be, and so forth.

Such guidelines ensure that everybody’s boundaries stay protected. Let’s have a look at some of the necessary rules that should be included in the handbook.

Dress code - If you have a specific dress code policy for work hours, you can briefly state your specifications in this section. Even if the company doesn’t abide by a dress code, you can inform the workforce of the same to avoid any confusion regarding the same.

Conflict of interest - With the conflict of interest policy in place, businesses can ensure that whenever a conflict between the organization and an employee arises, these procedures will serve as guidelines that need to be followed as a result.

Other elements that you can include in the code of conduct section could involve an employee fraternization policy, a policy regarding the employment of relatives, and procedures related to workplace visits made by outsiders. All these elements must be written in a manner that is relevant to the organization.

Compensation and Development

A sure-fire way of ensuring employee engagement, retention, and loyalty towards an organization is by rewarding your workforce for a job well done. Furthermore, compensations allow businesses to motivate their workforce while also assuring them of how valued they are by the company.

Salary breakdown - One of the main things that employees want to be completely sure of is the breakdown of their payroll. What is the mode of payment? What is the payment cycle like and when are salaries going to be credited? All these are questions you need to address in this section of the manual.

Employee bonus - Bonuses are something employees always look forward to and often a motivating factor to excelling at the workplace. As such, businesses need to outline whether bonuses are paid on a monthly, quarterly, or annual basis.

Performance management - It is crucial for employees to know how your business conducts its performance management procedures for them to give it their all.

Understanding what your evaluation process is like and what the company’s definition of success is like would simplify things for your staff. Aside from addressing these questions, you will also have to define the objectives of performance reviews to give employees a head start.

Training and development opportunities - Another way of incentivizing your staff would be to talk about the various learning and upskilling programs afforded by the company.

Benefits and Perks

Most often, there’s some amount of confusion and surprise associated with finding out the many benefits and perks that companies have to offer. This is usually because such advantages are not explicitly mentioned anywhere except maybe through word of mouth or the occasional email.

As such, listing out said benefits (non-wage compensation) and perks (incentives) in this section will do away with all that.

Employment health - A major concern that employees typically have is to do with what sort of employee health plans organizations can offer them. So, you can use this section to break them down in detail. Mention all the possible healthcare options offered by the company, how staff can apply for it, which aspects of healthcare it covers, and so forth.

Workers’ compensation - Although companies must take every precaution to make the workplace environment a safe one, they are legally obligated to compensate employees in case of mishaps. This section could be a brief walkthrough of all the circumstances that makes compensation necessary in your company.

Remote work benefits - Since a work-from-home culture is fast becoming the norm for companies at a global level, setting some ground rules, outlining expectations, and how meetings are going to pan out, is crucial to the smooth running of businesses.

Other benefits and perks that companies usually include in this section involve talking about employee expenses (from business trips to upskilling courses), outlining parking policies, and caring for company equipment.

Working Hours, PTO, and Vacation

If asked, employees will be quick to point out how much more manageable and organized things would be at the workplace once they have a complete understanding of the official work timings, sick leave policy, and vacation days afforded by the company.

PTO and Holidays - Details regarding paid time off (PT0) should employees apply for leaves, how they can apply for it, and what their vacation days look like are all very important to the working staff. By being able to refer to a complete list of holidays (paid) in an employee handbook, they can plan and manage their time, mental and physical health far more efficiently.

Sick leave - To create a work environment where employee satisfaction is given priority, businesses must chalk out what their short and long-term sick leaves look like. Many companies even have a predetermined number of sick leaves that they state in this section of the handbook.

Parental leaves - Paternity and maternity benefits are something plenty of businesses are fast beginning to include as part of their paid leave policies. Here you can specify how many weeks a parent can afford to step away from their work.

Employee Resignation and Termination

In the event of an employee resigning from a company or his contract being terminated for a variety of reasons, businesses must ensure that staff know and understand the standard procedure involved. If your company believes in taking disciplinary action for certain circumstances, those terms must be stated here as well.

Progressive discipline policy - Many organizations have a process wherein they attempt to correct an employee’s workplace conduct and/or performance by supplying constructive feedback and criticism. Often, the feedback involves following through a series of steps for the disciplinary action to result in a positive outcome. You can emulate the same procedure in this section if necessary.

Resignation process - Here, businesses can talk about the procedure involved in handing out one’s resignation. Details such as what the notice period is and how to claim for reimbursement can be discussed here.

Employee termination - This section of the handbook can be dedicated to explaining the internal process involved in the termination of an employee’s contract the employee off-boarding process, the reasons, and circumstances that would result in termination, and so forth. If your business has a severance package, you can mention the conditions of the same here.

References - This section would be a simple description of what the company’s reference process is like and the steps involved in acquiring them.

Tips on Building Your Employee Handbook

In order for the workforce to make full use of the employee handbook, businesses have to present it in an engaging, interesting, and creative enough manner. As such, here are some of the tips companies should keep in mind while making the manual.

Tips on Building Employee Handbook
Tips on Building Employee Handbook

1. Make Information Visually Appealing

If you’re set on employees reading through the entire business manual thoroughly, without skipping through important details, you would have to put some effort into not making it look boring, uninteresting, and plain.

To make every page of your manual engaging, ensure that you include plenty of images, GIFs, interesting how-to videos, tables, popular memes that are relevant to your company/industry/niche, graphs, illustrations, icons, charts, and infographics. Without these elements, your employee handbook will end up being the next thing gathering dust on an employee’s shelf.

2. Keep Things Simple

Clear and direct communication is what makes an employee handbook readable and noteworthy. Businesses must understand that the more legal and technical jargon they use, the more disinterested employees become in referring to it. The last thing you need is for employees to have more questions when they read the manual, effectively ruining the purpose of the manual.

So it would be in everyone’s best interests to keep complicated words to a bare minimum, thereby communicating all your expectations and guidelines successfully.

3. One Common Source of Information

Often, business manuals are a  combination of various documents and video files that leave employees scrambling and in a perpetual state of confusion because they aren’t able to recover a specific document that has to do with a specific policy. Instead, you can choose to do things differently by maintaining just one document or file containing all the necessary information.

This way, you can save a lot of heartache, time, and energy in moments of emergency, an important client meeting, or some other scenario that requires access to the manual immediately.

What Are Some Good Employee Handbook Examples?

Although you might have chalked out exactly what your employee handbook should look like and include -- When you’re actually getting down to creating one of your own, references, especially those that look catchy and engaging will make the task all the more palatable and seamless.

As such, here’s a look at some popular handbook examples that are worth a second look.

Nordstrom - The luxury department store’s idea of an employee handbook is a single card that states “use good judgment in all situations”. Aside from its extremely minimalistic and simple design, the message the brand wishes to convey is how much they value their employees and their judgment. It is only when you trust your employees to such an extent that you become confident enough to depend on just one thought-provoking idea.

HubSpot - Another brand that thrives on simple design and structure, Hubspot’s employee manual is a series of slides that the platform has shared on SlideShare, essentially making it accessible to one and all. This ties in with their idea of openness and transparency.

Netflix - Contrary to what one would think a video streaming platform’s business manual would look like, Netflix’s guide is short, to the point and crisp in its presentation and design.

What businesses can learn from the examples shown above is the fact that a company’s employee handbook is its brand image. Accordingly, organizations must create their manuals keeping in mind that the ideas, guidelines, and procedures mentioned are relevant and true to the organization.

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