How to Create an Employee Handbook
An employee handbook can be a manager’s best friend.
Done right, employee handbooks can boost productivity and employee engagement, assist in conflict resolution, and even protect businesses during legal battles. They quickly let new employees know about the company’s values, what they can refer to human resources or their managers to know, and describe how the work environment should function, complete with a code of conduct to keep everyone in line (or, at least, accountable).
Put simply, every business should have one.
In this guide, we’ll discuss how small to mid-sized businesses can create practical employee manuals. Read on to discover what your handbook needs to include.
What is an Employee Handbook?
An employee handbook is a living document defining your policies and processes. It clarifies what you expect of employees and what they can expect of you.
Within this handbook, new and existing employees should find policies and guidelines surrounding:
- Legal and disciplinary
- Company processes
- Pay and perks
- Pay rises
- Working conditions
- Confidentiality agreements
- Working hours
- Paid and unpaid leave
The handbook should also outline your mission and values and give a strong, accurate insight into your company culture.
Each new employee must read through the handbook as part of the onboarding process, and it should be referred back to when necessary as the ultimate guide or template for how they should act.
Why Do You Need an Employee Handbook?
While employee handbooks are not a legal requirement, they are a handy tool for business owners, managers, and employees – no matter how big or small the company.
Here are the top reasons you should create an employee handbook:
1. Defends you against employee claims
No CEO or manager wants to come up against a lawsuit or other legal action from a current or former employee. Unfortunately, this is one of the risks of running a company, and therefore it is prudent to be prepared.
Your company handbook is a part of this preparation.
If you face legal action, an employee handbook proving your company applied “reasonable care” towards the employee will help to build your case.
This is why it’s crucial to include an acknowledgment page within the handbook. The employee’s signature here will show they read the handbook and agreed to its terms and conditions. It’s not as filled with legalese as an employment contract, but it is one layer of protection for your business.
2. Communicates expectations
Without a centralized document communicating policies and rules, employees can misinterpret what you expect of them. If they breach employee guidelines, it’s difficult to prove you delivered the rules in the first place.
An employee handbook that clearly sets out what is expected of part-time and full-time employees, and what they can expect from their employer, removes the confusion from happening.
When difficulties arise, it is easy to refer back to the handbook and see who broke the company rules. The document can then serve for fair conflict resolution without conflicts of interest.
3. Helps you treat all employees consistently
When employees feel like they are being valued equally as others, they become more engaged and productive.
This benefits their job experience and your bottom line — everyone wins.
An employee handbook counters favoritism by ensuring that every team member has the same rules and is held accountable in the same way.
People can’t claim they have been treated unfairly if you treat them all by the (hand)book.
However, to really eliminate unfairness in the workplace, you must ensure the handbook is at the center of everything you do. Make it a significant part of the onboarding process and ensure managers act according to its written word.
4. Saves time for the administration
Your administrative team will save a lot of time when all policies and guidelines are in one clear, up-to-date document readily available.
While you should talk about things within your handbook and not just hand it out, the documentation enables you to focus only on the most important ones — the rest they can find in the handbook.
5. Helps onboard new employees faster
Onboarding is one of the most critical managerial tasks. It sets the tone for the employee’s time at the company and can leave them either engaged from day one or disenfranchised.
You want your employee’s first day to be enjoyable as well as informative. Endless presentations on various company policies and guidelines are unlikely to achieve that — it’s nearly impossible to soak up so much information in a short period of time.
Ask new hires to read through the employee handbook to avoid information overload and use the onboarding period to quickly ramp them up.
Your employees will thank you for having all the information they need in one document.
What Goes Into an Employee Handbook?
If you want your handbook to be useful, you need to spend plenty of time focussing on the content.
Here’s what you should include.
1. Job expectations and requirements
This section should cover everything your employees need to do to fulfill the requirements of their role. Job expectations and conditions set out the basic rules for working at your organization.
Consider answering these questions:
- What time should they start and finish work?
- How should they clock on and off?
- What is your attendance policy?
- How long can employees take for lunch?
- Is travel required?
- Is remote working permitted, and what is the process?
- Is there a flexible working policy?
- What is the workplace dress code?
Here, you should also explain what happens when these requirements are not fulfilled.
For example, say your employees work from 9 am to 5 pm in the office each day.
What happens if they arrive at 9.10 am on most days? Is this acceptable, or will it trigger a meeting with the manager?
What would happen if they come at 9.30 am five times in a month?
For some companies, arriving at 9.30 am wouldn’t be a problem as long as the employee worked until 5.30 pm to make up the time. However, for others – especially those involving shift work – consistently being late would make grounds for a disciplinary procedure.
There’s no right or wrong answer here — the rules are yours to make.
The important thing is that working hours and all the other information outlined above is detailed in the employee handbook, alongside your policy for when these rules are breached, so employees know what to expect.
2. Technology use and security policies
We work in an era of hotdesking and remote working, so many companies supply their employees with laptops, tablets, and cellphones.
However, the line between professional and personal interaction with such technology can easily become blurred. This means it’s more important than ever to have a policy surrounding equipment.
Your handbook should include all information about the technology you find important to share. That can range from supplying the team with equipment and terms for a return to BYOD, and social media policies.
Think about this: What can and can’t employees do with the equipment you supply them?
For example, can they use social media on work devices? Can they make personal calls on their work phone? Are there any websites you want to ban them from visiting on work devices?
Furthermore, it’s vital to cover rules surrounding password management, data classification, where devices can and cannot be kept overnight, and antivirus and virus management.
3. Communication rules and glossary
Here, set the rules for employee communication with customers, management, and each other.
If an employee has a problem — who should she or he contact and in which way? Should they send an email, Slack message, or call someone on the phone? How to communicate urgent versus non-urgent issues? Is there a “don’t disturb” hour?
Setting such communication rules will help you have a more productive team. Your employees don’t enjoy constant interruptions, nor does the management, so try to add some guidelines to communication.
Also, if you work in a jargon-heavy industry, it’s also helpful to include a glossary in your employee handbook. This should consist of industry terms, as well as the lingo used in the office.
4. Vacation/Leave policies
Codified vacation and leave policies should be an essential part of your employee handbook.
Explain how many days of vacation leave each employee is entitled to, and if this increases with the number of years they have worked at the organization. Set process for vacation leave booking system — how much in advance employees must ask for vacation?
Include guidelines for whether vacation leave can be canceled, and under what circumstances.
Your policies for unpaid and paid time off (PTO), sickness leave, and absences must also be stated.
Focus on limits and consequences for these types of leave. This includes answering questions like:
- How many days of paid sick leave are employees entitled to?
- How many sick days are employees allowed before they must present a doctor’s note?
- Your maternity leave policy
- Allotment of vacation time
- What are the instances in which employees can take unpaid leave and how much notice must they give?
- What is your policy surrounding bereavement leave and other family emergencies?
When employees know the rules for absence and when to ask for leave, they will cause less disruption, and organizing the schedule will be more convenient. Include explanations of laws such as the Family Medical Leave Act (FMLA).
5. Paycheck and benefits
This section is designed to discuss monetary compensation for employees, as well as additional benefits.
Include the payment information like salary schedule, deduction rules, how is overtime paid, and explain whether you cover travel expenses.
For benefits, if you cover tuition costs or pay for courses, add that. If your employees are entitled to any commute benefits like free parking, or 401(k) plans, communicate that as well.
Here you can also talk about promotion and pay rise policies.
- What is your promotion policy?
- How are internal vacancies advertised?
- How are applicants scored and chosen?
- Are employees entitled to pay rises each year? If so, how much?
Detail whether bonuses are awarded and to whom, and the conditions that must be met to receive these bonuses.
6. Core values and company culture
Here is your chance to tell new employees who you are. Are you relaxed or formal? What are the core values at the heart of the company?
Selling your brand to new and current employees plays a role in your company’s success.
Start with your core values. If integrity and honesty are your focus — say that. If you’re all about going above and beyond when servicing your clients — share that philosophy with employees.
You’ll also want to detail your discrimination policies. Does your code of conduct include anti-discrimination practices? How about methods of equal employment opportunity? What happens in the event of profiling, or sexual harassment? Now’s the time to include all of this, as well as procedures for handling issues of these natures.
Core values greatly determine your culture. Try to share the feel of your company through this document.
Here are some ideas for explaining company culture:
- Do you all go to play basketball on Thursday nights?
- How do you celebrate birthdays and work anniversaries?
- Is there a vaccine mandate?
- Do you do charity fundraising together?
- Are there regular performance reviews?
Company culture is a huge part of why job seekers choose to apply for positions with certain brands, and why other businesses struggle to attract and retain employees.
In order to engage your new employees, you should highlight your company culture in your employee handbooks too.
7. Your company’s story and mission
Alongside your values, your company mission must also be prominent within the handbook. This gives all your employees a common purpose and goal to work towards.
Include a story of how the company started and how it has grown. Don’t be afraid to get a little personal with this, and include any challenges and triumphs along the journey.
This will help your new employees to understand why they do what they do, and really get behind your efforts to make the business a success.
Besides these ideas, you may want to include other sections specific to your industry or the way you work. But as long as you include the seven points detailed above, you’ll have all the content needed for a truly effective employee handbook.
How to create an effective employee handbook
Before you begin putting together your employee handbook, you need to consider how best to structure and present it, as well as the logistics of compiling such a comprehensive document.
You need your employees to want to use your employee handbook, so it needs to be usable. Simply printing out a dry collection of policies and regulations may not achieve this.
Here are our tips for ensuring your employee handbook engages your staff.
1. Consider the format
There are so many different formats you can choose for your employee handbook – and you can stick to one or use several.
The benefit of presenting your handbook as a PDF is in the delivery. PDFs can be sent by email, downloaded from the company intranet, or printed out.
However, PDFs can be more tricky to update and alter than other documents.
Having an employee handbook in print is more tangible – many employees are more likely to take a hard copy seriously.
Keeping it on their desk means it’s easy to check – but it’s also harder to update and could be easily misplaced. If you do go down the print route, consider publishing a digital version too.
Website / Intranet
Dedicate a section of your website or intranet to your employee handbook. This will make it easy to find and navigate from anywhere. You could even include a quiz to make sure they’ve digested the information.
You can even turn your employee handbook into an app. This is a very user-friendly option.
The most important thing to consider is the audience you’re trying to engage. If you have a young, tech-literate company, they’re more likely to be engaged by the app or intranet option. More traditional professionals may prefer print and PDF.
2. Use appropriate language
Make sure the content is clear and easy to understand and avoid using too much jargon. Write in simple language to make sure every rule and guideline can be understood and never misunderstood.
This document needs to be the backbone of your company, and the best way to do this is by ensuring it clearly communicates the message.
3. Get a legal review
If your employee handbook will assist you in any future legal battles, you must ensure it is watertight, legally-speaking.
Ask your lawyers to review the document.
Instruct them that there should be no cases of discrimination within the document whatsoever. State laws vary so you need to assure the document is compliant with the laws in your location.
Your lawyers should also ensure that the policies outlined comply with wider laws such as GDPR, Civil Rights Act, OSHA, ADA, and any other applicable employment laws.
4. Regularly update the employee handbook
Business doesn’t stand still – and neither should your employee handbook.
This is a living, breathing document that should be updated whenever there is a change in government laws or your internal laws of conduct.
At a minimum, you’ll want to revise your handbook at least once per year – but you might end up doing so a lot more frequently.
Failing to update the handbook in line with changes will deter employees from using it for reference, as they’ll become concerned the information is no longer accurate.
Of course, if you make an update, notify your team. Email them, highlighting the specific change, and explaining what it means for them. Repeat this information in your next company-wide meeting.
When employees see how seriously you and your managers take the handbook, they’ll follow your lead.
5. Ask for confirmation of receipt and feedback
You can create the world’s best employee handbook, but it’s pointless if employees don’t read it.
The final page in your handbook should be a signatory page where the employee confirms they have read and understood the handbook and agree to its contents.
By signing this, they are binding themselves to your company policies. This is vital in terms of protecting your business from litigation.
If your handbook is printed, give each employee two copies – one to sign and one to keep. If your handbook is digital, simply obtain a digital signature.
Follow the guidance above, and you won’t go wrong when putting together an employee handbook that your staff will genuinely engage with.
The golden rule: Consider your audience
Treat the creation of your employee handbook like a marketing exercise.
Including all the relevant content is the easy bit – the bigger challenge is ensuring your employees engage with the document.
With this in mind, every part of your handbook should engage your employees, from its content and structure to the format and language. Include a table of contents so its easily navigable.
Create an employee handbook to save time, resolve conflicts, and protect your business.