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Creating An Employee Handbook For Your Small Business

Creating An Employee Handbook For Your Small Business

If you're currently running a business, one of the most important aspects to consider is what your rules, policies, and expectations are. You wear many hats, and setting expectations through word-of-mouth or meetings simply doesn’t cut it when managing employees effectively. The likelihood of your employees remembering these various policies is slim and may lead to misunderstandings or confusion. For this to work, you need a solid system in place to deliver such information. That’s where an effective employee handbook steps in.

You may think you don’t have time to create an employee handbook, however, creating one is essential to the success of your small business. An employee handbook is a set of guidelines for your employees and a great tool to help maintain company culture and keep expectations in check.

Why Your Small Business Needs An Employee Handbook

An employee handbook is a living, breathing document and a foundation for your employee relations efforts. It should be a carefully considered compilation of policies and procedures to help managers guide employees in their daily tasks. This handbook serves as a hub of information that your employees can reference at any time, be it allotted time off, your company dress code, or workplace safety policies. It not only protects your business, but it protects your employees, provides valuable resources to your team, and may even serve as a legal document in case of litigation.

Writing an employee handbook might seem like something that only occurs at large corporations with many employees, but it’s a good place for any business to start. Employee handbooks are beneficial for any company as they establish your company's core values and culture.

If you have been operating your small business for a while, chances are you’ve experienced turnover. This could be due to a myriad of reasons, such as budget constraints, family commitments, or simply personal choice. No matter the reason employees may leave, it’s critical that you document your business policies in the event that they will need retraining in the future.

Elements Of An Effective Small Business Employee Handbook

Your small business is an extension of yourself, so it makes sense to consider how you would like it to be represented by your employees. When discussing your employee handbook, you'll want to think about what kind of language you’re comfortable with. What tone will you take? Will deadlines for different tasks be made explicit? The elements of an effective employee handbook include the following:

Good organization

You want your document to be easy to read, easy to understand, and laid out for success. A well-organized handbook is going to be key in these areas. A table of contents at the beginning of this document will help with navigation and ensure that you don’t miss any key components. Adding headers, bullet points, and well-defined sections is key when creating a lengthy document.


Another crucial component: covering all your bases. Your handbook shouldn’t leave anything to the imagination. You’ll want to be concise and clear, especially when it comes to policies and legalities.

A proper representation of your brand or business

Your handbook should be an accurate representation of who and what your company is. This includes company values, culture, and mission. A handbook is a place to ensure that rules are being followed, sure. But it’s also a place where you can talk about how you reward your employees and include exciting information. For example, if your business offers unique perks such as seasonal sports tickets or a home office stipend, you can mention these more in-depth in your handbook.

Inclusion of your brand tone and voice

Lastly, your handbook should sound like you. Not sure what we mean? Every business or brand has a tone of voice. For some, that may mean a very professional-sounding document, but for others, casual may be the way to go. Any important document is an extension of your business, and because of that, it should be branded! Even if it will only be used for internal purposes.

What To Include In Your Employee Handbook

Creating a clear and concise handbook for your employees, that’s easy to read and understand can keep them motivated, focused, and engaged. The first time many employees will read your handbook is when they are hired — so your handbook may be one of their first impressions of your business as an employee. But what should this document include? Some handbook contents may be optional, while others are non-negotiable.

Employment at-will

Employment at-will is a legal understanding that allows an employer to dismiss an employee at any time, for any reason, or for no reason at all. It also means the employee is free to leave at any time as well. Typically, at-will employment exists for a 90-day period. This way, either the employee or employer can part ways if the role isn’t a good fit. Employment laws in some states and countries allow this kind of employment, and your business may be one of them. If that’s the case, this should be included in your employee handbook.

Harassment and bullying

If you want a happy and motivated workforce, harassment and bullying will not be tolerated. Many companies think their employees know their behavior is inappropriate, but that isn't true. In fact, an estimated 48.6 million Americans are bullied at work. Effective organizations should have a clearly defined and communicated employee code of conduct that distinguishes unacceptable from acceptable workplace conduct.

Equal employment practices

The Equal Employment Opportunity (EEO) is a federal law that prohibits discrimination in employment based on race, color, religion, sex, and national origin in companies that have at least fifteen employees and work for the Federal government. There are separate laws with similar objectives at the state level. In all countries, there are also laws to prevent discrimination on the basis of sexual orientation in the workplace. A company's employee handbook can be used to keep track of all rules, regulations, policies, and procedures regarding Equal Employment Opportunities.

Compensation and benefits

Your employee handbook is the perfect place to break down how compensation works at your company and what benefits you offer to your team. Even if all your employees are paid different wages, knowing where they can access compensation information or whom they can speak to about these matters is a priority.

Pay period and payroll

Every business does payroll differently. You may be on a biweekly schedule, weekly, or even monthly, so it’s important to distinguish these details in your handbook. Here you can also provide information on how employees are paid and whom to contact if there are payroll issues.

Dress code

Dress code may not matter for all industries, but for some, it’s a major touchpoint. Being clear about your dress code clears up any confusion and informs your employees on what wardrobe they’ll need to be successful at work.

Performance evaluations

Performance evaluations are a key component of a job; however, it can be easy to forget about them amidst the hustle and bustle of work tasks. Be sure to include your evaluation schedules in your handbook, whether they’re twice a year, quarterly, or yearly. This will help your employees be prepared and set reasonable expectations from day one.

Work hours, breaks, and scheduling

For some roles, tasks may need to be performed outside regular business hours due to the nature of the job and/or deadlines. In these cases, overtime may be required. In addition, employees are entitled to scheduled break periods in addition to lunch breaks. Breaks will not be unreasonably withheld or delayed and must last at least five minutes under federal law. Meal breaks are typically an hour long, with a 30-minute minimum allowed by law (unless otherwise negotiated with the employee). These details are best presented in your handbook, where employees can access this information at any time.

Vacation time, sick days, and leaves of absence

Similar to work hours and breaks, clarifying how much vacation time and sick days your employees are allotted helps with planning purposes. If you have a system where hours are accrued over the course of a pay period, be sure to mention this in your handbook. Leaves of absence can also be a tricky subject with its own set of stipulations, so explaining how to begin this process can aid your employees in the event of health emergencies and life circumstances.

Workplace safety policies

The dangers of the workplace, and more specifically, employee safety, are significant issues that help employees, employers, and society as a whole. For any company, it's important to ensure your employees are properly trained in safety procedures and informed on how to correctly protect themselves from workplace injuries and the policies in place to protect them.

Employee discipline and termination policies

There are many reasons why employers need to have policies in place that address employee discipline and termination. However, human resources can be a difficult area to navigate. Making your policies known in your handbook protects you in these cases.

How To Get Started

You may have all your policies and work regulations in place but may not know how to get started with making your own employee handbook. Plus, you may not have a dedicated HR department in place, which means that you must take the lead when it comes to setting it up. Appointing who will have a role in the creation process is a major first step. Once that’s settled, here’s a rough outline of what to do next:

  • Meet with your employees and HR: Your employees can be the best way to receive feedback. Ask them questions about what they’d love to see included in your handbook, what’s confusing about your policies, and more. Then meet with your HR department to review ideas and get their input. If you don’t have an HR department, decide who will oversee this project or whether you will contract out this work.
  • Ask yourself what you need to include: By now, you should have a good idea of what to include in your handbook. Asking professionals and researching will also play a big part in this step.
  • Create the handbook outline: Once you’ve decided what to include, it’s time to create an outline. This will serve as a guide for whoever writes your handbook.
  • Write and edit your handbook: This may be something you decide to do on your own or contract out. Regardless of what you decide, this process will take some time, and you will need several revisions to ensure your handbook is written clearly and grammatically. 
  • Get the legal stuff handled: Once your handbook looks good, it’s best to have a legal team do a final review. This will help you catch any final policy errors or inconsistencies.
  • Get the handbook to your employees: Now that your handbook is ready, it’s time to get it in front of your employees and add it to your onboarding process.

Overall, an employee handbook is often a very important aspect of running a successful company. A handbook tells your employees what their basic rights are and what they should expect from their workplace environment. This resource can offer benefits to the entire staff in the form of policies that protect them, educate them, or simply save them time. It’s a crucial document for businesses of any size.

GMS Can Help You Build A Quality Employee Handbook

If you're unsure where to start or have employees who weren't around when your handbook was last updated, consider partnering with GMS. We can help you design a comprehensive employee handbook that addresses your unique needs and concerns while guiding employees from their first day of work to their last. Contact us today to get started!

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