HR: Creating your first employee handbook: what you must include


What is an employee handbook?

If you’re at the point of growing your business by hiring staff then you’ve likely looked at creating employee contracts for a new recruit to sign when they join. These may sometimes contain some working policies and legalities, usually around elements such as salary, annual leave, sickness reporting and any statutory flexible working arrangements. While these are useful, it is also best practice to have a handbook.

A Staff Handbook (also known as a Policies and Procedures Manual) differs from the contract of employment in a few ways:

  1. A handbook covers more than the legalities of one post, and can include wider guidelines for behaviour or a corporate code of conduct that you have created for your business, not necessarily a statutory requirement or enforceable by law,
  2. A handbook applies to everyone in your business, whereas a contract applies only to the person who has signed it,
  3. By separating the handbook from the contract you gain flexibility in updating the employee handbook more regularly as a separate document.

Why do you need an employee handbook?

Well aside from the fact that it is considered best practice, there are very tangible benefits to putting the work in to creating your first employee handbook.

The most well-known of which is the protection it offers should you ever be faced with defending yourself or your business against legal claims. With so many disputes arising from dissatisfied employees, the handbook actually works to mitigate this kind of unpleasant scenario happening in the first place.

How? By providing a level playing field where all staff feel treated equally and achieve promotion through fair due process, where managers have guidelines to follow when making decisions on employment, conduct or discipline, and by allowing you to hold someone in breach of company policies in instances of intellectual property theft (an easier process that taking them to court).

On a more positive note, an employee handbook is your company advertisement to existing staff and helps with talent retention - reminding them of the practical package benefits and cultural values that make continuing to work for you the best option in front of them.

What areas should your employee handbook cover?

As well as the elements noted above, that often fall into the employee contract (but this is a matter of choice for you) there are other policies that should be included in your employee handbook:

  • recruitment and selection process
  • equal opportunities
  • dignity at work (harassment and bullying)
  • discipline, grievance issues and gross misconduct
  • unauthorised absence rules
  • your “Code of Conduct” (general guidelines specific to your business

In addition to these essentials are some “good-to-have” policies for your employee handbook:

  • capability and performance (including any appraisal process)
  • training (including induction information)
  • redundancy
  • diversity
  • financial procedures (including money laundering)
  • whistle blowing
  • digital policies (social media, laptops, mobile phones, etc.)
  • data protection
  • special leave
  • career break
  • risk management
  • volunteering
  • child and vulnerable adult policy (if appropriate)

Lastly, if you have a board of trustees, then it’s advisable that you include a section on how they are recruited and selected, who currently sits on the board and what their remit is.

What makes a good policy?

The policies within your employee handbook aren’t merely a tactic for defending your business against external attack. They should equally be a positive tool for your business growth and the development of your team. You communicate an intention to protect your staff, as well as yourself.

Well-written policies will have a solid purpose linked to your business strategy. They’ll be jargon-free (written in Plain English) avoiding any room for misunderstanding and future dispute.

Good policies are also flexible, enabling you to adapt quickly to external or internal pressures, developing them with the involvement of your team and any stakeholders, always ensuring they fit with the culture of your business.

You then include positive messaging that embodies your ethos within your policies. It’s this in particular that can make a handbook such a great tool for new employee induction.

When you’re just beginning to grow your business, hiring staff is a huge responsibility and something that you should do carefully - thus ensuring a small team that share the same values and goals and can work closely together in harmony.

What is best practice for your business?

Best practice advice includes ensuring you have both employee contracts and an employee handbook in place, with all your staff, at any given time.

It’s also helpful to include a phrase in the employee contract that states “the employee agrees to comply with all current and future policies of the employer” and detail a clause in the handbook that allows you to make changes and updates to policies in future and incorporate these into the employee agreements without their sign-off.

However, best practice also advises you to consult meaningfully in this whole process. That means talking to employees and/or their representatives when introducing any new policies (or amending existing ones) that would have an impact on their work, benefits or environment.

And of course, an employee handbook will only work for your business if you actually communicate it out succinctly to everyone it applies to. Some of the policies in it may require briefings or training to ensure they’re properly understood and implemented, so ensure that this is covered.

About the Author: Jerome Forde (@forderesolution) is a HR and employee relations specialist with almost 30 yearssenior-level experience in complex public, private and not-for-profit organisations. Jerome founded FordeCloud, a HRIT platform that uses the most advanced cloud technology to bring a virtual HR office to start-ups and SMEs.


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