Does My Company Really Need an Employee Handbook?

It’s one of the most common requests that we get from business leaders. “Help us develop employee policies and procedures in the form of an employee handbook.” Usually, business leaders aren’t entirely aware of the specifics of why they need a handbook or what it needs to include. Instead, they get a deep-seated feeling that it’s time to put a handbook into place. Sometimes they’ll run into an employee-related issue for which they wish they had guidelines or documentation. Some of these issues can be as innocuous as a pointed question from an employee. But other times the issue can be a tricky situation related to an employee’s actions or behaviors. Below, we’ll give you some more information about employee handbooks. You’ll see how these “words on paper” can help you manage your business more effectively.

When it comes to developing and implementing handbooks for small businesses and startups, companies typically fall into two categories:

The first includes companies that want an employee handbook from day one, regardless of whether or not they have any employees. This could be viewed as being more of a shotgun approach. We’ve seen two-person startups with 50-page handbooks. Sometimes this overkill can complicate things, especially if that 50-page handbook was copy and pasted from the founder’s brother’s two-hundred person engineering firm. While we don’t think that massive handbooks at the formation is a great idea, we do like to see small companies put some policies and infrastructure in place early on. It’s common for small companies to have unwritten policies in place. The handbook development process involves re-writing and formalizing those policies. Like getting an expense policy set up to achieve better bookkeeping practices.

The second group of companies that we see needing a handbook include companies that are growing and scaling. They suddenly find themselves in need of policies and procedures to address ongoing or existing challenges within their business. Developing an employee handbook at this stage is a fun and rewarding process. How can a handbook be a fun process? Because you can use it to actively shape the culture of your organization (and address problems and issues) in one fell swoop. You also have an opportunity to imbue some of your organization’s quirks, values, uniqueness, and culture into the handbook itself.

Employee handbooks help companies face challenges

At their core, employee handbooks are a collection of documents, resources, policies, and procedures that employees and management use and/or reference in order to understand and carry out the company’s mission. Most handbooks contain a mix of strategy, required policies or procedures, compliance information, and other information relating to the safety and well-being of employees. The policies that are contained within your handbook can also be used by management whenever challenges arise and the business needs a point of reference on how to address these challenges.

When is the right time?

We’ve found another pivotal time to consider putting an employee handbook in place. When your company hits the point where they are hiring people outside of their existing connection base, the time is ripe. Businesses tend to start out with everyone knowing each other and putting informal handshake agreements into place. It starts by saying, “This employee can work from home four days a week.” Or, “That employee gets the souped up laptop.” As time goes on, and there’s a need for more employees, the company is required to start hiring outside of their circle of trust. As new employees join the business, handshake agreements become harder to monitor, track, and enforce. The employee handbook replaces the handshake agreements. It instead defines what that agreement actually is. It also standardizes this “agreement” across various classes of employees.

Ask for expert help

Companies that want to put a handbook in place should work with an HR consultant and/or their attorney. Both types of professionals bring a different perspective to the handbook development process. One great way to build out a handbook is to work with an HR consultant on the nuts and bolts of preparing the handbook. And then have the handbook reviewed by an employment attorney. Some HR consultants work closely with attorneys for this very reason because of the “hand in glove” relationship that exists here.

It’s all about delivery

Finally, the delivery of the handbook is an important part of employee hiring and onboarding. We’ve found that many tech-savvy companies issue the handbook and acknowledgment through an electronic signature system or an online HRIS. Some of the more innovative companies out there will even use a tech-enabled platform to house their handbook (e.g. Trello, Notion, or Sharepoint).

Are you ready to develop your employee handbook?

If you think that your company is going to be growing soon or if you have challenges that need to be addressed with written policies, it may be time to start thinking about putting an employee handbook in place.

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